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us stock market, trend trading stock
Begin Part 2 of 3
THE PLAYS: Splits may be in a lull right now, but more will be coming as this market continues to get better and better, and the split momentum will build with it. Right now we have a lot of great money-making investments that fit many investment styles.
BONUS PLAYS:
MCRS (Micros System--$27.59; +0.38; no options): Software.
http://biz.yahoo.com/p/m/mcrs.html
STATUS: Deep in its base, but showing a nice, playable pattern. It has formed a cup since early September, and has climbed back to the range of those left-side highs (29.25). It made a good move off of the 50 day MVA (24.60) last week, and has now pulled into a nice handle. Today it tested back to the 10 day MVA (26.63) as the stock continued its slightly descending consolidation on decreasing volume (that is how a handle should form). Looking for a breakout, and targeting 35.
BUY POINT: 28.60 on volume of 110,000 (today 26,100). Stop: 26.60.
POSITION: Stock.
SVM (Servicemaster--$13.85; -0.33; optionable): Business services.
http://biz.yahoo.com/p/s/svm.html
STATUS: Has made a strong move up over the last few months to build the right side of its base (a two year cup with highs at 14.94, within a larger base with highs at 25). Since its solid December move it has pulled laterally into a handle, holding its 18 day MVA (13.76). SVM tried a move Wednesday, stopping just short of the handle high (14.20), but it did not have breakout volume and today pulled back to support. Looking for it to hold the 18 day and make a move back up to the breakout, targeting 17.
BUY POINT: Breakout: 14.32 on volume of 550,500 (today at the average, 365,700). Stop: 13.32 (7%).
POSITION: Stock and/or April $12.50 calls to buy (SVM DV).
PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: None this week.
BEST PLAYS: Besides the plays set forth below as best plays, there are some other stocks that also look good. These include Pre-Announcements PII, MI and SRCL; Pre-Split XRAY; and Post-Split CHBS.
MARKET FAVORITES BEST PLAYS: KLIC still looking good.
1) DELL - Nice pullback to support
2) MANU - Cup with handle
3) FISV - Looking for the 50 day MVA bounce
DELL (Dell--$29.33; -0.06; optionable): Personal computers.
http://biz.yahoo.com/p/d/dell.html
STATUS: DELL is in a reverse head and shoulders, bouncing up last week from its 50 day MVA (27.40) to form the right shoulder. It hit up to 30.52 Monday on its recent high, pulling back but appearing to want to hold the 10 day MVA (28.95) this time. Today it pulled back slightly, showing a loose doji on much lower volume of 18.8 million (average 23.9 million). Looking for a bounce back up that will take out the recent high. There is some possible resistance at the April high of 31.32. Target: 36.
BUY POINT: Over recent high: 30.64 on volume of 30 million. Stop: 28.50.
POSITION: Stock and/or February $27.50 calls to buy (FLQ DY).
MANU (Manugistics--$20.06; -0.21; optionable): Application software.
http://biz.yahoo.com/p/m/manu.html
STATUS: In a cup with handle deep in its base, forming a handle over the last couple of weeks after having broken over its 200 day MVA (19.69). Volume has dipped as it has come back in the pattern to test the 200 day, today showing a loose doji on volume of 1.79 million (average 3.04 million). We will see if it can launch a move back up and break out. Target: 26.
BUY POINT: Breakout: 22.82 on volume of 4.5 million. Stop: 21.22 (7%). Aggressive: With above average volume, a move over 21.25 in a Nasdaq rally. Stop: 19.76.
POSITION: Stock and/or April $17.50 calls to buy (ZUQ DM).
FISV (Fiserv--$41.70; +0.15; optionable): Business software.
http://biz.yahoo.com/p/f/fisv.html
STATUS: After breaking from its cup with handle in late November, FISV made a couple of nice surges before steadily drifting back over the past four weeks to test its 50 day MVA (40.42). FISV tapped that support today but bounced back up again, moving with a surge in volume (1.8 million; average 1.3 million). We like the volume on the bounce, and will look for the stock to make another good move, watching for it to take out its short-term MVA's (42.17). The recent high is 44.61, and we will watch that level carefully on a move. If it can get by that level, targeting 50.
BUY POINT: Bounce: Over 42.17 on continued strong volume. Stop: 40.
POSITION: Stock and/or March $40 calls to buy (FQV CH).
PRE-ANNOUNCEMENT BEST PLAYS
1) EXPD - Still looks nice
2) DHR - Dojis over support
3) DRI - Ditto
4) GNSS - Holding up after the breakout
EXPD (Expeditors International--$59.10; -0.16; optionable): Air delivery & freight. Working on a date.
http://biz.yahoo.com/p/e/expd.html
BACKGROUND: Last announced a 2:1 split on 5-6-99 at a stock price of $62.50. The company has sufficient shares for a 2:1 split.
