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stock watch, stock split
Begin Part 2 of 3
THE PLAYS:
BONUS PLAYS:
PQE (Proquest--$36.80; 0.00; no options): Business equipment.
http://biz.yahoo.com/p/p/pqe.html
STATUS: Made a great breakout run in early January, moving out of a double bottom with handle. That move took it from 34 to a high of 39.21, and it has come back to test it, holding its 18 day MVA (36.44) and left-side pattern highs (from August, 36.70). Today was a doji over support, with volume continuing to be very low (17,300; average 72,500). Looking for a hold here at support and a move back up toward the breakout high and beyond. Could need a little more time to settle over support. On a move over the high, targeting 43.
BUY POINT: After holding the 36.50, a move over 37.10 on above average volume. Stop: 35.50.
POSITION: Stock.
PECS (Pec Solutions--$29.38; +0.73; optionable): Business services. Earnings 2-12.
http://biz.yahoo.com/p/p/pecs.html
STATUS: PECS has dropped hard from over 40 the past few weeks, taking out its 50 day MVA (32.45) last week and continuing down. Wednesday we got a relief bounce, but that might have run its course, as today PECS showed a tight 'star' doji, pulling back from its intraday high near the 10 day MVA (31.13). Volume remained strong, down today at 836,600 (average 648,700). The pattern indicates a drop back and we can look at a put play. The recent low is 26.25, and we will watch that carefully but target the 200 day MVA at 23.41.
BUY POINT: From here or after a test of 30, a drop back through 28.50 on continued strong volume.
POSITION: March $35 puts to buy (PQD OG - no open interest).
UNH (Unitedhealth--$74.33; +1.93; optionable): Health plan.
http://biz.yahoo.com/p/s/svm.html
STATUS: UNH has been trending up with periodic bounces up its 200 day MVA (currently 65), but after breaking out of a 'flying w' in November, UNH pulled back and held the 50 day (70.38), forming a small cup with handle over the past six weeks. After a nice handle consolidation on low volume that held the 10 day MVA (72.43), UNH broke out today after its earnings came out before the open. Volume was huge on the move, coming in at 4.36 million (average 1.6 million). A solid breakout, and a buy up to 77.61. Target: 85.
BUY POINT: A buy up to 77.61 on continued strong volume. Stop: 69.20-72.18.
POSITION: Stock and/or March $70 or $75 calls to buy (UHB CN or UHB CO).
PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: No announcements this week, but some good moves on earnings.
BEST PLAYS: Besides the plays listed below, there are some others that look good as well. Pre-Announcement LSTR made a nice continuation to its breakout move and is close to our limit for buying on a breakout, and Pre-Announcements GTK; also Continuing Candidates ETH and DHR.
MARKET FAVORITES BEST PLAYS:
1) AMAT - Losing to the 50 day
2) CHKP - Could be readying for another drop
AMAT (Applied Materials--$40.03; -1.21; optionable): Semiconductor equipment.
http://biz.yahoo.com/p/a/amat.html
STATUS: After giving up its 50 day MVA (41.58) last week, AMAT has come back with the market but has not been able to take out that level. Today it reached up to 42.44 but pulled back and sold down to close. Volume was up on the selling (18.95 million; average 15.94 million), and we could see AMAT heading down again, and we will initially target 36, at the late November lows.
BUY POINT: A drop through 39.75 on continued strong volume.
POSITION: March $47.50 puts to buy (ANQ OW).
CHKP (Check Point Software--$36.50; +1.52; optionable):
http://biz.yahoo.com/p/c/chkp.html
STATUS: CHKP was hammered on earnings earlier this month, and after some promising moves was hammered back through its 200 day and 50 day MVA's (42.76 and 39.41). It has consolidated a bit the last week, hitting a low of 33.66 Wednesday but bouncing up a bit today on higher volume (9.33 million; average 8.92 million). The bounce did not get past recent highs (37.50; 10 day MVA at 38), closing with a loose doji. Looking for a drop back after this weak bounce, and on a fall back we are looking for the stock to take out recent lows and target 30 on a put.
BUY POINT: In a weak market, a drop back through 35.50 on increased volume.
POSITION: March $40 puts to buy (KEQ OH - low open interest for now).
