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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: 03/10/2007
ATW (Atwood Oceanics--$51.87; +0.52; optionable): Oil and gas drilling/exploration
http://biz.yahoo.com/p/a/atw.html
EARNINGS: Announced 2-6-07
STATUS: Cup w/handle. ATW is forming a shorter 12 week base within a larger 11 month pattern; like these base on base patterns as they work to really wring out the excess and set up great upside moves. Strong volume Wednesday as ATW jumped off the bottom of the handle at the 18 day EMA (50.30), bumping up against the breakout point. It stepped sideways to end the week, still bumping the breakout point. The sector is one of the better in the current market and ATW is set up well to give us the breakout move this week.
Volume: 424.1K Avg Volume: 439.065K
BUY POINT: $52.55 Volume=650K Target=$60.45 Stop=$50.72
POSITION: ATW FJ - Apr. $50c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/atw.html
Play Date: 03/10/2007
ROCM (Rochester Medical--$16.21; +0.12; no options): Medical instruments (urinary continence and urine drainage care products.
http://biz.yahoo.com/p/r/rocm.html
EARNINGS: Announced 2-23-07
STATUS: Double bottom w/handle. Until October 2006 ROCM was not that well know and volume would just dribble out. It got some institutional support, however, and the volume has increased to a nice, steady stream. It split in November, and then rallied right on up to early February. It is now consolidating that move with a 6 week base that is trying to form up a handle right now after a lower low in early March set up the second leg of the double bottom. It rebounded last week and started to work laterally over the 18 day EMA (15.88) to end the week. It will likely take a few more sessions to finish the handle before it can try the breakout. With these patterns you want to see the breakout and strong volume when it does because it needs volume to push it through the resistance at the 'hump' at 17.45.
Volume: 139.625K Avg Volume: 234.263K
BUY POINT: $17.55 Volume=350K Target=$20.95 Stop=$16.85
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/rocm.html
Downside: What correction doesn't need some good downside plays?
Play Date: 03/10/2007
CSE (Capitalsource--$24.81; -0.24; optionable): Credit services for small and medium sized businesses
http://biz.yahoo.com/p/c/cse.html
EARNINGS: 2-27-07
STATUS: PUT. The bane of the market right now is anything financial, particularly loans. The idea that the economy is in deeper trouble than reported is an undercurrent to the recent selling and thus the weakness as investors shoot first and wonder what happened later. It reported some decent earnings and a dividend increase, receiving upgrades when it did. Nonetheless, CSE double had topped in December and February, however, indicating trouble was already in the works before the news really hit re mortgage issues. It broke the 50 day EMA in February and failed a test, plummeting from 27 to 24. It rebounded in last week's relief rally, but volume basically, to use the new word for the week, sucked. It tapped the 200 day SMA (25.37) Thursday and then rolled back on Friday. Looks ripe for to follow tanking money flow lower. There is a ridge of support at 24, so it will likely try to hold there, but it will likely seek the bottom of that range at 23. A move to the target lands a 43%ish gain. Ugly pattern ready to yield some more pretty downside profits.
Volume: 1.26M Avg Volume: 1.089M
BUY POINT: $24.68 Volume=1.4M Target=$23.41 Stop=$25.04
POSITION: CSP PE - Apr. $25p (-42 delta)
http://www.investmenthouse.com/cs/cse.html
Play Date: 03/10/2007
GS (Goldman Sachs--$201.70; +1.76; optionable): Investment brokerage
http://biz.yahoo.com/p/g/gs.html
EARNINGS: 3-13-07 before the open
STATUS: Put. Made us some great money in its run higher, but it is in correction mode and has just one down leg under the belt. Financials are struggling because of economic worries, and given the big run higher they are in the gun sights of sellers. GS dove lower in late February, finding 'bottom' last week on Monday and then rebounding. Same as the market. It rallied up to the 90 day MA (202.84) on Friday, showing a doji there. Earnings are Tuesday morning, and this makes this a more aggressive play; it could always kill earnings and rally. In this current market mood, however, it is likely to take a few sessions for the market to appreciate its earnings, and that gives us a downside move to bank some nice gain when the earnings come out. That means looking to move in as it pushes a bit lower Monday. A move to the target lands a 44%ish gain.
