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Begin part 3 of 3
THE PLAYS:
Good movers: BIDU; COP; BHI; BUCY; BWLD; CCJ; CX; DO; GME; MA; MRO; MICC; RIMM; TRMB
New Post-Split Plays:
Play Date: 06/16/2007
GES (Guess? Inc.--$49.38; +0.17; optionable): Apparel
http://biz.yahoo.com/p/g/ges.html
EARNINGS: Announced 6-5-07
STATUS: Flying plateau. GES made us a nice gain as it surged in June ahead of its earnings, breaking out from a 14 week flat base. Nice run, making a final gap when earnings were announced. We booked a nice gain on that move. GES has moved laterally the past two weeks, consolidating that gain, and importantly, giving up no ground, not even during the market selling. Friday volume spiked up as GES held its tight lateral range. It had one of those Monday as well. We call those 'get ready' spikes because they indicate big accumulation as the stock holds steady, crouching for the jump higher. Moves can be explosive from this type of pattern, so we are looking to move in fast when GES starts its break higher. Strong stock with a good pattern and with some of the best earnings growth rates in the market.
Volume: 2.297M Avg Volume: 1.463M
BUY POINT: $50.04 Volume=2.2M Target=$57.75 Stop=$48.04
POSITION: GES IW - Sept. $47.50c (65 delta) or GES IJ - Sept. $50c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/ges.html
New Leader Plays:
Play Date: 06/16/2007
BID (Sothebys--$48.97; -0.52; optionable): Auction houses
http://biz.yahoo.com/p/b/bid.html
EARNINGS: Announced 5-7-07
STATUS: Double bottom. BID rallied nicely ahead of its earnings, putting in a 12 point run. It bounced on its earnings report after selling some into the number, but it could not take out the prior peak that took it to a new all-time high. It rolled over and fell into this 8 week base to rest and recuperate for another run. Gapped higher Thursday on strong volume, clearing the 'hump' in the middle of the 'W.' It may form a handle here over the next few sessions, but that big volume surge Thursday requires us to be ready to move in if it continues the break upside. Another stock that is sporting excellent earnings growth rates to go along with a solid pattern.
Volume: 1.217M Avg Volume: 1.432M
BUY POINT: $50.35 Volume=2.1M Target=$57.95 Stop=$48.44
POSITION: BID JJ - Oct. $50c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/bid.html
Play Date: 06/16/2007
UTHR (United Therapeutics--$64.85; +0.59; optionable): Biotechnology
http://biz.yahoo.com/p/u/uthr.html
EARNINGS: Announced 5-1-07
STATUS: Test 18 day EMA. After a long 18 month basing process UTHR broke higher in May. It rallied to 68 on that surge; impressive move. It has spent the past 4 weeks testing that run, coming back to the 18 day EMA (65), holding at that near support and the October midpoint high in the base. Basically a big 14 month double bottom with handle in the last part of the base. Excellent money flow is leading the price. The volume on the last run higher was solid and the pullback volume has been below average; buyers on the upside, not many sellers on the downside. Excellent set up for the next break higher.
Volume: 713.904K Avg Volume: 704.698K
BUY POINT: $65.48 Volume=1.1M Target=$75.45 Stop=$63.88
POSITION: FUH KM - Nov. $65c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/uthr.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.
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 typically 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: No split announced last week as BA tested the prior week's low and then bounced. If it turns back up from here at 98 on some solid trade we are looking at new positions.
BHI: Still moving higher. Excellent.
BIDU: Forecast in June. Nothing yet, but BIDU continues the rebound.
CELG: Tentatively forecast mid-June. It is getting to the time but CELG continues to struggle. It is at the 50 day EMA as it comes off the 90 day. Still has work to do to give us an entry point.
CHE: Forecast mid-June. Still a nice pattern, still looking for the announcement.
CHTT: Forecast third week of July. Trying to break higher off the 50 day EMA.
CLB: Forecast third week of July.
CNQ: Looked for a split in mid-May but it was not coming. Researching the next date.
CTRP: Researching next date as no announcement with its strong earnings. Still testing the 50 day EMA.
DVN: Forecast last week of June. Rallying nicely last week, breaking to yet a nother new high.
GSOL: Researching the date.
HURN: Wildcard. Researching date.
MA: Researching the next date. Nice.
NOV: Forecast late July. Great week, slowing a bit Friday.
OSK: Forecast last week of July, first week of August. Breaking higher Friday, clearing the early June highs.
RIMM: Early June. Nothing thus far from RIMM, but RIMM is moving higher once more.
RL: No announcement with earnings.
SSYS: Forecast third week of July. Good week last week but still no breakaway.
SU: Forecast third week of July.
