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- Modest gains cap an important breakout week.
- Consumers get weary as June retail sales turn sluggish on steadily higher gasoline prices and housing weakness.
- Business sales are not slowing but are increasing.
- Thursday breakout trying to spread out the gains and improve a flattening A/D line.

Here's a trade from "The Daily" and insights into our trading strategy:

Chart by StockCharts.com

Company Profile
STATUS: Ascending base. JADE is the leader in its field, and it has set up a very good pattern to consolidate the strong January through February run. A nice 19 week ascending triangle of sorts using the 50 day EMA (11.23) as support as it made higher and higher lows. Nice volume swell the past week as it moved up off the last test and bumped against the prior highs on Friday. Looking to move in as it makes the breakout, showing some more strong volume as it does.
Volume: 810.069K Avg Volume: 703.362K
BUY POINT: $12.68 Volume=1.1M Target=$14.65 Stop=$11.79
POSITION: UOD JV - Oct. $12.50c (60 delta) &/or Stock

Learn more about "The Daily" with Stock Picks! - Issued 5 Times Per Week

Playing stock splits can be very profitable, but it takes know-how. Our stock split service focuses on three main types of plays:

1) pre-announcement (where we forecast an upcoming split prior to the company making the announcement); 2) pre-split (these plays are made in the days leading up to the actual split day); and 3) post-split plays (plays made after the actual stock split where the stock is showing continued or renewed strength).

Pre-announcements are where we put in the long hours of research, chase down leads and rumors, and pump our contacts for information in order to determine if a split is in the works and to pinpoint an announcement date. Pinpointing the date is our primary goal as this allows us many more options in how we play a split. As we primarily focus on leadership stocks in good technical patterns, if we see the stock make the breakout we will get in earlier and ride the wave of speculation up to or through the announcement. Pinpointing a date and time also allows us to open positions immediately prior to an announcement, minimizing our exposure time to the market whims. We employ this strategy regularly in a number of situations. When we have ridden a stock for a few days, a week, a few weeks, up to the forecast announcement, we often have a lot of profit built in. After all, these are leaders and they attract attention moving into earnings, shareholder meetings, etc. We often sell some positions (all or a partial), lock in the profit, and take positions with higher strike call options near the current stock price at a cheaper cost if the stock is not overextended, i.e., has done all of its running before the forecast announcement. This way we bank some profit from the early run, and take some of that profit to play the actual split. Even if the board pulls a fast one on us and does not announce, we still have profit in the bank. This method also works well when the market is choppy, and we do not want to hold positions long. We can often buy right before the announcement and then sell when we feel the split announcement has run its course and the stock starts to pull back. Narrowing the predicted date and time of the split gives us these options.

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Here's a pre-announcement play and our current analysis.

Chart by StockCharts.com

Company Profile
We love playing leaders not just because they move well and are somewhat immune to market fluctuations, but also because we get many opportunities to make long and short term plays on them as they run higher then consolidate, run then consolidate. CVX is clearly a leader, and in mid-May through June it worked laterally, using the market chop and struggle to form a 4 week flat base. That action caught our attention for another play: the market was struggling, but CVX used the struggle to set up another base, refusing to give up any ground. That is a sign of strength you don't want to ignore.

We put in on the report on 6-25-07 when we saw volume jump higher during the fourth week of its lateral range. Two sessions later it opened lower but then surged back up and through our buy point. We moved in with some stock positions at $83.98 and some September $80 strike call options for $6.20. We were looking for a break higher in its range as our cue to enter. It delivered and we moved in.

This is one of those times when everything clicked. CVX started higher, and in the next two weeks it showed us only one down session, and that was just a 50 cent loss. It rallied into July and only picked up speed as it did. Friday it rallied higher yet again, but started to slide back. After two weeks of running it was time to lock in some gain. We sold some stock for $93.26 (11%) and some of our options for $13.90, pocketing a 124% gain or $770/contract. Thing is, this is not the first time we have played CVX on this run. It showed us a similar breakout and run March through May, and in October to November of 2006. That is why we love leaders: they move higher and they give us many chances to play them over and over again.

Learn more about our Stock Split Report and how we have made gains of 321% with our powerful stock split plays!
Details Here.