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Begin part 3 of 3
THE PLAYS:
Good movers: CYTC; EQT; EXC; FLIR; MRO; SSYS; SYK; UCTT; WFR
New Plays:
Upside:
New Post-Split Play:
Play Date: 03/20/2007
RS (Reliance Steel--$46.20; +2.25; optionable): Steel fabrication
http://biz.yahoo.com/p/r/rs.html
EARNINGS: 4-18-07
STATUS: Cup w/handle. Strong, strong volume Tuesday as RS bolted off the 50 day EMA test where it spent the past month forming the handle. A solid 12 month base that is ready to breakout and take RS to a new all time high. Looks like a reliable move ahead.
Volume: 1.938M Avg Volume: 925.927K
BUY POINT: $46.68 Volume=1M Target=$53.68 Stop=$44.11
POSITION: RS FI - June $45c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/rs.html
Play Date: 03/20/2007
TIE (Titanium Metals--$35.38; +0.75; optionable): Titanium and other industrial metals
http://biz.yahoo.com/p/t/tie.html
EARNINGS: Announced 2-13-07
STATUS: Cup w/handle. Working on a 4 week handle (a double bottom of sorts) using the 50 day EMA (33.34) as support as it sets up for the breakout from an 11 month base. Solid volume Tuesday as TIE gapped higher, making it to the prior March high and stalling. Looking for some continued volume as TIE makes the break over those recent highs. We will start the position there and then see how it rallies toward the February high.
Volume: 3.586M Avg Volume: 2.525M
BUY POINT: $36.27 Volume=3M Target=$42.95 Stop=$34.22
POSITION: TIE FG - June $35c (61 delta) &/or Stock
http://www.investmenthouse.com/cs/tie.html
Downside:
Play Date: 03/20/2007
CSE (Capitalsource--$24.10; +0.15; optionable): Credit services
http://biz.yahoo.com/p/c/cse.html
EARNINGS: Announced 2-27-07
STATUS: Put. CSE made us some money on its last run lower, and now it has rebounded to the 10 day EMA (24.30), once more ready to turn lower. It double topped in December and February, and that started this decline. It may try to test the 10 day EMA once more before it rolls over; if so we will catch it as it does turn back down. It has another good run or two lower before it needs to rebound higher. A move to the target lands us a 40%ish gain.
Volume: 922.7K Avg Volume: 1.234M
BUY POINT: $24.04 Volume=1.2M Target=$22.35 Stop=$24.44
POSITION: CSE SE - July $25p (-52 delta)
http://www.investmenthouse.com/cs/cse.html
Play Date: 03/20/2007
DIA (Diamonds Trust (DJ30)--$122.82; +0.54; optionable)
http://biz.yahoo.com/p/d/dia.html
STATUS: Put. A low volume climb off of last Wednesdays reversal has left DIA at the 18 day EMA and close to turning back down for another run lower that will likely at least test 120. That is our first target; a move to that level lands a 41%ish gain. If it continues lower we will let the play run with it.
Volume: 7.564M Avg Volume: 9.049M
BUY POINT: $122.20 Volume=9.5M Target=$120.00 Stop=$122.85
POSITION: DAW QT - May $124p (-50 delta)
http://www.investmenthouse.com/cs/dia.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
CMTL: Researching date
CNMD: Forecast early May
DLTR: Announced earnings 2-28-07. Researching the date.
EXC: Researching date
FDX: Forecast 3-21-07. Pattern is now one we necessarily want to play ahead of earnings.
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
PD: Forecast early May
POT: Tentatively set for third week in April.
RL: Researching date. Announced earnings 2-7-07.
RIMM: Tentatively set 4-4-07
SSYS: Forecast early May
VMC: Forecast late April
VSEA: Tentatively set for early May.
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 03/20/2007
KSS (Kohls--$73.74; +0.77; optionable): Department stores
BACKGROUND: Last announced a 2:1 split on 3-6-00 at $76.
http://biz.yahoo.com/p/k/kss.html
EARNINGS: 5-17-07
STATUS: Reverse head and shoulders. Showing some solid volume sessions as KSS moves toward the breakout from its 7 week base forming at the tail end 5 month range from 68 to 74. This is part of a very large 5 year cup with handle, with this 5 month range acting as the handle. When it makes the breakout it will have room to move.
Volume: 2.622M Avg Volume: 2.825M
BUY POINT: $74.32 Volume=4.4M Target=$84.95 Stop=$71.94
POSITION: KSS GO - July $75c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/kss.html
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 03/14/2007
CMTL (Comtech Telecom--$37.17; +0.26; 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. Still in excellent position to break higher from this week long lateral move over the 90 day MA (36.60). It looks ready to make its move. 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 (35.99) 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: 168.82K Avg Volume: 196.125K
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
CONTINUING POST-SPLIT PLAYS:
Play Date: 03/17/2007
BKE (Buckle, Inc.--$35.48; +0.50; no options): Apparel stores
http://biz.yahoo.com/p/b/bke.html
EARNINGS: Announced 3-13-07
STATUS: Ascending base. Still showing solid volume as it tests the 50 day EMA (34.32), crouching for the break higher. Just being patient and waiting for the break higher. To recap: Split in mid-January and after its run it needed a rest. Thus the current base that is making higher lows and not giving up any of the gains. Announced earnings last week, and while they did not break BKE out of its 13 week base, they did not send it spiraling lower. Indeed, it held the 50 day EMA (34.25), making a higher low in the base as it goes about its business setting up for the next breakout and new high. It is a strong performer but want to see it clear the recent highs on strong volume to show us that the buyers are back in and ready to really drive it higher.