STATUS: Nice little pullback. After a solid move up in a December, EXPD formed a pennant handle to its cup (dating back to June, all-time of 65.92), and after a nice breakout move last Friday, it has come back to test the move. A one day move followed by a test is not our favorite action, but it is behaving very well, today dipping again on low volume (194,900; average 427,000), holding the prior pattern highs 59 and its 10 day MVA (58.39). We are looking for the stock to take out its breakout high, with solid volume stepping back in to continue the breakout move. There is some resistance from July highs (62.26), but we are targeting 66 on a strong move.
BUY POINT: Over 60.14 on above average volume. Stop: 56.04. Over the pattern high (Wednesday intraday spike): 60.92 on above average volume. Stop: 56.66.
POSITION: Stock and/or February $55 calls to buy (URP BK - under 100 open interest. Next month out is May, with very low open interest).
DHR (Danaher--$62.17; -0.02; optionable): Forecast to announce a split in late January in conjunction with earnings. At this time, the company cannot confirm a date for earnings release; however, it has declared a quarterly dividend which could make a split announcement less likely.
http://biz.yahoo.com/p/d/dhr.html
BACKGROUND: Last announced a 2:1 split on 3-6-98 with a board meeting. The stock price was $70. The annual shareholder meeting was on 5-1-01 at which time authorized shares were increased. The company has enough shares for a 2:1 split.
STATUS: DHR made a solid move last Friday, jumping out of a consolidation after it moved back over its 50 day MVA (59.44). The move was key in that it took out the long-term down trendline (from November 2000) which had been tough resistance of late. DHR has pulled back down to test the move, holding the trendline (currently at 61.20) and showing its second consecutive doji today on low volume (670,200; average 1.24 million). If it can hold, DHR faces the early December highs (64.10), made on its break from a reverse head-and-shoulders pattern. That breakout failed on a downgrade, but after testing 56 (below the 200 day MVA), DHR has fought back, and we like the strength of the recent move and the orderly test. Looking for a move over the December highs, but there is possible resistance at the May-June highs at 65, and then the high is near 70. Targeting the high.
BUY POINT: 64.22 on volume of 1.7 million. Stop: 60. Aggressive: With volume of 1.5 million, a move over 63. Stop: 60.
POSITION: Stock and/or March $60 calls to buy (DHR CL).
DRI (Darden Restaurants--$37.19; -0.01; optionable): We are working on a date.
http://biz.yahoo.com/p/d/dri.html
BACKGROUND: Based upon our research it does not appear that DRI has ever split its stock. The annual shareholder meeting was on 9-20-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: A very nice breakout Friday, and now DRI is testing the move. The breakout (from a nice handle-type consolidation) was the second solid move for DRI since it broke out of a cup with handle in early December, and although it took out a long-term upper channel trendline, DRI looks like it could continue with a solid move along the steeper trend established the last month. Today DRI showed a doji over the trendline (which is just above the 10 day MVA, at 36.40, and with the former consolidation highs), with volume dipping to 773,100 (average 683,200). Looking for a bounce back up and a continuation of the move, using care to protect profits. Target: 43.
BUY POINT: Over recent high: 38.51 on increased volume. Stop: 35.81 (7%). Aggressive: A move up from here on volume in the 1 million range. Stop: 35.75.
POSITION: Stock and/or April $35 calls to buy (DRI DG).
GNSS (Genesis Microchip--$71.54; -0.97; optionable): Semiconductor. NEW INFORMATION Forecast to announce a split with earnings, on January 17 after the close.
http://biz.yahoo.com/p/g/gnss.html
BACKGROUND: Based upon our research it does not appear that GNSS has ever split its stock. The annual shareholder meeting was on 9-20-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: GNSS broke out Wednesday on good volume, but the move stalled at the intraday high of 74.90 and it pulled back with the market to close. Today it did not give up much ground, holding over its former highs in its pennant (70.91) as volume fell back (2.47 million; average 2.5 million). Looking for GNSS to hold those highs and then continue the breakout move. On that move, a target of 80 initially.
BUY POINT: After holding 71, a move back over 72.50 on volume of 3 million. Stop: 67.54 (7%).
POSITION: Stock and/or March $70 calls to buy (QFE CN).
