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us stock market, trade stock
Begin part 3 of 3
THE PLAYS:
Good movers: CYTC; DLTR; RL; SSYS; UCTT; WFR
New Plays:
Upside:
New Post-Split Play:
Play Date: 03/08/2007
KG (King Pharmaceuticals--$18.37; +0.02; optionable): Drugs
http://biz.yahoo.com/p/k/kg.html
EARNINGS: 2-28-07
STATUS: Cup w/handle. Been a while since a split, but king is starting to perform again. A big leader from 1999 to through 2001. After that the collapse and the 4 year recovery. It is finally in position to make a move after this 12 month base, spending the last month easing back and forming the handle. Volume surged Thursday as KG showed a big doji at the 18 day EMA. Looking good; just needs to show us the breakout and start a new strong run.
Volume: 4.241M Avg Volume: 2.502M
BUY POINT: $19.05 Volume=3.8M Target=$22.95 Stop=$18.21
POSITION: MG GW - July $17.50c (61 delta) &/or Stock
http://www.investmenthouse.com/cs/kg.html
Downside: Getting ready for the next downside
Play Date: 03/08/2007
DAKT (Daktronics--$24.87; -0.58; optionable): Scoreboards
http://biz.yahoo.com/p/d/dakt.html
STATUS: Put. If DAKT is keeping score it is getting trounced. It was a solid leader but announced very disappointing earnings in mid-February. Massive gap lower on the news. This is the second gap for DAKT in the past four months; it gapped higher in November, working in a range until this gap lower. That is an island reversal. It tried to hold but collapsed again, falling through the 200 day SMA. It tried to rebound Tuesday and Wednesday, but then rolled back over Thursday. Looking to move in on a continued run lower. A move to the target lands a 40%ish gain.
Volume: 1.337M Avg Volume: 997.038K
BUY POINT: $24.69 Volume=1.4M Target=$23.10 Stop=$25.05
POSITION: QKE PE - Apr. $25p (-46 delta)
http://www.investmenthouse.com/cs/dakt.html
Play Date: 03/08/2007
SBUX (Starbucks--$30.70; +0.23; optionable): High priced caffeine
http://biz.yahoo.com/p/s/sbux.html
EARNINGS: 5-3-07
STATUS: Put. Going to the well, or should we say coffee pot, once more. SBUX has made us some strong gain on its declining earnings price decline. It is rebounding from that last sell off, rallying to the 18 day EMA (31.51) on the Thursday high but then rolling over and closing below the 10 day EMA. It has failed again at near support and we are looking for another move down that we can use to make us some money. A run to the target lands us a 46%ish gain.
Volume: 15.043M Avg Volume: 8.422M
BUY POINT: $30.57 Volume=10M Target=$29.05 Stop=$31.04
POSITION: SQX PZ - Apr. $32.50p (-70 delta)
http://www.investmenthouse.com/cs/sbux.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.
BA: Researching the date
CAH: Tentatively forecast for 4-26-07
CLE: Tentatively forecast 3-15-07. Struggling to hang on below the 90 day MA.
DLTR: Announced earnings 2-28-07. Researching the date.
EXC: Researching date. Has made the test and trying to hold over the early February peaks
FDX: Forecast 3-21-07
JCI: Researching the date
NOV: Researching date
POT: Tentatively set for third week in April. Big surge on Wednesday
RL: Researching date. Continues the good move off the 50 day EMA.
RIMM: Tentatively set first week of April
VSEA: Tentatively set for early May.
YUM: Forecast 5-1-07. Trying to rebound but stalled at the 10 day EMA Thursday.
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 03/08/2007
CAH (Cardinal Health--$71.69; +1.06; optionable): Drugs
http://biz.yahoo.com/p/c/cah.html
STATUS: Double bottom w/handle. Volume is surging as CAH rebounds off the test of the 50 day EMA (69.68), moving toward the breakout from its 12 month base. Strong money flow is leading higher. Looking to start some positions at the buy point and then again after it tests the breakout.
Volume: 3.232M Avg Volume: 1.883M
BUY POINT: $72.25 Volume=2.9M Target=$82.95 Stop=$69.57
POSITION: CAH FN - June $70c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/cah.html
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 03/03/2007
VSEA (Varian Semiconductor--$48.34; +1.02; optionable): Chip equipment
http://biz.yahoo.com/p/v/vsea.html
STATUS: Breakout test. Edged higher Thursday but no volume. Still looking for a more definitive break higher. To recap: VSEA has established itself as the leader in its sector. Strong move higher in mid-February on some solid earnings news broke VSEA out from a short 7 week base. Nice rally to 50, and you would expect it to get roughed up in the selling. It was lower but showed excellent relative strength, closing near the 18 day EMA on Friday and just above some support at 46. Looking for this to hold and for VSEA to bounce from here as the overall market posts a relief rally.
