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Begin part 3 of 3
THE PLAYS:
New Pre-Split Plays:
Play Date: 10/27/2007
IDXX (Idexx Labs--$120.10; +5.85; optionable): Veterinary and food and water testing products (hydrophobic dogs?). Splits 2:1 on 11-27-07
http://biz.yahoo.com/p/i/idxx.html
EARNINGS: 10-26-07
STATUS: Ascending base. IDXX announced its earnings and split Friday and enjoyed a nice price surge on strong volume, reaching to 125.69 on the high. It peeled back by the close, losing half its session gains. The move broke it out of a 10 week ascending base, taking IDXX to a new all-time high. The fade off of the high looks as if it is going to give us an opportunity to get on this move. Looking for it to hold the Friday close more or less and then resume the upside run. That is when we step in and catch the pre-split run.
Volume: 433.246K Avg Volume: 205.6K
BUY POINT: $120.55 Volume=275K Target=$138.65 Stop=$115.65
POSITION: UID AD - Jan. $120c (57 delta, 74 OI)
http://www.investmenthouse.com/cs/idxx.html
New Post-Split Plays:
Play Date: 10/27/2007
FMCN (Focus Media Holding--$57.06; +2.06; optionable): Chinese advertising service
http://biz.yahoo.com/p/f/fmcn.html
EARNINGS: Late December
STATUS: Breakout test. FMCN gapped higher the last time it announced earnings (late September), clearing a 10 week cup with handle base with a tremendous move. It has spent the past 4 weeks recovering from the hangover that huge updraft caused. Last week it tested and held 55 twice, forming something of a short double bottom at that price level. Looking to move in as it blows higher from here and we want to see the volume surge as it does.
Volume: 2.446M Avg Volume: 3.01M
BUY POINT: $57.75 Volume=4M Target=$67.95 Stop=$54.94
POSITION: QOH AK - Jan. $55c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/fmcn.html
Play Date: 10/27/2007
FTK (Flotek Industries--$49.93; +1.88; optionable): Pumps, etc. for various industries and home gamers as well
http://biz.yahoo.com/p/f/ftk.html
EARNINGS: 11-1-07
STATUS: Test 50 day EMA. FTK has enjoyed quite a run and it made us some money as it did. The past three weeks it has paused, working laterally above near support at the 18 day EMA and the 45 level. Outside of a big reach lower Monday down to the 50 day EMA, it has held that support. Friday volume was up as FTK broke higher once more, trying to clear this consolidation. Looking to move in as FTK breaks past the consolidation and starts the next leg in its uptrend.
Volume: 927.3K Avg Volume: 443.506K
BUY POINT: $50.12 Volume=665K Target=$57.95 Stop=$47.68
POSITION: FTK CJ - Mar. $50c (52 delta, low OI) &/or Stock
http://www.investmenthouse.com/cs/ftk.html
Play Date: 10/27/2007
RIO (Companhia Vale Do Rio Doce--$35.50; +2.01; optionable): Steel & Iron
http://biz.yahoo.com/p/r/rio.html
EARNINGS: Announced 10-25-07
STATUS: Flying plateau. Why not another steel company? We can see which one makes the best move and buy in or we can buy them both. RIO announced earnings after the Thursday close and gapped higher Friday, moving toward the breakout from its 4 week lateral range it has used to consolidate the strong August through September run after breaking out from an 8 week base. Volume moved up just above average Friday as it made the move, and we want to see continued stronger trade as RIO makes the break out of this consolidation range.
Volume: 24.651M Avg Volume: 29.676M
BUY POINT: $36.12 Volume=34M Target=$43.95 Stop=$33.89
POSITION: RIO AG - Jan. $35c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/rio.html
Play Date: 10/27/2007
SAY (Satyam Computer Services--$29.84; +1.86; optionable): ITS services
http://biz.yahoo.com/p/s/say.html
EARNINGS: Announced 10-23-07
STATUS: Breakout test. SAY exploded higher Tuesday on s strong earnings report, gapping out of a 14 week reverse head and shoulders pattern (with a double bottom as the bottom of the head). It tested Wednesday and Thursday in the overall market selling, with the Thursday intraday test filling the Tuesday gap higher. Friday it was back up, gapping higher and closing near the session high on strong, rising volume. Like how it tested and filled the gap already, setting SAY for a continued run higher to what is a new all-time high. Very solid and very strong.
Volume: 2.347M Avg Volume: 1.379M
BUY POINT: $30.12 Volume=2.3M Target=$35.95 Stop=$28.48
POSITION: SAY AF - Jan. $30c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/say.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: Jobs again made no announcement but AAPL continues to perform.
ACH: Tentatively set for mid-November
ATK: Tentative 11-1-07
ATW: Likely to announce in January. Continued the rebound off the 90 day SMA as the drillers continued their recovery.