PRE-SPLITS BEST PLAYS: Remember, we try to grab these as they break out of good patterns or as they start a run right before the split. Not looking for home runs, but looking for those $3 to $4 moves running into the split, watching for topping signs and potential resistance. Not huge money, but it can be very steady. We set our initial stops at the 7-8% range below the purchase price (or just below obvious support), and move them up on a move to preserve our profits.
1) SYMC - Close to the breakout
2) HOTT
3) LIZ - Holding strong after a breakout move
SYMC (Symantec--$72.00; -1.25; optionable): Splits 2:1 effective February 1.
http://biz.yahoo.com/p/s/symc.html
STATUS: Nice breakout move Wednesday, but it could not keep it going today. SYMC reached up intraday to 74.70 (left side its cup with handle at 73.50), pulling back from there but on the lighter volume we like on pullbacks (2.61 million; average 2.5 million). Still looking good, and we will watch for SYMC to hold the prior pattern highs at 71 before making a move back up. With a continuation of the strong breakout we could get a good run going into the split. Target: 80.
PLAY: After holding 71, a move back over 72 on continued strong volume, with stock and/or February $70 calls to buy (SYQ BN). Stop: 67.07.
LIZ (Liz Claiborne--$52.97; +0.23; optionable): Splits 2:1 effective 1-17-02.
http://biz.yahoo.com/p/l/liz.html
STATUS: After an excellent move last Friday over its November-December highs at 52, LIZ has held steady with four consecutive dojis. Volume has finally settled down after being very heavy on the move and just after, although it spiked back up a bit today at 595,200 (average 501,800). Off of the dojis we still could get a test back toward 52, and if so we can look for that to hold and then catch a run back up. However, for now we will see if it can hold up and make another move, watching the stock's high of 54.95.
PLAY: A move over 53.35, with stock and/or April $50 calls to buy (LIZ DJ).
HOTT (Hot Topic--$33.45; +0.50; optionable): Apparel. Splits 3:2 effective February 6.
http://biz.yahoo.com/p/h/hott.html
STATUS: Announced a split yesterday, and showed that power splits can generate, trading up $1.50 after hours. HOTT opened today with a gap up and hit a high of 34.40, but pulled back in its pattern intraday with a big spike in interest, as volume moved to 1.4 million (average 863000). HOTT is in a double bottom that is within the larger cup dating back to May (high 38.20), and has made a couple of nice surges off of its 18 day MVA (32.22) on this run up. Watching for the stock to settle into a handle here, perhaps holding the 10 day (32.87) rather than the 18 day this time, and then breakout over the recent high (left-side high of double bottom is at 34.93). Target: 40 (watching resistance at the all-time high).
BUY POINT: Breakout: 34.81 on volume of 1.3 million. Stop: 32.37.
POSITION: Stock and/or February $30 calls to buy (UHO BF).
CONTINUING CANDIDATES BEST PLAYS:
1) BBBY - Still looking for the move
2) THC - holding in a handle
BBBY (Bed, Bath & Beyond--$33.49; -0.08; optionable): Forecast to announce a split during the market hours on 12-20-01 in conjunction with earnings.
http://biz.yahoo.com/p/b/bbby.html
BACKGROUND: Last announced a 2:1 split on 7-13-00 with a board meeting. The stock price of $39. The shareholder meeting was on 6-28-01 at which time authorized shares were increased. The company has sufficient shares for a 2:1 split.
STATUS: Holding in an ascending wedge, testing back in the pattern as we thought it would do. After dropping Wednesday, BBBY again appears to be holding support at its 18 day MVA (33.40), showing a doji today with slightly higher volume of 2.9 million (average 3.67 million). The stock formed the current pattern after a move out of a cup with handle, and we are looking for it to continue the strength with another breakout. Target: 41.
BUY POINT: Over 35.70 on volume of 5 million. Stop: 33.20.
POSITION: Stock and/or February $30 calls to buy (BHQ BF).
THC (Tenet Healthcare--$62.60; +0.50; optionable): Health Services - Hospitals
http://biz.yahoo.com/p/t/thc.html
BACKGROUND: Last announced a stock split in September 1991 in the $45 range. No additional shares will be authorized at the annual shareholder meeting, but the company has sufficient shares for a 2:1 split.
STATUS: Earnings were well-received and last Friday THC gapped way up hit a new high of 63 before pulling back. Since then the stock has held on, trying to form something of a handle. It has reached up to 63 three of the last five sessions, doing so again today, but volume was low (1.45 million; average 1.88 million) and it pulled back to close. We will see if THC tests its former pattern highs (61 from the late-November early-December range, which are the center of its 'flying w' type cup).
BUY POINT: The breakout buy point in 63.12 on volume of 2.7 million. Stop: 58.70. If we get a hold of support at 61 on a nice pullback, we can look at positions on a move back up.