Volume: 1.168M Avg Volume: 1.519M
BUY POINT: Want to see more upside strength (orig. $48.05) Volume=2M Target=$54.95 Stop=$45.31
POSITION: UES EI - May $45c (61 delta, low OI) or UES HJ - Aug. $50c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/vsea.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 03/07/2007
CXW (Corrections Corp of America--$51.83; +0.11; optionable): Private prisons
http://biz.yahoo.com/p/c/cxw.html
STATUS: Test breakout. Tried to move higher but showed a doji over the 10 day EMA on low volume. Just being patient, letting CXW show us the move. To recap: CXW gapped out of a 4 month base in early February. It had a hard time extending the move, working laterally below 54 to end the month and then faded to fill the gap. It sold with the market, but volume was very light; no dumping the stock, just filling the gap. It held the 50 day EMA (49.81) and then jumped higher Tuesday on the strongest trade in a month. Took a breather Wednesday on lower, average volume. Looks like that is just a pause before it continues higher. Looking to move in as it continues higher.
Volume: 246.3K Avg Volume: 370.647K
BUY POINT: $52.21 Volume=450K Target=$58.89 Stop=$49.89
POSITION: CXW FJ - June $50c (65 delta) &/or Stock
http://www.investmenthouse.com/cs/cxw.html
Play Date: 03/07/2007
VLO (Valero Energy--$60.00; +0.20; optionable): Oil and gas refining
http://biz.yahoo.com/p/v/vlo.html
STATUS: Double bottom w/handle. Could not extend the move after gapping higher Thursday. Still solid, and if it gives us the break higher we will start some positions. To recap: Volume kicked in Wednesday as VLO cleared the handle to its 7 month base. A big winner in 2005 and half of 2006, VLO needed a base to rest and then set up for its next run. With margins at $15 or more/bbl and the driving season coming, VLO is ready to run and it has room to run as well. Ready to start positions as it continues and then again on the test.
Volume: 17.146M Avg Volume: 11.296M
BUY POINT: $60.22 Volume=12M Target=$67.95 Stop=$57.95
POSITION: VLO FL - June $60c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/vlo.html
CONTINUING LEADER PLAYS:
Play Date: 03/06/2007
HMSY (HMS Holdings--$19.04; +0.15; no options): Cost containment and payment accuracy for government healthcare programs
http://biz.yahoo.com/p/h/hmsy.html
EARNINGS: Reported 2-28-07
STATUS: Test 50 day EMA. Nice doji on the 50 day EMA Thursday as volume moved up toward average. Still looks super, ready to make the move. To recap: Made us some nice money on its last run and set up well to do it again. HMSY broke out in early January and posted an excellent run up the 10 day EMA (now at 20). It needed a test to set up the next run, and the market selling has provided that. It was selling a bit ahead of that as earnings were already built into the run prior to the release. Nice fade to this support where it is showing a doji, the past two sessions on rising volume. Strong stocks run up the short term moving averages after a breakout, test the 50 day EMA, and then resume the move. Looking for continued strong volume as it makes the next break higher.
Volume: 297.644K Avg Volume: 270.713K
BUY POINT: $19.68 Volume=450K Target=$22.95 Stop=$18.75
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/hmsy.html
CONTINUING DOWNSIDE PLAYS:
Play Date: 02/27/2007
CRI (Carter Holdings--$23.47; -0.38; optionable): Apparel
http://biz.yahoo.com/p/c/cri.html
STATUS: Put. Gapped higher Thursday but rolled over, falling on a strong shot of above average volume. This could be the final attempt to move past the 18 day EMA (23.84) that fails and sends it lower. Money flow is weak and has turned back down ahead of price.
Volume: 1.505M Avg Volume: 820.337K
BUY POINT: New: $23.22 (orig. $23.66) Volume=750K Target=$22.00 Stop=$24.21
POSITION: CRI PE - Apr. $25p (-56 delta, 75 OI)
http://www.investmenthouse.com/cs/cri.html
Play Date: 03/07/2007
SPY (S&P Depository Receipts--$140.74; +1.18; optionable)
http://biz.yahoo.com/p/s/spy.html
STATUS: Put. SPY gapped higher Thursday, rallying through the 10 day EMA (140.79) but unable to hold the move, closing below that near support. The jobs report will likely tell the story whether it turns lower from here or continue higher in the rebound. If it turns lower SPY is primed to sell off again and give us another good downside run. To recap: SPY is setting up for another run lower for us after the one over the past week. It has rebounded from that selling, rising Tuesday and Wednesday, but it could not hold Wednesday's gain. Ready to move in if it continues lower from here. If it bounced a bit more we let it go higher, reset the buy point, and then play it again when the fall starts once more. A move to the target from the Wednesday close lands a 45%ish gain.
Volume: 117.792M Avg Volume: 73.43M
BUY POINT: $139.97 Volume=70M Target=$136.65 Stop=$141.21
POSITION: SFB PJ - Apr. $140p (-47 delta)
http://www.investmenthouse.com/cs/spy.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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