BG: No split announcement last week but a strong move higher.
BHP: Looking to the first week of November
BIDU: Tentative 10-30-07
BUCY: Early November.
CMG: Tentatively date is 10-30-07. Moving up on sharp volume.
CNQ: Forecast 11-1-07
DVN: Forecast 11-7-07. Surging.
GPRO: Forecast tentatively 10-31-07, Halloween. Trying to set up for a treat.
HRS: 11-1-07
JEC: Forecast 11-6-07
MM: Forecast early November
OII: Forecast 10-31-07
PCP: Researching date
PCU: No split last week but just letting PCU continue the move for us.
RIG: Forecast 10-31-07
SCHN: Potential for 10-29-07
SRDX: Researching date
STLD: Researching date
TIF: Last week of November
UA: Forecast 10-30-07
NEW PRE-ANNOUNCEMENT PLAYS
Play Date: 10/27/2007
AMZN (Amazon.com--$90.00; +1.79; optionable): Internet sales
http://biz.yahoo.com/p/a/amzn.html
EARNINGS: Announced 10-23-07
STATUS: Test 50 day EMA. AMZN was a great money maker for us in its prior run that started, as a matter of fact. As AMZN came off a 50 day EMA (87.53) test. AMZN had the misfortune of running up $10 on the day of its earnings announcement, and with that kind of lead in it was hammered on the news, gapping lower Wednesday. It undercut the 50 day EMA on the low but it recovered that session to hold that important support level. It held there Thursday and Friday to conclude the week, moving laterally on lower, average volume. Earnings were stellar, and the fact that AMZN held the 50 day after a great August and September run is fairly typical action, gap lower or not on Wednesday. Thus we are looking for AMZN, which is growing its business at a stellar pace, to start back up off this support and run again, and when it does we want to be ready to buy in when it does.
Volume: 8.83M Avg Volume: 8.703M
BUY POINT: $91.45 Volume=10M Target=$109.75 Stop=$87.31
POSITION: ZQN AR - Jan. $90c (56 delta) &/or Stock
http://www.investmenthouse.com/cs/amzn.html
Play Date: 10/27/2007
LFC (China Life Insurance--$101.14; +1.63; optionable): Chinese life insurance
http://biz.yahoo.com/p/l/lfc.html
EARNINGS: Late November
STATUS: Test 18 day EMA. LFC has enjoyed a tremendous run since the August test of the 50 and 90 day MA. It broke higher two weeks back on strong trade but immediately fell back and tested the 18 day EMA to start last week. It bounced and moved laterally above the 10 day EMA (99.27) on low trade, catching a breather here. This is a momentum play, but the China stocks are getting a lot of money and that keeps the momentum going. Looking for LFC to finish this breather this week while holding the 10 day EMA, and then we look to move in as it continues the break higher.
Volume: 964.3K Avg Volume: 2.041M
BUY POINT: $104.68 Volume=3M Target=$119.95 Stop=$99.89
POSITION: LFC AT - Jan. $100c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/lfc.html
Play Date: 10/27/2007
MT (Arcelor Mittal--$81.57; +2.63; optionable): Steel & iron
http://biz.yahoo.com/p/m/mt.html
EARNINGS: Mid-November
STATUS: Flying plateau. MT formed a 4 week tight, flat range above the 10 day EMA (78.70), consolidating the September breakout and run from a 10 week reverse head and shoulders base. The flying plateau got a bit choppy with a couple of gaps lower the past two weeks, but each time it gapped right back up the next session. Friday MT started the breakout above the plateau; as it continues this breakout move we make our move into the play.
Volume: 2.217M Avg Volume: 2.471M
BUY POINT: $81.88 Volume=2.8M Target=$97.95 Stop=$78.65
POSITION: MT AP - Jan. $80c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/mt.html
Play Date: 10/27/2007
SNP (China Petroleum & Chemical--$150.51; +0.02; optionable): Chinese oil and gas
http://biz.yahoo.com/p/s/snp.html
EARNINGS: 10-30-07
STATUS: Test 18 day EMA. SNP broke out from a 12 week base in late September, rallied nicely, tested, and then exploded higher the second week of October, reaching 178.91 on the high. It spent the past 7 sessions testing the move, coming back to hold just over the 18 day EMA (146.13) as it tests on lower, below average volume. This is just the second test of the breakout, and though the second leg higher was a monster, that still leaves SNP with plenty of upside. Heck, it can hit our initial target without having to move past that October high; have to like that. Three nice dojis to end the week, and looks as if SNP is just about ripe to resume the move higher.
Volume: 511.2K Avg Volume: 760.103K
BUY POINT: $151.88 Volume=900K Target=$174.95 Stop=$147.68
POSITION: SNP AJ - Jan. $150c (55 delta)
http://www.investmenthouse.com/cs/snp.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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