TMO: Researching to pinpoint the date. Great recovery last week off the 50 day EMA test.
XTO: Tentatively set for early June, but may take until early August. Great break higher
VIP: Researching date. The comeback kid last week.
VMC: Still holding the range though at the bottom of late, bouncing up to the top of the range last week. Now we see if it can make the break higher.
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 06/16/2007
CLB (Core Labs--$94.45; +0.80; optionable): Oil and gas service company
BACKGROUND: Last announced a 2:1 split on 4-20-06 at $58.20.
http://biz.yahoo.com/p/c/clb.html
EARNINGS: Announced 4-23-07
STATUS: Double bottom. CLB has formed a 5 week double bottom using the 50 day EMA (90.36) as support. It bounced nicely to end last week, moving up to the highs in the recent 6 week range. This is acting to consolidate the break higher from a 5 month cup with handle breakout that could not put much gain after the breakout move. This last base looks to have set it up for a renewed breakout move. Volume has been low so just want to see some good trade as it makes its move.
Volume: 132K Avg Volume: 263.231K
BUY POINT: $95.12 Volume=325K Target=$109.50 Stop=$91.75
POSITION: CLB IS - Sept. $95c (54 delta, 97 OI)
http://www.investmenthouse.com/cs/clb.html
Play Date: 06/16/2007
CLF (Cleveland-Cliffs--$80.74; +4.29; optionable): Steel and iron
http://biz.yahoo.com/p/c/clf.html
EARNINGS: Announced 4-26-07
STATUS: Test 50 day EMA. Well, CLF was making a nice descent toward the 50 day EMA (74.49) on a downside play when it gapped higher Friday on some tremendous volume, the best trade since the last run higher. It almost fully tested that 20 point gallop from late May to early June before the turn. The Friday move closed it above the 10 and 18 day EMA (80.24, 79.71). The strength of the turn sure looks like CLF has found its buyers once again. If it can continue we are going to move in and see if it can make a run toward 100 for us.
Volume: 3.392M Avg Volume: 1.319M
BUY POINT: $81.35 Volume=2.4M Target=$94.95 Stop=$78.08
POSITION: CLF JP - Oct. $80c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/clf.html
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 06/09/2007
GSOL (Global Sources Ltd.--$21.50; +0.78; no options): Marketing services in China
BACKGROUND: Last split a whopping 11:10 split on 3/4/05.
http://biz.yahoo.com/p/g/gsol.html
EARNINGS: 8-14-07
STATUS: Test breakout. Great action last week in the selling and in the recovery, just minding its own business and setting up for the continued breakout move. Well poised to make the break. To recap: GSOL broke out of a 5.5 month in late May, moving on some very nice volume. It got caught in the selling last week and gave the breakout back on Thursday. Friday it bounced right back up on lower but still above average volume (not much lower volume at that). Great breakout, nice recovery, and looking for another good upside move on continued solid trade to give us the buy point.
Volume: 150.203K Avg Volume: 221.754K
BUY POINT: $21.65 Volume=300K Target=$25.95 Stop=$20.13
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/gsol.html
Play Date: 05/26/2007
CTRP (Ctrip.com International--$73.68; +0.58; optionable): Chinese travel services
BACKGROUND: Last split 2:1 on 4-11-06 at $85
http://biz.yahoo.com/p/c/ctrp.html
EARNINGS: 5-16-07
STATUS: Test 50 day EMA. Continues testing the 50 day EMA (72.44), holding key support as it prepares for the next break higher. It broke out from a 14 week base in mid-May (earnings) and rallied close to 85. It has fully tested that move and is in perfect position to make the break higher. We will be patient and let it show us the break higher. When it goes it is likely to make a strong move.
Volume: 236.859K Avg Volume: 316.176K
BUY POINT: $75.25 Volume=425K Target=$89.95 Stop=$71.55
POSITION: QCT IO - Sept. $75c (61 delta) &/or Stock
http://www.investmenthouse.com/cs/ctrp.html
CONTINUING PRE-SPLIT PLAYS:
Play Date: 06/14/2007
CXW (Corrections Corp of America--$64.90; +0.39; optionable): Private prisons. Splits 2:1 on 7-9-07
http://biz.yahoo.com/p/c/cxw.html
STATUS: Test 18 day EMA. Gapped higher Friday but no volume to push the move yet. Of course it is a pre-split, so if it can continue the move this week we are looking to move in and catch the rise as this leader moves higher again after a short but sweet consolidation. To recap: CXW broke higher from a 7 month base on base pattern in late April, and it is starting its third bounce off the 18 day EMA as it moves toward its July split date. It is still working laterally here, setting up nicely for the next break higher. It will likely be explosive so we are going to be ready to move in quickly when it hits the buy.
