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Begin part 3 of 3
THE PLAYS:
Good movers: AAPL; BPO; IBM; MON; NTGR
New Plays:
New Post-Split Plays:
Play Date: 01/16/2007
SWS (SWS Group--$25.42; -0.15; optionable): Investment brokerage
http://biz.yahoo.com/p/s/sws.html
STATUS: Test breakout. SWS jumped higher last Thursday, continuing the breakout run from a 6.5 month base that started in November. It has been bouncing up the 18 day EMA (24.36) It has come back the past two sessions to test that move. Money flow remains strong and after this test we are looking to move in on the next run higher.
Volume: 286.3K Avg Volume: 273.115K
BUY POINT: $25.12 Volume=300K Target=$30.85 Stop=$23.95
POSITION: SRJ FX - June 23.375c (70 delta, low OI) &/or Stock
http://www.investmenthouse.com/cs/sws.html
Leader:
Play Date: 01/16/2007
ADS (Alliance Data--$65.39; -0.03; optionable): Credit services
http://biz.yahoo.com/p/a/ads.html
STATUS: Cup w/handle. Working on a nice 4 day handle to a short 6 week base that is using the 50 day EMA as support. It is consolidating the October break higher from a 4 month cup with handle base. Some nice dojis at the 10 day EMA (64.89) as it tests are setting up the strong move higher which, by the way, takes it to a new all-time high. Nice pattern and strong accumulation and money flow.
Volume: 701.1K Avg Volume: 868.032K
BUY POINT: $66.35 Volume=1.3M Target=$75.95 Stop=$64.38
POSITION: ADS FM - June $65c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/ads.html
Play Date: 01/16/2007
MAN (Manpower--$76.38; -0.05; optionable): Staffing and outsourcing
http://biz.yahoo.com/p/m/man.html
STATUS: Test 18 day EMA. MAN has been around a long time, but right now we are interested in its 4 week lateral move along the 18 day EMA (75.38) that is the second test of the October breakout from a 6 month cup with handle. Strong stocks that breakout yield 4 to 5 bounces off the 10 or 18 day EMA. This gives MAN plenty of room to run higher, and this lateral consolidation is setting the foundation for the next break higher in its breakout run.
Volume: 447.1K Avg Volume: 747.6K
BUY POINT: $77.22 Volume=1.1M Target=$88.85 Stop=$74.32
POSITION: MAN FO - June $75c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/man.html
PRE-ANNOUNCEMENT PLAYS
We consider many stocks for pre-announcement plays every week. We get information regarding upcoming announcements and other data that leads us to conclude a split announcement is coming. Even then, however, we have to be discriminating. We have to see a strong technical pattern as well, and thus we reject many potential candidates based on a weak technical position. Some we consider have announced, but have not fared well given their technical patterns were weak to begin with.
The key today is to find stocks in strong patterns or that are ready to rebound off support. A split announcement will amplify the move higher in these cases as we enjoy moves from strong leaders in position to run higher. We won't chase a stock in a poor technical position even if we know it is going to split; it simply won't do us any good, i.e. it won't make us any money to the upside. We could list all stocks we think are going to split, but again, that won't make us any money unless we are in an office pool as to what stocks will or won't announce a stock split.
Current Pre-Announcement Plays:
This is a list of stocks we are looking to announce splits. We are not in all of the potential splits plays but are letting them set up for the next move. In each report we look at the candidates that are in the best patterns ahead of their potential announcements. This focus on leaders in good patterns allows us to make good money even if companies do not announce the split. The key with splits is the pattern and of course the strong earnings growth that put it in the pattern in the first place.
ATI: Wildcard that could announce 1-24-07. Great pattern regardless.
ATVI: Tentatively set 2-5-07.
BCR: Forecast mid-January
BDX: Forecast 1-25-07
BIDU: Forecast first week of February.
BPO: Forecast early February
CLE: No early January announcement. Still moving higher but needs some more trade.
CTSH: Forecast 2-9-07
FFIV: Potential split announcement 1-24-07
GILD: Tentatively forecast 1-31-07. Still building back, trying to set up a new buy point.
GPRO: Tentatively forecast 2-13-07
JCI: Forecast 1-25-07
JCP: Forecast 1-25-07
RNT: Tentatively forecast third week of January
TRMB: Forecast 1-25-07
UNP: Tentatively set for 1-25-07. Nice break higher on strong volume.
VIVO: Forecast mid-February
WCN: Forecast third week of January
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 01/16/2007
BDX (Becton Dickinson--$72.54; +0.57; optionable): Medical instruments. Tentatively forecast 1-25-07 before the open.
BACKGROUND: Last announced a 2:1 split on 10-5-00 at $76.
http://biz.yahoo.com/p/b/bdx.html
STATUS: Double bottom. Some excellent volume this month as BDX bounces up off the 90 day SMA and sets the second leg of its 13 week base. After that move a sidestep sideways to end last week, then starting higher Tuesday on rising, average volume. Looking to move in as it continues higher on strong volume.
Volume: 1.008M Avg Volume: 994.989K
BUY POINT: $73.38 Volume=1.5M Target=$83.95 Stop=$71.11
POSITION: BDX FN - June $70c (66 delta, low OI) &/or Stock
http://www.investmenthouse.com/cs/bdx.html
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 01/13/2007
HOG (Harly-Davidson--$72.45; -0.35; optionable): Motorcycles. Forecast 1-18-07 before the open.
