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us stock market, trade stock
Begin part 3 of 3
THE PLAYS:
Good movers: BA; BWLD; CYTC; RIO
New Plays:
Upside:
New Post-Split Play:
Play Date: 03/15/2007
EQT (Equitable Resources--$44.27; +1.35; optionable): Gas utilities
http://biz.yahoo.com/p/e/eqt.html
EARNINGS: Announced 1-25-07
STATUS: Ascending triangle. Strong volume as EQT moves higher, bumping into the top of its 15 week base, preparing for the break to a new all-time high. Nice higher low off the 50 day EMA (42.81) set up this move. Looking for the breakout to give us the entry point. A utility, but can move well when it starts a breakout run.
Volume: 1.361M Avg Volume: 716.58K
BUY POINT: $44.57 Volume=800K Target=$50.95 Stop=$42.48
POSITION: EQT FI - June $45c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/eqt.html
Play Date: 03/15/2007
TK (Teekay Shipping--$51.22; +0.73; optionable): Shipping
http://biz.yahoo.com/p/t/tk.html
EARNINGS: 2-21-07
STATUS: Ascending base. TK is making higher lows up the 18 day EMA (50.12) setting up a break to challenge a new all-time high. Broke out 6 month cup with handle in late January, rallied, and then formed the current 7 week base. Volume surged the past three sessions as it bumped up against the highs in the pattern. Looks ready to make the break.
Volume: 772.6K Avg Volume: 545.262K
BUY POINT: $51.65 Volume=600K Target=$57.95 Stop=$49.95
POSITION: TK GJ - July $50c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/tk.html
Downside:
Play Date: 03/15/2007
AEO (American Eagle Outfitters--$29.98; -0.52; optionable): Apparel stores
http://biz.yahoo.com/p/a/aeo.html
EARNINGS: 5-22-07
STATUS: Put. AEO recently moved to the NYSE, but that is not helping it a whole lot. It has formed a 15 week head and shoulders top and broke lower to start March, falling to the 200 day SMA (28.15) on the low. It bounced and tried to recover support at the 50 and 90 day MA, but is failing, sliding lower along the 18 day EMA (30.51) this week. Looks ready to follow the weakening money flow lower. A move to the target lands a 40%ish base.
Volume: 3.288M Avg Volume: 4.12M
BUY POINT: $29.86 Volume=4.2M Target=$28.11 Stop=$30.39
POSITION: AEO QF - May $30p (-43 delta)
http://www.investmenthouse.com/cs/aeo.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. Reaffirmed its guidance on Wednesday, but did not release results due to some accounting issues in France. Kiss of death.
CMTL: Researching date
CNMD: Researching date
DLTR: Announced earnings 2-28-07. Researching the date.
EXC: Researching date
FDX: Forecast 3-21-07
FOSL: Forecast mid-May
GIL: Forecast early May
JCI: Researching the date. Announced earnings late January.
MCHP: Tentatively set for 4-26-07
MM: Tentatively set for late March.
MRO: Forecast early May.
NOV: Researching date. Announced earnings 2-6-07
POT: Tentatively set for third week in April.
RL: Researching date. Announced earnings 2-7-07.
RIMM: Tentatively set 4-4-07
VMC: Forecast late April
VSEA: Tentatively set for early May.
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 03/15/2007
PD (Phelps Dodge--$127.93; +2.22; optionable): Copper. Forecast early May
BACKGROUND: Last announced a 2:1 split on 2-1-06 at $158
http://biz.yahoo.com/p/p/pd.html
EARNINGS: Announced 1-29-07
STATUS: Flat base. PD is breaking higher from a 4 month flat base that formed after its big gap higher in late November that took it out of a 6 month pattern. Note how it did not give up one inch of ground after the gap> It took a long time to consolidate that move, but it is an effective base nonetheless. Looking ot move in as PD continues the break higher.
Volume: 6.734M Avg Volume: 4.333M
BUY POINT: $128.25 Volume=4.5M Target=$144.45 Stop=$124.95
POSITION: DPB GF - July $130c (55 delta)
http://www.investmenthouse.com/cs/pd.html
New buy point on current play:
Play Date: 03/15/2007
ACL (Alcon, Inc.--$130.44; +1.87; optionable): Medical supplies
BACKGROUND: No splits in ACL's history
http://biz.yahoo.com/p/a/acl.html
EARNINGS: Announced 2-7-07
STATUS: Reverse head and shoulders. ACL has formed a short 6 week pattern that filled the early February gap that took ACL out of a 5 month RHS prior to this one. Strong money flow is leading higher. Volume is starting higher as it sets up for the breakout. Nice action and looks ready to really pop.
Volume: 475.7K Avg Volume: 494.49K
BUY POINT: $130.75 Volume=650K Target=$142.00 Stop=$126.95
POSITION: ACL EF - May $130c (55 delta)
http://www.investmenthouse.com/cs/acl.html
From the Wednesday report:
Play Date: 03/14/2007
CMTL (Comtech Telecom--$37.03; +0.49; optionable): Telecom systems
BACKGROUND: Last announced a 3:2 split on 3-9-05 at $36.40
http://biz.yahoo.com/p/c/cmtl.html
EARNINGS: 3-8-07
STATUS: Double bottom w/handle. A nice doji Friday over the 90 day MA is still working on the handle and setting up the breakout. Looking good. To recap: Kind of a skewed 4 month pattern, heavy on the downside the past month (thanks to the market), but holding support at the 200 day SMA and rebounding. It is working laterally and forming the handle now, using the 50 day EMA (35.82) on the lows as support. Part of a larger 16 month cup with handle base, the current pattern being the handle. Excellent fundamentals growth rates to go along with the pattern. Looking for volume to surge again as it did Friday and Monday on its strong earnings to send it to the breakout.
