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Begin part 3 of 3
THE PLAYS:
Good movers: SBUX
New Plays:
New Post-Split plays:
Play Date: 02/10/2007
HANS (Hansen Natural--$39.51; +2.45; no options): Soft drinks, energy drinks
http://biz.yahoo.com/p/h/hans.html
STATUS: Double bottom w/handle. HANS was one of the big winners running from 2005 well into May of 2006. Kind of ironic. We rode a lot of that move for a tremendous gain. All the while the so-called 'realist' (a.k.a. stubborn mule head) Herb Greenberg said the stock was overvalued and the company had serious issues. During the time of his complaints the stock more than doubled for us. After that huge run it finally gave in and has formed the current 7.5 month base. I suppose that gives Greenberg some satisfaction; of course it is still holding half of its gains from that run, so Greenberg was wrong even when he might claim he was right. You know the phrase about blind hogs. Anyway, HANS has set up a new base, and on Friday some strong volume was pushing it towards a breakout. It sports some of the strongest fundamentals growth rates in the market once more, and this pattern is a nice one to send it higher back toward those old highs. Looks ripe, and just going to let it show us the breakout move to enter our positions.
Volume: 8.438M Avg Volume: 3.124M
BUY POINT: $40.31 Volume=3.2M Target=$49.88 Stop=$37.77
POSITION: - Stock (no longer term options)
http://www.investmenthouse.com/cs/hans.html
Play Date: 02/10/2007
VIP (Vimple Communication--$85.50; -0.75; optionable): Russian wireless telecom
http://biz.yahoo.com/p/v/vip.html
EARNINGS: Late February
STATUS: Test breakout. We exited VIP to end last week because it was selling on rising volume and we were not sure how low it would go and we wanted to preserve our gain given the turn in the market to end the week. It will likely come back to the 18 day EMA (84.55), and if it can hold there that shows it has the backing to continue the breakout from its 7 week double bottom base and move further into all-time high territory.
Volume: 696.6K Avg Volume: 764.926K
BUY POINT: $86.88 Volume=1M Target=$99.95 Stop=$84.35
POSITION: VIQ GQ - July $85c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/vip.html
New buy point on current post-split position:
Play Date: 02/10/2007
INFY (Infosys Technologies--$59.44; -1.07; optionable): IT solutions
http://biz.yahoo.com/p/i/infy.html
Earnings: Announced in January
STATUS: Test breakout. INFY broke out from a 9 week ascending base in January and has moved steadily up the 10 day EMA (59.02). last week it broke higher on Wednesday on reports of strong growth in India (INFY is an Indian company). It tested that move to end the week, holding the 10 day EMA on the Friday low on much lower, below average volume. Excellent strength and ready to add some positions as it holds this near support and rebounds on rising trade once more.
Volume: 920.72K Avg Volume: 1.748M
BUY POINT: $59.78 Volume=1.8M Target=$68.75 Stop=$58.11
POSITION: IUN GL - July $60c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/infy.html
Leader: May turn to a pre-announcement play as it continues.
Play Date: 02/10/2007
FFIV (F5 Networks--$75.50; +0.49; optionable): Networking solutions
http://biz.yahoo.com/p/f/ffiv.html
EARNINGS: Released 1-24-07
STATUS: Test breakout. FFIV enjoyed a strong move off the August low, rallying to 80 and giving us a very nice gain. It has faded back the past month, coming back to near the 90 day MA (69.59) and then rebounding to start February. The test held the breakout from the 8 month base and thus set it up for a continued move higher. Strong volume Wednesday as FFIV jumped higher and back through the 50 day EMA (73). Took a breather to end the week, and if FFIV continues the break higher on strong volume we will be starting into some positions once more.
Volume: 1.347M Avg Volume: 1.054M
BUY POINT: $75.95 Volume=1.2M Target=$84.95 Stop=$73.88
POSITION: FLK GO - July $75c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/ffiv.html
Downside:
Play Date: 02/10/2007
AXP (American Express--$57.53; -0.96; optionable): Credit services
http://biz.yahoo.com/p/a/axp.html
EARNINGS: 1-22-07
STATUS: Head and shoulders. Taking another look at AXP again as it breaks lower on rising trade. We exited it when it recovered the 90 day MA last week on better volume, but it could not hold up with the lending issues and with MA's earnings report. It broke back through the 90 day MA Friday and money flow, already down, took another big hit. Looking to move in again on a continued decline as it turns lower now that it has completed its head and shoulders top. A move to the target lands a 53%ish gain.