POSITION: Stock and/or February $60 calls to buy (THC BL).
POST-SPLITS BEST PLAYS:
1) CACI - Higher low in the ascending wedge pattern
CACI (Caci Int'l--$40.83; -0.29; optionable): Technical Services. Split 2:1 effective 12-7-01.
http://biz.yahoo.com/p/c/caci.html
STATUS: Since its solid move going into the split, CACI has been somewhat erratic, but holding support at its 18 day MVA (40.22) as it moves in a lateral range. Off of yesterday's 'shooting star' doji we were looking for a run up and breakout, but instead it tested its 18 day but pulled off of that level to close. Volume was way down at 231,400 (average 421,400), but this higher low is making this ranging pattern turn into an ascending wedge. Looking for a breakout over the pattern high at 43.32. If it can take out the high, targeting 50.
PLAY: Breakout: 43.44 on minimum volume of 600,000, with stock and/or March $40 calls to buy (KFQ CH). Stop: 40.40. Aggressive: Over 42.50 on above average volume. Stop: 40.
****
REMAINING PLAYS:
****
PRE-ANNOUNCEMENTS REMAINING PLAYS:
Watchlist:
DIAN ($52.85; +0.37): Forecast to announce a split in 1-17-02 with earnings. At this time the company cannot confirm this date, and it has taken a big drop on news that torpedoed the sector. Still holding the 50 day MVA (52.32). After the hard fall, we will see if it can hold and then get back into shape getting closer to the forecast date. Good stocks should jump up off of the 50 day MVA, and if it gets the volume surge on the move, it could give us a nice run back up to 60.
AROW ($28.52; +0.02): Working on a date. Now looking quite weak, giving up its 50 day MVA (28.83) Wednesday, and after gapping back over that level today (up to its short-term MVA's, at 29), AROW dropped again, closing near Wednesday's low. Volume continued to be down (7,000; average 12,000), and it is just over its December lows. We will see if it can recover and preserve the pattern.
EDS ($68.20; +0.50): We are researching a date. Has crawled back over the 50 an 18 day MVA's (67.20 & 67.86), but has some work to do after its very strong move down last week. It could still drop back and give us an aggressive put play. On a strong drop with above average volume (3.1 million), February $70 puts to buy (EDS NN). Target is the 200 day, at 62.50.
BMS ($49.23; -0.27): We are researching a date in January. After the weak breakout in early December, BMS has dipped back, holding its 50 day (48.62). We will see it can hold and make a move on its high, at 52.47.
BRL ($78.04; +0.35): Researching a split date. Has pulled back to test the 50 day MVA (76.58). Volume continued to be very light, and for aggressive positions we are looking at a move over 80 on above average volume (1 million; today down to 405,600), with stock and/or February $75 calls to buy (BRL BO).
NDN ($37.00; +0.15): Researching a date. We were looking for a bounce from the 50 day (36.65), but the move did not have strength to make it back over the short-term MVA's (37.66). Does not look like a move is imminent this time around, but we are looking at aggressive positions with a move over 38 on above average (370,000) volume, with stock and/or March $35 calls to buy (NDN CG).
SONC ($36.29; +0.59): We are working on a date. SONC edged up today, but there was no volume as it hit the aggressive buy point. Looks like it could need some more time to set up. The high (late December) is 37.65. On a move over that level with above average volume, stock and/or March $35 calls to buy (ZSQ CG).
STU ($82.55; +0.30): Researching a date. Broke out in a big way in late December (over its April and August tops), and tested the move and its 10 day MVA (81.55; 18 day at 80.70). We will see if it can continue to trend up, with the breakout high ahead at 83.68. On a move over 85.80 on increased volume (12,400 today, about average), stock.
THQI ($48.07; -1.28): Working on a date. Dropped back through the 200 day MVA (49.27) again. Not much volume on the selling, and not much of a play from here.
WLP ($118.40; +0.72): Working on a date. Making a steady move back up from its 50 day (115.25) and back in the range of its former handle. Not the strongest move up this week, and we will see if it can hold, with the aggressive play on a move to 121.11 on volume of 990,000. The breakout is 123.02 on volume of 990,000, with stock and/or April $115 calls to buy (WLP DC).
XL ($90.91; +1.79): Researching a date. Was tightening up in a lateral consolidation at the 50 day MVA (90.14), but is having trouble, giving up that support Monday and finally managing to crawl back over it today on below average volume. We will see if it can hold; there is support at 85 from the October low.
End Part 2 of 3
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us stock market
trend trading stock
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