Volume: 190.684K Avg Volume: 200.987K
BUY POINT: $37.85 Volume=345K Target=$43.85 Stop=$35.78
POSITION: CQH GG - July $35c (65 delta) &/or Stock
http://www.investmenthouse.com/cs/cmtl.html
Play Date: 03/14/2007
CNMD (Conmed--$27.69; +0.74; optionable): Surgical devices and equipment
BACKGROUND: Last announced a 3:2 split on 8-9-01 at $32.
http://biz.yahoo.com/p/c/cnmd.html
EARNINGS: Announced 2-8-07
STATUS: Cup w/handle. Tried to run again Thursday, but could not hold the move. Still looks solid to continue the break higher after this test. To recap: CNMD is working on the handle to a large 22 month base. Surged higher in February on strong earnings results, finishing the right side of the base. It is using the market selling to test back in a very orderly manner, holding the 18 day EMA (27.21) as it does. Volume jumped higher Wednesday to the best level in a month (since the break higher on the earnings), and that is moving CNMD off the bottom of the handle. Looking at an aggressive position as it continues higher and then will wait for a test to add some more. Strong money flow has turned higher and CNMD looks to be in very good position to make the breakout.
Volume: 510.507K Avg Volume: 234.407K
BUY POINT: $27.94 Volume=350K Target=$32.95 Stop=$26.49
POSITION: KQD HE - Aug. $25c (69 delta) &/or Stock
http://www.investmenthouse.com/cs/cnmd.html
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 03/13/2007
MRO (Marathon Oil--$93.90; +0.49; optionable): Oil and gas refining, marketing.
BACKGROUND: No splits in MRO's history
http://biz.yahoo.com/p/m/mro.html
EARNINGS: Announced 2-1-07
STATUS: Cup w/handle. Strong volume Thursday as MRO gapped higher and closed near the March high at 95. Looking solid and ready to deliver the breakout. To recap: Tested the 50 day EMA intraday this week and rebounded sharply. Working on the handle to a somewhat skewed 12 week cup base that used the 200 day SMA on the low as support and then rallied higher, using the 50 day EMA (90.68) as support as it trended higher the past 6 weeks. Setting up for a new all-time high. Has some more work to do but is setting up well for the next breakout move once this selling is through.
Volume: 5.367M Avg Volume: 3.542M
BUY POINT: $95.25 Volume=5.3M Target=$107.95 Stop=$92.45
POSITION: MRO GS - July $95c (53 delta)
http://www.investmenthouse.com/cs/mro.html
Play Date: 03/10/2007
VMC (Vulcan Materials--$117.26; +1.90; 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. Continuing the nice lateral breakout test, holding the 18 day EMA (115.68) as it came back to test this week. Bounced Thursday, and looking for trade to ramp up as it continues higher and resumes the breakout move. To recap: 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 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: 773.4K Avg Volume: 971.013K
BUY POINT: $117.65 Volume=1.4M Target=$134.85 Stop=$114.00
POSITION: VMC ED - May $120c (60 delta)
http://www.investmenthouse.com/cs/vmc.html
Play Date: 03/03/2007
VSEA (Varian Semiconductor--$49.70; +0.49; optionable): Chip equipment. Forecast late April
BACKGROUND: Last announced a 2:1 split on 2-1-06 at $50.50
http://biz.yahoo.com/p/v/vsea.html
STATUS: Breakout test. Working laterally just below 50, setting up for the break higher after the mid-February upside break higher out of its short base. Volume is working higher this week. Just waiting for the next breakout move.
Volume: 1.402M Avg Volume: 1.544M
BUY POINT: New: 50.15 (orig. $48.05) Volume=2M Target=$54.95 Stop=$45.31
POSITION: UES EJ - May $50c (57 delta, low OI) or UES HJ - Aug. $50c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/vsea.html
CONTINUING DOWNSIDE PLAYS:
Play Date: 03/12/2007
CCU (Clear Channel Communications--$35.23; +0.21; optionable): Broadcast radio
http://biz.yahoo.com/p/c/ccu.html
EARNINGS: 2-23-07
STATUS: Put. Showed a doji Tuesday and then bounced to the 18 day EMA on the Thursday high before fading back to close below the 10 day EMA. Looking for this to be the rollover where we can move in. To recap: Volume surged Monday as CCU turned down sharply from the 90 day MA (35.70), following money flow lower. Recovered to the 10 day EMA the rest of the week and is now set up to fall once more. CCU gapped up sharply in late October, but now it is breaking down, looking to fill that gap higher. Like playing gaps because they always tend to fill. A move to the target lands a 50%ish gain.
Volume: 12.29M Avg Volume: 5.891M
BUY POINT: $34.84 Volume=6M Target=$33.38 Stop=$35.31
POSITION: CCU PG - Apr. $35p (-64 delta)
http://www.investmenthouse.com/cs/ccu.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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