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Begin part 3 of 3
THE PLAYS:
New Post-Split Plays:
Play Date: 09/22/2007
LFC (China Life Insurance--$75.94; +0.98; optionable): Chinese life insurance
http://biz.yahoo.com/p/l/lfc.html
EARNINGS: 9-28-07
STATUS: Ascending base. LFC broke out of a very nice seven-month base in early July. The current five week pattern is the second test or consolidation of that initial breakout. The breakout has taken LFC to a new all-time high, and after a very strong break higher on Tuesday after the FOMC rate cut, it worked laterally on low volume to finish the week. A very nice low-volume test of near support. That is going to send it higher on the next leg of this breakout run. This is another strong stock in excellent technical position, combined with outstanding fundamentals growth rates.
Volume: 947.3K Avg Volume: 1.641M
BUY POINT: $77.05 Volume=2.2M Target=$92.95 Stop=$73.89
POSITION: LFC AO - Jan. $75c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/lfc.html
Play Date: 09/22/2007
MBT (Mobile Telesys--$69.72; +1.01; optionable): mobile cellular communications in the Russian Federation
http://biz.yahoo.com/p/m/mbt.html
EARNINGS: 9/4/07
STATUS: Test to Breakout. As with many stocks, MBT shot higher on Tuesday following the FOMC rate cut decision. The move is one out of the 10 week reverse head and shoulders base, pushing MBT to a new all-time high. Good volume surge, and then it tested back to in the week, tapping at the 10 day EMA (66.83) on low, below-average volume. Another stock in one of our favorite by positions, i.e. the first test of the breakout from a nicely formed the base. This is yet another stock with excellent fundamentals, growth rates on top of a solid technical pattern. Looking for MBT to bounce higher once more on rising trade, and that is our entry point.
Volume: 887.5K Avg Volume: 1.658M
BUY POINT: $70.22 Volume=2M Target=$83.95 Stop=$66.69
POSITION: MBT AN - Jan. $70c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/mbt.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.
AAPL: Tentative 10-17-07
ACH: Tentatively set for mid-November
AMX: Forecast 10-23-07
ATW: Researching date
BG: Forecast 10-17-07 or 10-206-07
BHP: Forecast 10-23-07
BIDU: Tentative 10-30-07
BLUD: Forecast 9-28-07
CELG: Forecast 10-25-07
CMG: Tentatively date is 10-30-07
CNQ: Forecast 11-1-07
COP: Potential on 10-24-07
CVX: Forecast 10-24-07
DO: Forecast 10-22-07 or 10-26-07
FCN: Forecast 10-10-07
FLIR: Forecast 10-25-07
GPRO: Forecast tentatively 10-31-07, Halloween; trick or treat?
HRS: Forecast 10-24 or 10-26-07
IBM: Forecast 10-16-07
JEC: Forecast 11-6-07
MM: Forecast 10-16-07
OII: Forecast 10-30-07
PCU: Forecast 10-27-07
RIG: Forecast 10-31-07
SII: Forecast 10-22 or 10-23-07
UA: Forecast 10-30-07
NEW PRE-ANNOUNCEMENT PLAYS
Play Date: 09/22/2007
CMI (Cummins--$131.54; +1.38; optionable): Engines, etc.
http://biz.yahoo.com/p/c/cmi.html
EARNINGS: 10-25-07
STATUS: Breakout test. CMI made is a lot of money earlier in the year with its stellar run into August. We said we were going to get back in when it set up again, and it did, forming a nice 7 week cup with handle of sorts. Then we just watched as it revved up & charged higher Tuesday right after the FOMC announcement. Good move (for the stock, that is). Of course a good breakout usually leads to a good test, and after a gap higher Wednesday, CMI slipped lower. It moved laterally on very low trade Thursday and Friday, holding the gains as it takes a breather. That is what we like to see. It may take a session or three to complete the pause to consolidate that big Tuesday surge, but when it starts to move back up we are going to start to move in and participate in the rest of the breakout run.
Volume: 1.353M Avg Volume: 2.252M
BUY POINT: $132.32 Volume=2.4M Target=$151.95 Stop=$128.11
POSITION: CDM AG - Jan. $130c (62 delta) or CDM AH - Jan. 4135c (51 delta) &/or stock
http://www.investmenthouse.com/cs/cmi.html
Play Date: 09/22/2007
TEX (Terex--$83.59; +0.95; optionable): heavy equipment
http://biz.yahoo.com/p/t/tex.html
EARNINGS: 10/25/2007
STATUS: Cup with Handle. After a strong run from October, 2006 to July, 2007, TEX needed a base to rest at the foundation for a new higher. It fell to the 200 day EMA, and then rebounded to fade back in September to hold just above that key support level. When the Fed cut interest rates, DEX vaulted higher both Tuesday and Wednesday, rising to be early September high, or the "hump" on that move. If then worked laterally Thursday and Friday, holding above the "hump" and the 90 day EMA, moving on much lower below average volume. A nice tight doji Friday, and we anticipate TEX will bounce sharply higher once more after this nice test of support. We like how it has plenty of room to run before it hits the prior highs in the base.