Volume: 148.9K Avg Volume: 156.402K
BUY POINT: $35.94 Volume=235K Target=$41.38 Stop=$34.25
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/bke.html
Play Date: 03/19/2007
CMC (Commercial Metals--$28.67; -0.23; optionable): Steel and iron
http://biz.yahoo.com/p/c/cmc.html
EARNINGS: Announces earnings 3-20-07
STATUS: Ascending base. Gapped higher on the earnings but could not hold the move, closing flat on strong volume. Good results, and when the earnings soak in it will be ready to move higher. Looking very good. To recap: Strong volume Monday ahead of its earnings Tuesday. It bumped right up against the late February high as it moved up; that is the point it needs to clear on strong volume to send it toward a new all-time high.
Volume: 2.346M Avg Volume: 1.201M
BUY POINT: $29.18 Volume=1.8M Target=$34.95 Stop=$27.61
POSITION: CMC FE - June $25c (77 delta) &/or Stock
http://www.investmenthouse.com/cs/cmc.html
CONTINUING LEADER PLAYS:
Play Date: 03/17/2007
GLDN (Golden Telecom--$53.92; +0.22; optionable): Telecom and internet services in Russia
http://biz.yahoo.com/p/g/gldn.html
EARNINGS: 3-15-07
STATUS: Double bottom. GLDN still looks strong though it could not really extend the Friday move. Volume faded to below average Tuesday as GLDN showed a doji after a modest gain. It may slip sideways for a few sessions and form a handle, but if it takes off from here on stronger volume we are going to take some positions then see how it tests. Still very solid. To recap: Strong volume Friday as GLDN surged off the 90 day MA (47.60), its second test of that level this month. Strong earnings sent it higher and completed the breakout from this short double bottom. A strong run with the market from August to February, it corrected hard to form this pattern; the double bottom is the 'scare them out' of the base world. Nice, sharp up and down action and starting back up. Looking to take positions on the move higher and then again after it forms something of a handle and makes the next breakout.
Volume: 199.143K Avg Volume: 260.362K
BUY POINT: New: on a move from here on strong trade (orig. $53.12) Volume=385K Target=$63.75 Stop=$51.04
POSITION: QDV FK - June $55c (49 delta) or QDV FJ - June $50c (61 delta, low OI) &/or Stock
http://www.investmenthouse.com/cs/gldn.html
CONTINUING DOWNSIDE PLAYS:
Play Date: 03/15/2007
AEO (American Eagle Outfitters--$30.27; +0.27; optionable): Apparel stores
http://biz.yahoo.com/p/a/aeo.html
EARNINGS: 5-22-07
STATUS: Put. Low volume tap at the 18 day EMA (30.38) Monday; just no strength right now as it bumps resistance, but it still has yet to break lower. Want to see it crack down harder and then we move in. To recap: 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 (28.28) 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 (30.44) last week. Looks ready to follow the weakening money flow lower. A move to the target lands a 40%ish gain.
Volume: 1.819M Avg Volume: 4.053M
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
Play Date: 03/17/2007
C (Citigroup--$50.64; +0.58; optionable): Banks, financial services
http://biz.yahoo.com/p/c/c.html
EARNINGS: 4-16-07
STATUS: Head and shoulders. Bounced higher Tuesday but failed to hold a move over the 200 day SMA (50.66), closing just below that level. Volume remained below average; nothing to sustain the move. Still looking for a turn lower after this lower volume test. Moved up the buy point to accommodate the bounce. To recap: C collapsed to end February, dropping hard out of a 9 week topping pattern, It tried to hold the 200 day SMA (50.65) through the first two weeks of March, but on Tuesday that attempt to consolidate gave way. It reversed Wednesday after another plunge to 48 and bounced to test the 10 day EMA and then on up to the 200 day SMA. A move to the target lands a 42%ish gain.
Volume: 16.525M Avg Volume: 19.472M
BUY POINT: $50.05 Volume=22M Target=$48.50 Stop=$50.89
POSITION: C PJ - Apr. $50p (-35 delta) or C QJ - May $50p (-36 delta)
http://www.investmenthouse.com/cs/c.html
Play Date: 03/17/2007
TOL (Toll Brothers--$28.57; -0.23; optionable): Residential home builders
http://biz.yahoo.com/p/t/tol.html
EARNINGS: Announced 2-22-07
STATUS: Head and shoulders. Volume jumped back above average Tuesday as TOL gapped over the 200 day SMA (28.76) and then turned lower, closing below that key level. That tells us it is ready to head lower again. Looking to move in as it follows the money flow lower. To recap: TOL gapped below the 90 day MA in late February, starting the breakdown from its January to February head and shoulders topping pattern. This pattern formed following a recovery in the housing stocks off of the July 2006 low. That recovery is in the tank as the stocks break down again. This is TOL's second test of the 10 day EMA following that gap lower, and it also has the added ice layer from the 200 day SMA that it fell through and has now rebounded back up to. A move to the target with the April options lands a 46%ish gain. The May options around 38%.
Volume: 4.522M Avg Volume: 3.429M
BUY POINT: $28.15 Volume=3.8M Target=$26.12 Stop=$28.88
POSITION: TOP PF - Apr. $30p (-59 delta) or TOP QF - May $30p (-55 delta)
http://www.investmenthouse.com/cs/tol.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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