Volume: 7.682M Avg Volume: 6.542M
BUY POINT: $200.88 Volume=8M Target=$194.00 Stop=$203.05
POSITION: GPY PT - Apr. $200p (-44 delta)
http://www.investmenthouse.com/cs/gs.html
Play Date: 03/10/2007
LIZ (Liz Claiborne--$42.67; -0.35; optionable): Apparel
http://biz.yahoo.com/p/l/liz.html
EARNINGS: Reported 2-28-07
STATUS: Put. LIZ reported earnings to end February and no one seemed to notice. Hardly a blip on the chart, just a modest gain on the session. After that it was back to work, i.e. setting up for the next drop lower. Now LIZ is not a barking dog; it enjoyed a great run from July to February, but it ran out of gas at that point. The tip off was the new high on no volume. That shows you that there was no push of new buyers coming in as the stock reached a pinnacle. With no new bids coming in the stock has to correct. It did so to end February, starting the first leg lower. Last week it moved laterally as the market rebounded; it didn't even try to rebound to test the 90 day MA (43.81) it broke, and that is an indication of a lack of strength. Started lower Friday on rising trade, and looks ready to follow money supply that is falling so fast it will have to call the stock price and tell it to bring its stomach with it as price falls to catch up. A move to the target lands a 42%ish gain.
Volume: 1.122M Avg Volume: 707.065K
BUY POINT: $42.51 Volume=1M Target=$40.75 Stop=$43.05
POSITION: LIZ PI - Apr. $45p (-67 delta)
http://www.investmenthouse.com/cs/liz.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. This is the week but CLE is still unable to get back through the 90 day MA. Hate to start in with a stocks struggling even before earnings.
DLTR: Announced earnings 2-28-07. Researching the date.
EXC: Researching date. Still trying to find firm footing at the 18 day EMA to rebound from a pretty hard breakout test.
FDX: Forecast 3-21-07
JCI: Researching the date. Announced earnings late January.
NOV: Researching date. Announced earnings 2-6-07
POT: Tentatively set for third week in April. Ended the week moving laterally, consolidating the strong Wednesday surge.
RL: Researching date. Announced earnings 2-7-07.
RIMM: Tentatively set 4-4-07
VSEA: Tentatively set for early May.
YUM: Forecast 5-1-07. Bounced back from the 200 day SMA, but in a weak pattern at the 10 day EMA.
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 03/10/2007
FOSL (Fossil--$27.00; +0.34; optionable): Apparel, accessories
BACKGROUND: Last announce a 3:2 split on 3-12-04 at $32.10. Before that a 3:2 split 5-14-02 at $27.70.
http://biz.yahoo.com/p/f/fosl.html
EARNINGS: 5-15-07
STATUS: Test breakout. Gapped higher in February on its earnings report, moving out of a 5 month ascending base. It has tested the move and was doing so before the market started correcting. FOSL just continued its pullback in the selling, holding near support at the 18 day EMA (26.04) and rebounding last week. Rather modest by the end of the week so it may come back a bit more before continuing the breakout move. This is a time to be patient on plays such as this, and we will let it show us the next strong upside move to give us the entry.
Volume: 300.755K Avg Volume: 402.277K
BUY POINT: $27.24 Volume=600K Target=$32.71 Stop=$25.97
POSITION: FUA FE - June $25c (69 delta) &/or Stock
http://www.investmenthouse.com/cs/fosl.html
Play Date: 03/10/2007
GIL (Gildan Activewear--$54.60; +1.51; no options): Wholesale imprinted sportswear. Forecast early May.
BACKGROUND: Last announced a 2:1 split on 5-5-05 at $44.20.
http://biz.yahoo.com/p/g/gil.html
EARNINGS: Late April
STATUS: Ascending base. GIL affirmed its 2007 guidance the past week and surged Thursday and Friday on strong volume. Friday it backed off of its high after moving over the late November high in the base. It will likely test back for several sessions to form a handle to the 15 week base given it bounce well last week and collided with the all-time high and then backed off. It needs a bit of a breather and a lateral move to start the week gives it a good ramp to jump higher from.