PRE-ANNOUNCEMENT BEST PLAYS
1) TGH - Looks ready to move
2) YUM - Double bottom with handle
3) STU - Trying to breakout
4) MRBK - Volume surge could presage a move
5) DRI - Tested the breakout
6) WLP - New high
TGH (Trigon Healthcare--$71.99; +0.52; optionable): Forecast to announce a split on 2-8-02 before the market opens in conjunction with earnings.
http://biz.yahoo.com/p/t/tgh.html
BACKGROUND: Based upon our research it does not appear that TGH has ever split its stock. The annual shareholder meeting was on 4-25-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Broke out of a saucer with handle recently, which pattern was within a larger pattern going back to late 2000 (highs at 80). TGH has pulled into another handle-type consolidation, holding over its 10 day MVA (71.18) although tapping the 18 day at some lows (70.42). Today it moved up slightly in the pattern, with volume spiking way up to 288,200 (average 184,500). The handle high is 72.70, and we are looking for a breakout. Target: The highs at 80.
BUY POINT: 72.82 on volume of 276,000 or better. Stop: 67.07.
POSITION: Stock and/or April $70 calls to buy (TGH DN - under 100 open interest).
YUM (Tricon Global--$52.98; -0.76; optionable): Forecast to announce a split on 2-6-02 after the market closes in conjunction with earnings.
http://biz.yahoo.com/p/y/yum.html
BACKGROUND: Based upon our research it does not appear that YUM has ever split its stock. The annual shareholder meeting was on 5-17-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: YUM broke back over its June highs in October, and since has formed a double bottom with a couple of bounces along the 50 day MVA (currently 50.70). As it reached the midpoint of the pattern it has formed a handle, dipping back along the 10 day MVA (52.84). It tried a move yesterday on good volume, but pulled back short of the handle high (54.55, and today followed with a doji as volume relaxed to 620,100 (average 799,300). Holding up in the pattern, and we will see if it can put together a breakout from this pattern. The stock is in a very large base dating back to early 1999 with highs at 70. Target: 62.
BUY POINT: 54.67 on volume of 1.2 million. Stop: 50.84.
POSITION: Stock and/or April $50 calls to buy (YUM DJ).
STU (Student Loan--$83.50; -0.30; no options): Researching a date, as due for a split.
http://biz.yahoo.com/p/s/stu.html
BACKGROUND: Based upon our research it does not appear that STU has ever split its stock. The annual shareholder meeting was on 5-16-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: After its very solid move up yesterday, STU eased off with a loose doji on much lighter volume (17,100; average 12,200) today. It is just below its recent intraday spike to an all-time high of 84.40, made last week as STU tried to break from its pennant pattern, formed after its huge breakout move in late December (over its April and August tops at 80). On a break over the high, targeting 90.
BUY POINT: Over 84.40 on increased volume. Stop: 79
POSITION: Stock.
MRBK (Mercantile Bankshares--$44.86; +0.11; optionable): Forecast to announce a split on 3-12-02 in conjunction with a board meeting. The company will not confirm this date, but our research determines this is the date for the next board meeting.
http://biz.yahoo.com/p/m/mrbk.html
BACKGROUND: Based upon our research it does not appear that MRBK has ever split its stock. The annual shareholder meeting was on 4-25-01 at which time no additional shares were authorized. The company has sufficient shares for a 3:2 split.
STATUS: Early this month MRBK broke over the center of its large double bottom (44) as it trends up its short-term MVA's (10 & 18 day at 44.50 and 44.13). It tested the move over 44 but could not get much going on the move back up, moving laterally the last week over the 10 day. Today it moved up very slightly, but volume kicked back in 235,400 (average 182,300). We will see if it can make a strong move out of this little consolidation, targeting 52. The left side high is at 45.13.
BUY POINT: 45.25 on volume of 276,000. Stop: 42.25.
POSITION: Stock only.
DRI (Darden Restaurants--$38.62; -0.37; optionable): We are working on a date.
http://biz.yahoo.com/p/d/dri.html
BACKGROUND: Based upon our research it does not appear that DRI has ever split its stock. The annual shareholder meeting was on 9-20-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Has been unable to run on the breakout, hitting up to 39.15 yesterday but then testing back today. Not a bad move, as it tapped down near its 10 day MVA (38) and former consolidation highs, then recovering. Volume remained strong at 1.07 million (average 694,600), though lower than we saw on the breakout itself. It has shown resiliency and made some good, steady moves, so we are looking at it to hold on this test and make a strong move back up to continue the breakout. Remember that 15% is a good move in this tough market, so our target remains 43 on this move. Also, the stock is above its upper channel trendline, so we are always cautious in that circumstance.