Volume: 1.344M Avg Volume: 1.64M
BUY POINT: $85.22 Volume=2.4M Target=$99.90 Stop=$82.32
POSITION: TEX AQ - Jan. $85c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/tex.html
New buy point on current position:
Play Date: 09/22/2007
AAPL (Apple Computer--$144.15; +3.84; no options): iPhones, iPods, iMacs
http://biz.yahoo.com/p/a/aapl.html
EARNINGS: 10-25-07
STATUS: Ascending base. AAPL disappointed investors early in the month as its new product announcements were overshadowed by a price reduction in the iPhone, a rebate to prior iPhone purchasers, and as more than one commentator has noted, the lack of a split announcement. It held at its 50 day EMA and has since recovered close to the pre-slump prices. Friday it bounced on a good jump in volume up to average, but of course we know that is suspect given the expiration session. Nonetheless, we are hearing that the product sales are through the roof across the line. In the long run, at least with respect to stock performance, it definitely pays to be an innovator as opposed to, say, a copycat as is MSFT (copied/stole the Apple Mac interface, copied other game boxes, copied the iPod, copying the iPhone, and we hear it is coming out with its own version of a Harry Potter story). Looking to buy Apple as it makes its break higher from this 8 week base.
Volume: 40.674M Avg Volume: 39.328M
BUY POINT: $144.78 Volume=4.8M Target=$166.75 Stop=$139.33
POSITION: APV AI - Jan. $145c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/aapl.html
CONTINUING PRE-ANNOUNCEMENT PLAYS
Play Date: 09/20/2007
ACH (Aluminum Corp of China--$62.90; +0.92; optionable): Chinese aluminum
http://biz.yahoo.com/p/a/ach.html
EARNINGS: 11-19-07
STATUS: Breakout test. Another nice tight session trading in a narrow range right on top of the 10 day EMA. This looks like the calm before the storm i.e., the calm before ACH breaks sharply higher to continue its run. To recap: ACH is working laterally the past three weeks, testing back to near support at the 18 day EMA (60.43) as it tests the strong August gap and surge higher on a strong earnings report. May take a few more sessions to finish testing, but all we need to do is just wait for it to show us the break higher.
Volume: 1.139M Avg Volume: 2.088M
BUY POINT: $63.11 Volume=2.8M Target=$75.32 Stop=$60.32
POSITION: ACH BM - Feb. $65c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/ach.html
CONTINUING POST-SPLIT PLAYS
Play Date: 09/18/2007
BRCM (Broadcom--$36.12; -0.28; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/b/brcm.html
EARNINGS: 10-19-07
STATUS: Double bottom w/handle. Gap higher Friday, but he could not complete the breakout fading back to negative on the close. It is still in excellent shape to provide the breakout this week. To recap: Strong volume as BRCM starts to break higher from a short 7 week base at the tail end of a much larger 7 month pattern, a reverse head and shoulders of sorts. Very nice set up for a move higher and the risk/reward position is excellent. Money flow is surging higher ahead of price and it is leading BRCM higher. Ready to move in as it continues higher on this breakout.
Volume: 6.826M Avg Volume: 10.775M
BUY POINT: $36.95 Volume=11M Target=$43.95 Stop=$34.78
POSITION: RCQ AG - Jan. $35c (64 delta) &/or Stock
http://www.investmenthouse.com/cs/brcm.html
CONTINUING LEADER PLAYS:
Play Date: 09/18/2007
MA (MasterCard--$146.56; -2.95; optionable): Credit services
http://biz.yahoo.com/p/m/ma.html
EARNINGS: Early November
STATUS: Cup. Faded back Friday more than we wanted it to, volume remained very low and this has the look of a shakeout in the new handle that is forming to its cup. It may take a few more sessions to finish the test, but it looks to be getting ready for the breakout move. To recap: During all of the credit issues, MA was working laterally over support at 130, putting in the bottom to its current 12 week base. It is just starting up the right side of the pattern, jumping Tuesday on strong volume as the financials finally got some breathing room. Looking to move in as MA continues its surge higher.
Volume: 2.041M Avg Volume: 3.516M
BUY POINT: New: $150.45 (orig. $146.65) Volume=3.8M Target=$172.95 Stop=$141.31
POSITION: MAL AI - Jan. $145c (59 delta)
http://www.investmenthouse.com/cs/ma.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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