Volume: 4.705M Avg Volume: 4.913M
BUY POINT: $57.44 Volume=5M Target=$55.94 Stop=$58.20
POSITION: AXP OY - Mar. $57.50p (-43 delta)
http://www.investmenthouse.com/cs/axp.html
Play Date: 02/10/2007
WDR (Waddell & Reed--$25.25; -0.60; optionable): Investment brokerage
http://biz.yahoo.com/p/w/wdr.html
EARNINGS: Reported 1-30-07
STATUS: Head and shoulders. Financials came under pressure late last week after the news on the sub-prime mortgage situation. It tried to break through the 50 day EMA (25.97) but failed, and Friday it broke lower, falling through the 90 day MA (25.52) on much stronger, above average volume. Money flow is weak and it is getting weaker, heading lower ahead of price. Looking to move in as it continues lower. A move to the target lands a 57%ish gain.
Volume: 717.6K Avg Volume: 619.329K
BUY POINT: $25.12 Volume=725K Target=$24.05 Stop=$25.57
POSITION: WDR OE - Mar. $25p (-43 delta)
http://www.investmenthouse.com/cs/wdr.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: So much for the excellent test, burrowing lower Friday.
BA: Researching the date
BIDU: Earnings 2-14-07 after the close. Trying to hold the 50 day EMA but want to see the pattern set up better.
BNI: Researching date. Still testing the breakout.
BPO: Announced the split as forecast, capping a strong run thus far in 2007
CEPH: Forecast 2-12-07
CHTT: Forecast 2-12-07 before the open
CLB: Forecast 2-15-07
CLE: Tentatively forecast 3-15-07
CTSH: Forecast 2-9-07. No split announced to end the week.
GENZ: Tentatively set for 2-14-07
GES: Forecast 2-14-07
GPRO: Tentatively forecast 2-13-07. Still working laterally along the 50 day EMA in a tight range.
JCI: Another stock that announced a dividend versus a split and it is running higher again after a quick test of the 10 day EMA
JCP: Forecast 2-22-07
KSS: Forecast 3-1-07. Sweet run underway
MER: Researching date
POT: Researching date
RIMM: Researching date
RL: No split announcement last week.
SRCL: Breaking higher on strong volume
VIVO: Forecast mid-February
WCN: Forecast 2-12-07
XTO: Forecast 2-13-07
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 02/10/2007
PX (Praxair--$63.63; +0.86; optionable): Industrial gas, e.g. oxygen, nitrogen, argon, helium, hydrogen
BACKGROUND: Last announced a 2:1 split on 10-29-03 at $66
http://biz.yahoo.com/p/p/px.html
EARNINGS: Released 1-24-07
STATUS: Reverse head and shoulders. Strong volume Friday as PX readies for the breakout from its 11 week accumulation base that is setting up to break PX out to a new all-time high. Excellent 4 to 1 accumulation in the pattern (4 up price weeks on rising volume to 1 down price weeks on rising volume) shows almost all buying as it sets up for a new high. PX raised its prices last week; with no slowing in the industrial sectors of the economy this means more money for PX. Excellent set up, and also getting back up near its split price as well.
Volume: 2.182M Avg Volume: 1.444M
BUY POINT: $63.92 Volume=1.6M Target=$71.95 Stop=$62.24
POSITION: PX GL - July $60c (69 delta) &/or Stock
http://www.investmenthouse.com/cs/px.html
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 02/03/2007
BA (Boeing--$90.00; +0.48; optionable): Airplanes, etc.
BACKGROUND: No splits in BA's history.
http://biz.yahoo.com/p/b/ba.html
STATUS: Test breakout. Nice recovery off the 18 day EMA test Friday, setting BA up for a new breakout and run to that all-time high. Excellent action setting up the breakout. To recap: BA announce strong results last Wednesday that gapped it higher off a test of the 90 day MA. It rallied to the end of the week and is now testing, working laterally. Now you could argue that BA is overextended but it tends to make these kinds of moves, and you use these little pullbacks after the initial surge to take or add to positions. It is printing money as it gains more and more orders at Airbus' expense. Don't know about you, but I have a hard time flying in a plane called a bus.
Volume: 4.283M Avg Volume: 4.225M
BUY POINT: New: $90.55 if the volume is surging (orig. $90.32) Volume=5.8M Target=$99.95 Stop=$88.88
POSITION: BA ER - May $90c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/ba.html
Play Date: 02/08/2007
CHTT (Chattem--$57.42; -0.05; optionable): Drugs. Forecast 2-12-07 before the open
BACKGROUND: Last announced a 2 for 1 split on 10-30-02 at $44.60.
http://biz.yahoo.com/p/c/chtt.html
EARNINGS: 2-12-07 before the open
STATUS: Test breakout. Big doji Friday at the 10 day EMA as CHTT heads into its forecast announcement week. Very flat going into the number and we like that. Ready to move in as it breaks higher. To recap: CHTT is going flat line ahead of earnings, holding a tight range over the 18 day EMA (56.90) as it tests a strong early 2007 break higher. Setting up for a new high on the next break and that is when we move into positions.