BUY POINT: After holding the 10 day, a move back over 39 on continued strong volume. Stop: 41.11.
POSITION: Stock and/or April $35 calls to buy (DRI DG).
WLP (Wellpoint Health Networks--$126.04; +1.80; optionable): Working on a date.
http://biz.yahoo.com/p/w/wlp.html
BACKGROUND: Based upon our research it does not appear that WLP has ever split its stock. The annual shareholder meeting was on 5-8-01 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
STATUS: WLP broke out last week, but even with the good volume we were skeptical after the low volume drift up in its handle that preceded the move. It held on, however, pulling into a short pennant, and today it broke out. Not the strongest move, with volume up at 516,600 (average 569,100), so with existing positions we are riding toward a target of 135, but cautiously. If we get some strong volume from here or after a test of 125, we can look at new positions.
BUY POINT: After a test of 125, a move back up on volume of 800,000. Stop: 120. From here, we need to see volume of 800,000 on move up. Stop: 120.
POSITION: Stock and/or April $120 calls to buy (WLP DD - under 100 open interest).
PRE-SPLITS BEST PLAYS: Remember, we try to grab these as they break out of good patterns or as they start a run right before the split. Not looking for home runs, but looking for those $3 to $4 moves running into the split, watching for topping signs and potential resistance. Not huge money, but it can be very steady. We set our initial stops at the 7-8% range below the purchase price (or just below obvious support), and move them up on a move to preserve our profits.
1) BLL - Strong move
2) HOTT - Looks good
3) SYMC - Moving up after the test
4) MGAM - Looking for a bounce
BLL (Ball Corp--$71.32; +2.00; optionable): Packaging & containers. Announced a 2:1 stock split Wednesday, effective February 22!
http://biz.yahoo.com/p/b/bll.html
STATUS: Continued its solid run on the announcement, taking out the buy point with a strong move. After a super run in 2001 that took BLL from 40 to a high earlier this month of 74, BLL pulled back and gave up its 50 day MVA (67.37) but bounced back strong with the split announcement. Today's move took out resistance from its November high and late-December consolidation range at 70, and volume was even stronger at 666,000 (average 252,400). BLL is now facing its high of 74. Watching that level carefully on a continued move, as it will likely need a rest soon and that is an obvious point.
PLAY: Aggressive: Can still jump in on this move on a move over 72 on continued strong volume, and stock and/or March $70 calls to buy (BLL CN - under 100 open interest).
HOTT (Hot Topic--$33.96; +0.06; optionable): Apparel. Splits 3:2 effective February 6.
http://biz.yahoo.com/p/h/hott.html
STATUS: HOTT has been edging up along its 10 day MVA (33.86; 18 day at 33.37), but the last few days has settled back toward that level. The upward action was not the best for a handle to its double bottom, but the dip back to support looks good, especially with the 'shooting star' doji today on big volume (up to 922,200; average 819,800). That is a bullish candlestick, and we will look for HOTT to finally make the strong move it needs to breakout. Target: 40 (watching resistance at the all-time high at 38.20).
PLAY: Breakout: From here or after a test of the 10 day, 34.82 on volume of 1.25 million, with stock and/or March $30 calls to buy (UHO CF - low open interest).. Stop: 32.38.
MGAM (Multimedia Games--$33.90; -1.26; no optionas): Splits 3:2 on or about February 12.
http://biz.yahoo.com/p/m/mgam.html
STATUS: Has again dropped back to the 50 day MVA (34.01) after making another higher low from its last bounce from that level. Not a good pattern, as we know lower highs over a consistent low spell the bearish descending wedge pattern. However, today's action was interesting because the stock dipped all the way back to 30.45 at its low but then came surging back, with very heavy volume pushing it to close back at the 50 day (413,000; average 170,300). With the strong recovery we could see a continuation of the move up in the form of a pre-split bounce. Looking for its to take out its short-term MVA's (18 day at 35.83) and run toward the high, which is the initial target at 39.99.
PLAY: On a move over the 18 day MVA, stock.
