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Weekend Newsletter for
September 2, 2007
Table Of Contents 1) MARKET SUMMARY 2) STOCK SPLIT PLAY 3) TECHNICAL PLAY 4) COVERED CALL PLAY |
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| | Stock Split Notices Investing Q & As Glossary |
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1) MARKET SUMMARY
> >From "The Daily" at InvestmentHouse.com
Stocks start strong and hold it to the close.
- The news was good enough to close out the week with gain.
- Bernanke speech shows his eye is on the ball, but does he need some glasses?
- Inflation as measured by the PCE continues its positive trend.
- The game starts anew this week with higher volume and a load of economic data.
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Market Summary (continued)
Bernanke was still warming up in the bullpen when the latest round of inflation data was released, the July PCE. It posted a second consecutive month at 1.9% year/year, within the Fed's comfort zone. Incomes came in at 0.5%, topping the 0.3% expected and pushing the year/year gains to 6.6%. That is not the crappy growth rate we are supposedly suffering through according to those on the campaign trail. Of course truth is typically the casualty of politics. In any event, even with Bernanke still to come investors appeared quite chipper as futures jumped sharply on the data.
There was another goose to the pre-market trade as the President's office announced President Bush would present a proposal to help alleviate some of the mortgage issues. The prospect of the executive office working in conjunction with the Fed had investors almost downright giddy. Futures were up in the 20 point range on NASDAQ and SP.
Of course, there is always the issue of whether a very strong open can hold, particularly when the market is still in a choppy mode, still trying to find its footing, and a major address by the Fed chairman is still to come. Indeed, stocks started to test immediately after the strong open. They were still positive but off their highs when the Bernanke text was released. The immediate reaction was lower, but it was not a dive downside, and after the market got over the fact that Bernanke was not ready to cut on Tuesday it rebounded. Didn't hurt that Chicago PMI was 53.8, topping expectations of 53.0.
Read "The Daily" Entire Weekend Summary
Here's a trade from "The Daily" and insights into our trading strategy:
Company Profile
STATUS: Double bottom w/handle. A new issue in November 2006, AFSI rallied nicely and is now forming its first base, a 7 week double bottom that has formed nicely during the market selling. It basically used the selling to form up this base that gave it a good rest and is setting up the next breakout and run higher. Some top earnings growth rates to match the excellent pattern.
Volume: 174.527K Avg Volume: 680K
BUY POINT: $16.75 Volume=1M Target=$20.95 Stop=$15.58
POSITION: - Stock (no option chain)
Learn more about "The Daily" with Stock Picks! - Issued 5 Times Per Week
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** SCOTTRADE **
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2) Stock Splits 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).
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For post-splits, we can play them as we would pre-splits (very short term), but we prefer to stretch our horizons, playing the trend. When playing options, we look further out, 2 or more months at least. We let the trend carry us along if there is one, but we will also take profits if the technical pattern degenerates, e.g., breaks a trendline. The main difference between post-splits and pre-splits plays is that we really have to like the pattern. Pre-splits can run right before their splits even with poor technical indicators. For post-splits, we are looking at the stocks from more of a longer term "would I buy this stock at this juncture?" position. Now there are times when a hot stock splits and investors pile in to get in while the stock is 'cheaper.' We play those, but with more of a short-term, pre-splits mentality in that we will be ready to get out fast if the momentum fades.
Remember, everything we do has to pass muster with the market that day ... don't fight the market on these plays.
Listen to Stock Split Report Editor Jon Johnson's
stock split interview on CNBC-TV [ Broadband | Dial-up ]
Here's a post-split play and our current analysis.
Company Profile
EARNINGS: 7-26-07
STATUS: Ascending base. POT had its ups and downs during the recent selling, suffering a sharp sell off in mid-August, but it caught itself at the 90 day MA and rebounded. The result is a 7 week ascending base where POT is working off its excess while holding its gains. Obviously that is a sign of strong stock. POT finished the week gapping higher toward the base high near 90. It may test some more before making the breakout, but with the new money coming back to the market next week we want to be ready to get in on POT as it makes its break.
Volume: 1.973M Avg Volume: 3.284M
BUY POINT: $89.11 Volume=4.9M Target=$106.95 Stop=$85.05
POSITION: PYP LR - Dec. $90c (54 delta) &/or Stock
Learn more about our Stock Split Report and how we have made gains of 321% with our powerful stock split plays!
Details Here. |
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3) TECHNICAL PLAY Company Profile
EARNINGS: 8-2-07
STATUS: Cup. MM is starting move up the right side 4 month up base, accelerating out of the bottom of the pattern with a nice volume surge Friday that pushed it through its 90 day SMA (45.96). Metals are coming back to life and MM is a solid leader in the field and it is set up to make a strong run higher.
Volume: 408.7K Avg Volume: 323.959K
BUY POINT: $47.25 Volume=400K Target=$54.45 Stop=$45.88
POSITION: MM AM - Jan. $45c (63 delta) &/or Stock
Learn more about our Technical Traders Report - Issued 5 Times Per Week |
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4) COVERED CALL PLAY Company Profile
Learn more about our Covered Call Tables - 8 Tables Updated 5 Times Per Week |
PREMIUM SERVICES
IH Alerts: InvestmentHouse.com's Best of The Best Plays!
Stock Split Report: Forbes.com Best of the Web
Covered Calls: 8 Tables with nightly updates - energize your portfolio!
Tech Traders: Breakouts, wedges, etc...focusing on stocks ready to move now!
The Daily: "The Daily" is a must read for all investors!
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The foregoing is commentary for informational purposes only. All statements and expressions are the opinions of Online Investment Services, LP., or Split Ventures, Ltd. This information is 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 the related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolios of writers for this issue may, in some instances, include securities mentioned herein and on the related 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. No one associated herewith receives compensation in any manner from any of the companies that are discussed in this newsletter or on the related websites.
This email was sent to ~~EMAIL~~.
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