BACKGROUND: Last announced a 2:1 split on 2-17-00 at $66
http://biz.yahoo.com/p/h/hog.html
STATUS: Double bottom w/handle. Still a very nice pullback working on the handle, holding above the 10 day EMA (71.80) on lower, below average volume. Nice action setting up the next break higher. It has had a nice run and needed a break to set up for earnings. It ahs done that and now we look for the break higher. To recap: It is indeed forming the handle to a short 8 week base that used the 50 day EMA (70.95) as support. Solid volume Thursday as it surged higher, and then backing off some on Friday as it fell to tap the 10 day EMA on the low but rebounded to recoup half its losses. Solid run to late November took it past its prior split point, and this test and new short base is giving us a nice entry point into the play.
Volume: 1.71M Avg Volume: 2.401M
BUY POINT: $74.12 Volume=3.7M Target=$88.95 Stop=$71.48
POSITION: HOG EO - May $75c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/hog.html
Play Date: 01/13/2007
JCI (Johnson Controls--$87.31; +1.11; optionable): Auto parts. Forecast 1-19-06 before the open.
BACKGROUND: Last announced a 2:1 split on 11-18-03 at $105
http://biz.yahoo.com/p/j/jci.html
STATUS: Reverse head and shoulders. Nice gap higher Tuesday but volume faded to below average. Not bad, however, and looking for it to rise as it continues toward the breakout. To recap: Likely a bit early on this stock but still a very nice 8 month pattern setting JCI up for a breakout to a new all-time high. Set up well for the move. Just looking for the breakout to start some positions.
Volume: 773.7K Avg Volume: 914.779K
BUY POINT: $87.45 Volume=1.7M Target=$99.89 Stop=$83.88
POSITION: JCI DQ - Apr. $85c (59 delta) or JCI GR - July $90c (47 delta) &/or Stock
http://www.investmenthouse.com/cs/jci.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 01/13/2007
EAT (Brinker Intl.--$30.84; -0.46; optionable): Restaurants (Chili's, Romano's, etc.)
http://biz.yahoo.com/p/e/eat.html
STATUS: Cup. Gave back part of the Friday move on continued above average volume. Not the best action, but still a solid pattern and if it can overcome this little hiccup it is ready for more upside and the breakout move. To recap: Breaking higher off the 50 day EMA (29.74) last week, working on the right side of a short 12 week base that is consolidating the late October breakout from an 8 month cup with handle base, running EAT to a new all-time high. It peaked at 31 and then faded back into the current pattern. Strong money flow and positive accumulation in the current small base has set up the next break higher. Solid move Friday on a second shot of above average volume. Ready to move in as it continues on this move and then gain as it tests a break through the high at 32.
Volume: 1.694M Avg Volume: 1.586M
BUY POINT: $31.52 Volume=2M Target=$36.75 Stop=$30.11
POSITION: EAT GF - July $30c (62 delta, low OI) &/or Stock
http://www.investmenthouse.com/cs/eat.html
Play Date: 01/11/2007
NICE (Nice-Systems--$31.77; -0.01; optionable): Computer peripherals
http://biz.yahoo.com/p/n/nice.html
STATUS: Test 50 day EMA. Gapped higher Tuesday, but could not hold the move. Closed flat after rebounding form a test of the 10 day EMA intraday. Strong money flow is still leading higher. To recap: Broke out of a 5 month double bottom in October, rallying to 32. It tested the 50 day EMA and then rebounded sharply. Once more it is testing the 50 day EMA, bouncing higher Thursday on rising, slightly above average volume. Good test after making a new 6 year high. Money flow is moving higher ahead of price and NICE was moving well Thursday, following it higher.
Volume: 344.068K Avg Volume: 279.908K
BUY POINT: $32.05 Volume=350K Target=$37.95 Stop=$30.65
POSITION: EQJ EF - May $30c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/nice.html
Play Date: 01/06/2007
TJX (TJ Max--$29.85; -0.09; optionable): Discount department stores
http://biz.yahoo.com/p/t/tjx.html
STATUS: Reverse head and shoulders. Big reach lower toward the 18 day EMA Tuesday and then a nice, quick rebound to close flat. Still set to make the breakout move. To recap: TJX is showing excellent action as it flirts with the breakout from an 11 week base that is consolidating its August to November run. Excellent pattern showing excellent 6 to 1 accumulation (6 up price weeks on rising volume to 1 down price weeks on rising volume) shows a lot of buying here as it rests and sets up for another breakout and another new high. Strong surge Thursday then a give back Friday on lower volume that still held the 10 day EMA on the intraday low. Solid all around and just waiting for the breakout move on strong volume to give us the entry point.
Volume: 2.662M Avg Volume: 3.218M
BUY POINT: New: over 30 (orig. $29.88) Volume=5.1M Target=$35.85 Stop=$28.48
POSITION: TJX DF - Apr. $30c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/tjx.html
Technical Trade:
Play Date: 01/11/2007
VRSN (Verisign--$24.60; +0.08; optionable): Internet security
http://biz.yahoo.com/p/v/vrsn.html
STATUS: Test 50 day EMA. Still working laterally along the 18 day EMA on below average volume, keeping that tight trading range going. Just being patient and waiting for the break higher. To recap: Something of a technical trade here of a different sort. Back in the summer of 2005 (sounds like a song title) VRSN double topped and then gapped lower. Since then it worked lower, forming something of a big 18 month double bottom with handle. It broke higher in late November on a good outlook, then faded back to the 50 day EMA (23.77) to test the move, working laterally the past two weeks in a tight range. We are looking for some good volume as VRSN comes off the 50 day EMA and starts the run to fill that gap. That is roughly our initial target, but it has plenty of room to run and we will let it do so as long as it will.
Volume: 2.726M Avg Volume: 3.08M
BUY POINT: $24.82 Volume=4.5M Target=$28.95 Stop=$23.88
POSITION: QVR FE - June $25c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/vrsn.html
Good Investing!
Jon L. Johnson and the Stock Split Report Staff.
All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners of Online Investment Services, LP or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.
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