SYMC (Symantec--$77.00; +2.81; optionable): Security software. Splits 2:1 effective February 1.
http://biz.yahoo.com/p/s/symc.html
STATUS: After the remarkable move last Thursday (on earnings), SYMC has held on strong, testing its former high (and 10 day MVA, currently 73.43) at Wednesday's low. After that test SYMC headed back up again today, showing a new closing high as volume continued to be strong (3.6 million; average 2.4 million). Watching carefully here, but its holding on and digesting its gains is pretty solid, and we will continue to target 84 on a continued strong move, looking at more positions on strength.
PLAY: For new or additional positions from here, a move over 77.50, with stock and/or April $75 calls to buy (SYQ BO). 73.
CONTINUING CANDIDATES BEST PLAYS:
1) PMI - Cup with handle
2) GNSS - Started back down
3) THC - Test of the breakout
4) RYL - Big gap on earnings
PMI (Pmi Group--$68.68; +0.17; optionable): Surety & Title Insurance. Did not get the announcement Wednesday, but we are still watching, as right in split range.
http://biz.yahoo.com/p/p/pmi.html
BACKGROUND: Based upon our research it does not appear that PMI has ever split its stock. The annual shareholder meeting was on 5-17-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Has pulled back a bit, showing a doji today over its 10 day MVA (68.46), and again tapping near its 18 day (67.76) at its low. PMI has formed a cup with handle since June off another cup pattern that failed at the high of 74.94. A good pattern, although price/volume action over the course of the pattern could be better, and the handle has been erratic. Three times recently PMI has reached up to 70 only to pull back in the pattern, but we are looking for it to settle back here on low volume (down today to 226,100; average 289,400) and make a breakout. Target: 80, watching resistance at the high.
BUY POINT: Breakout: 70.20 on volume of 460,000. Stop: 65.29 (7%).
POSITION: Stock and/or March $65 calls to buy (PMI CM - under 100 open interest).
GNSS (Genesis Microchip--$55.36; -3.32; optionable):
http://biz.yahoo.com/p/g/gnss.html
STATUS: GNSS fell back hard last week, and hit as low as 52.80 Wednesday before recovering. That recovery could not take out the 50 day MVA (60.34), which turned back GNSS today, and the stock fell back on reduced, but still strong volume of 4.15 million (average 2.72 million). We were looking for the bounce and test of the 50 day, and today it dropped through the buy point on a failed test (57). The target is 50, so on continued strong selling we can look at new or additional positions from here.
BUY POINT: A drop through 55 on continued strong volume.
POSITION: March $70 puts to buy (QFE ON).
THC (Tenet Healthcare--$63.66; +0.06; optionable):
http://biz.yahoo.com/p/t/thc.html
STATUS: Testing the breakout. THC broke out from its short handle (formed after gapping up in its awkward, 'flying w' shaped cup in early January) recently, and has tested back after hitting up to 66.40. It is holding up well, maintaining over its former pattern highs (63) and 18 day MVA (62.89). Today saw THC make a loose 'shooting star' doji over the 18 day, hitting an intraday high of 64.50 and moving on volume of 2.17 million (average 1.85 million). Looking for it to hold here, perhaps consolidate for a few sessions, but we will also look for strength on a move up.
BUY POINT: After holding here, a move back over 64.50 on continued strong volume.
POSITION: Stock and/or May $60 calls to buy (THC EL).
RYL (Ryland Group--$73.10; +3.30): Did not get the announcement, but a positive reaction to earnings.
http://biz.yahoo.com/p/r/ryl.html
BACKGROUND: Based upon our research it does not appear that RYL has ever split its stock. The annual shareholder meeting was on 4-25-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: On earnings RYL gapped up today on big volume (up to 510,000; average 351,200), but could not do anything move, closing with a loose doji (intraday high of 74.25). RYL made a fine October-December run, hitting a high of 75.85 in December before testing back to its 50 day MVA (currently 66.29). It bounced in anticipation going toward the announcement, and now is challenging its high. With the gap up to the doji, however, we might have to wait for a new high as that pattern often indicates a dip back. If it can hold its short-term MVA's (70) on that move, we can then look for a solid bounce back up to take out the highs. On a new high, targeting 85.
BUY POINT: From here: 75.97 on continued strong volume. Stop: 71.68 (7%). Test: After a lower-volume test of the 70 level, a move back over 72.50 on strong, above average volume. Stop: 68.
POSITION: Stock and/or April $70 calls to buy (RYL DN).
End Part 2 of 3
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stock watch
stock split
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