Volume: 231.056K Avg Volume: 320.061K
BUY POINT: $57.89 Volume=475K Target=$68.95 Stop=$56.22
POSITION: HQT FK - June $55c (64 delta) &/or Stock
http://www.investmenthouse.com/cs/chtt.html
Play Date: 02/08/2007
DAKT (Daktronics--$36.60; -0.79; optionable): Industrial electrical equipment
http://biz.yahoo.com/p/d/dakt.html
EARNINGS: 2-14-07
STATUS: Test 50 day EMA. Tested back tot eh 50 day SMA (36.31) Friday, continuing work on that consolidation of the strong early February move off the 50 day EMA (34.69). Very nice test of a strong move, setting up well ahead of earnings that are out Wednesday before the open. We are looking to take some positions ahead of the earnings report and then again after at the first opportunity we get. To recap: DAKT surged off the 50 day EMA to start last week and spent Thursday and Friday taking a break on lower volume. A very strong stock consolidating a short 8 week cup base, forming a handle here as it prepares for the break higher. It is strong, however, and can surge on any given day. Just want to be ready when it takes back off.
Volume: 538.713K Avg Volume: 685.919K
BUY POINT: Aggressive: $37.49 (orig. $38.05) Volume=1M Target=$44.95 Stop=$35.88
POSITION: QKC DG - Apr. $35c (65 delta) or QKC GH - July $40c (49 delta) &/or Stock
http://www.investmenthouse.com/cs/dakt.html
Play Date: 01/27/2007
GES (Guess? Inc.--$72.95; -0.42; optionable): Apparel
BACKGROUND: No splits in GES' history.
http://biz.yahoo.com/p/g/ges.html
EARNINGS: 2-14-07
STATUS: Test 18 day EMA. Still working in the tight, flat pattern over the 10 day EMA (72.76) as GES heads into its earnings week. Nice flat consolidation so we can look at taking some positions ahead of earnings and then look for the break higher. To recap: Working laterally on below average volume above the 18 day EMA (72.01) as GES tests the January breakout from a shallow 8 week cup. Volume has dried up as it moves laterally in a very narrow range. Just waiting for the break higher on rising trade.
Volume: 701.7K Avg Volume: 765.962K
BUY POINT: $72.48 Volume=1M Target=$83.45 Stop=$70.38
POSITION: GES FO - June $75c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/ges.html
Play Date: 01/30/2007
XTO (XTO Energy--$50.89; +0.21; optionable): Independent oil and gas. Forecast mid-February
BACKGROUND: Last announced a 4:3 split 2-16-05 at $39.10. Before that a 5:4 split on 2-17-04 at 28.50. Before that a 4:3 split on 2-18-03 at 24.20.
http://biz.yahoo.com/p/x/xto.html
STATUS: Double bottom. Tried the move Friday as volume jumped a bit and price moved to 51.60. Could not hold the move on the close, but still primed to make the break higher. To recap: XTO broke higher last Tuesday on stronger, above average volume, heading for a new all-time high. It broke out from a 10 month base in late November, but the move failed. It fell to the 200 day SMA where it double bottomed and then surged. On a continued move higher we are looking to start the play and then again on a test. Excellent action; one of the energy stocks that did not sell off nearly as aggressively as others.
Volume: 3.419M Avg Volume: 3.914M
BUY POINT: 51.22 (orig. $50.48) Volume=4.5M Target=$57.95 Stop=$48.33
POSITION: XTO EJ - May $50c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/xto.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 02/07/2007
RESP (Respironics--$42.02; -0.51; optionable): Medical appliances
http://biz.yahoo.com/p/r/resp.html
EARNINGS: 1-25-07
STATUS: Breakout test. Still working laterally along the 10 day EMA (41.86), testing the breakout and holding this key near support. Being patient and letting it show us the move higher to enter the play. To recap: RESP blasted out of a 16 month base on its earnings news, galloping 5 points on the breakout move. It has spent the past two weeks testing coming back to the 10 day EMA (41.67) on lower volume on some near term profit taking. Wednesday volume kicked back up well above average as RESP starts the next move in the breakout. Ready to move in as it continues higher.
Volume: 392.541K Avg Volume: 346.153K
BUY POINT: $42.48 Volume=400K Target=$48.85 Stop=$41.11
POSITION: RBQ GH - July $40c (67 delta, 88 OI). &/or Stock
http://www.investmenthouse.com/cs/resp.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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