Volume: 278.9K Avg Volume: 430.838K
BUY POINT: $64.89 Volume=425K Target=$72.95 Stop=$63.54
POSITION: CXW IM - Sept. $65c (51 delta) or CXW HL - Aug. $60c (69 delta, no OI) &/or Stock
http://www.investmenthouse.com/cs/cxw.html
Play Date: 06/14/2007
FLO (Flowers Foods--$33.79; +0.27; optionable): Process packaged goods. Splits 3:2 on 7-2-07
http://biz.yahoo.com/p/f/flo.html
STATUS: Test 18 day EMA. Gapped higher Friday on some strong volume, but it closed well off the high so we did not bite. It held above the 10 day EMA (33.67), and if it continues higher we are looking to move in. To recap: After breaking out from an 8 month base in February, FLO has made a steady climb higher up the 50 day EMA. It is setting up for its third run higher following the breakout, this time holding higher than the 50 day EMA. Volume jumped higher and back above average Thursday as FLO started back up. Very nice action that looks ready to resume the pre-split run.
Volume: 424K Avg Volume: 314.565K
BUY POINT: On a continued move from here (orig. $33.78) Volume=400K Target=$40.55 Stop=$32.89
POSITION: FLO JF - Oct. $30c (70 delta, low OI) or FLO HF - Aug. $30c (70 delta, low OI) &/or Stock
http://www.investmenthouse.com/cs/flo.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 05/31/2007
CERN (Cerner--$55.91; +0.46; optionable): Healthcare information services
http://biz.yahoo.com/p/c/cern.html
EARNINGS: 4-19-07
STATUS: Test 50 day EMA. Volume finally started higher Friday, moving above average as CERN gapped higher and through the 10 and 18 day EMA. Set up well for a nice run off the 50 day EMA, and if it continues this move on solid trade we are ready to move in. Very nice set up.
Volume: 850.779K Avg Volume: 800.737K
BUY POINT: $56.25 Volume=1.2M Target=$66.95 Stop=$54.05
POSITION: CQN IY - Sept. $57.50c (50 delta, 256 OI) or CQN IK - Sept. $55c (63 delta) &/or Stock
http://www.investmenthouse.com/cs/cern.html
CONTINUING DOWNSIDE PLAYS:
Play Date: 06/12/2007
AMR (AMR Corp.--$25.91; -0.02; optionable): American Airlines
http://biz.yahoo.com/p/a/amr.html
EARNINGS: Announced 4-18-07
STATUS: Put. Tried to rebound to end last week, but Friday it showed a tombstone doji below the 10 day EMA (26.20), and that indicates this little bounce to near resistance has peaked out. Just looking for it to roll over and volume to pick up as it does. Moved up the buy point a bit to accommodate this last bounce up to resistance. To recap: AMR is in a continuing downtrend since peaking in January and February with a double top. It slid down the 10 and 18 day EMA through May and then rebounded to the 50 day EMA, coming up for air. Just as a stock will use the 10 and 18 day EMA as support as it rallies after a breakout, it will also use the 10 and 18 day EMA as resistance after a breakdown. Volume was up Tuesday as AMR broke down toward the lows it has held the past 6 weeks. If they give way it is heading lower, and our initial target may be conservative. A move to that target lands a 44%ish gain.
Volume: 6.189M Avg Volume: 7.982M
BUY POINT: $25.31 Volume=9M Target=$22.55 Stop=$26.08
POSITION: AMR TY - Aug. $27.50p (-58 delta)
http://www.investmenthouse.com/cs/amr.html
Play Date: 06/07/2007
BIG (Big Lots--$30.22; -0.06; optionable): Discount variety stores
http://biz.yahoo.com/p/b/big.html
EARNINGS: Announced 5-31-07
STATUS: Put. Finished the week still trying to get through the 10 day EMA (30.69), making it briefly Friday before turning over and closing slightly lower. Still looking for BIG to run out of gas here and fall to close that mid-March gap. Volume was back above average Friday as it reversed and closed lower, indicating some sellers moved in and sold it pretty aggressively when it made the move over near resistance. Looks ready. To recap: Big gapped higher on its earnings but then reversed course on high volume. It tried to breakout from its 9 week base but it failed. It tried to set up above the 90 day SMA but broke below that level. There is a gap higher from March, and the inability to hold a gain on earnings indicates it is going to fill that gap down at 26ish. Our initial target is much more conservative, but if it is selling we will let it fade. A move to the target lands a 43% gain.
Volume: 2.546M Avg Volume: 2.392M
BUY POINT: $29.86 Volume=3M Target=$27.80 Stop=$30.45
POSITION: BIG SF - July $30p (-40 delta)
http://www.investmenthouse.com/cs/big.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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