Volume: 372.4K Avg Volume: 198.687K
BUY POINT: $55.35 Volume=350K Target=$63.75 Stop=$53.89
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/gil.html
Play Date: 03/10/2007
VMC (Vulcan Materials--$118.63; -1.30; optionable): Building materials. Tentatively forecast for late April
BACKGROUND: Last split 3:1 in March 1999 at $140.
http://biz.yahoo.com/p/v/vmc.html
EARNINGS: 1-31-07
STATUS: Breakout test. VMC broke higher from a 9.5 month cup with handle base to start 2007 and surged over 120. After that initial move it needed more of a rest, and the past three weeks it is taking that breather, working laterally along the 18 day EMA (115) in a range between 115 and 120. Last week it bounced up to the top of the range on solid trade and closed the week out knocking at the door. May take another week to finish this test, but we want to be ready when it makes its move to resume its trend higher.
Volume: 1.055M Avg Volume: 941.04K
BUY POINT: $120.55 Volume=1.4M Target=$134.85 Stop=$116.85
POSITION: VMC ED - May $120c (60 delta)
http://www.investmenthouse.com/cs/vmc.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 03/07/2007
CXW (Corrections Corp of America--$51.57; -0.26; optionable): Private prisons
http://biz.yahoo.com/p/c/cxw.html
STATUS: Test breakout. After the nice surge Tuesday on strong volume CXW ended the week at the 18 day EMA (51.66), holding the move and setting up for another run higher. Just have to wait for it to show the move. A good stock for this kind of market because it is not tied to any of the big economic sectors. Also like how it filled the early February bap and jumped right back up. 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 (49.96) and then jumped higher last Tuesday on the strongest trade in a month. Pausing now before it continues higher. Looking to move in as it continues higher.
Volume: 412K Avg Volume: 371.018K
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: 03/08/2007
KG (King Pharmaceuticals--$18.54; +0.17; optionable): Drugs
http://biz.yahoo.com/p/k/kg.html
EARNINGS: 2-28-07
STATUS: Cup w/handle. King continues the solid base that is crowning a long consolidation phase. Volume shot higher Thursday as KG showed a nice doji at the 18 day EMA, the bottom of the handle. It is set to give is the breakout. Just have to wait and watch for the volume as it does. To recap: Been a while since a split, but king has rebuilt its kingdom. Kind of small now, but a breakout and run will improve things dramatically. A big leader from 1999 to through 2001, it collapsed and took 4 years to recover. 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: 2.296M Avg Volume: 2.519M
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
CONTINUING LEADER PLAYS:
Play Date: 03/06/2007
HMSY (HMS Holdings--$19.44; +0.40; 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. Strong volume Friday as HMSY started higher off the 50 day EMA (18.88). It faded back from the 18 day EMA (19.85) on the high but like the volume that started to come back in last week on the upside bumps. Looks ready for this week but of course if the market tanks it might delay a bit. It has held up very well during the selling, however, making a routine pullback to set back up for another run. To recap: 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: 500.142K Avg Volume: 279.837K
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--$23.58; +0.11; optionable): Apparel
http://biz.yahoo.com/p/c/cri.html
STATUS: Put. Managed a modest gain Friday on very low volume, but still closed below the 18 day EMA (23.81), the resistance level in this trend lower. Just waiting for the break low to follow that money flow lower.
Volume: 608.2K Avg Volume: 843.573K
BUY POINT: New: $23.29 (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--$140.78; +0.04; optionable):
http://biz.yahoo.com/p/s/spy.html
STATUS: Put. 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: 107.773M Avg Volume: 74.798M
BUY POINT: Aggressive: 140.65; next: $139.38 Volume=70M Target=$136.65 Stop=$140.32
POSITION: On aggressive buy: SFB PK - Apr. $141p (-44 delta); Next buy: 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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