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stock split, stock research
Begin Part 3 of 3
CONTINUING CANDIDATES BEST PLAYS:
1) TGIC - Looking good in its consolidation. Good sector.
2) TGH - Forming a nice handle
3) RYL - Could go either way from here
4) DHR - Needs to settle down on a test
5) APPB - Made the move down
6) THC - Ditto!
7) GOSHA - You guessed it . . . still waiting
8) WLP - Could see a quick bounce play
TGIC (Triad Guaranty--$41.80; -0.05; optionable):
http://biz.yahoo.com/p/t/tgic.html
BACKGROUND: Last announced a 2:1 split on 9-18-97 at a stock price of $28.25. The annual shareholder meeting was on 5-10-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Looking like it could make another move. TGIC made a breakout from its cup with handle last week, finally getting some solid volume behind the move, and now has formed a consolidation over the 10 day MVA (41.25). This is nice action, as TGIC has pulled laterally on declining volume, Friday again tapping the 10 day at its low before closing with a doji with a second consecutive volume spike (up to 111,000; average 43,500). Looking for another breakout. Target: 49.
BUY POINT: Over 42.39 on minimum 58,000. Stock: 39.52.
POSITION: Stock.
TGH (Trigon Healthcare--$74.88; -0.01; optionable):
http://biz.yahoo.com/p/t/tgh.html
BACKGROUND: Based upon our research it does not appear that TGH has ever split its stock. The annual shareholder meeting was on 4-25-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: TGH made a nice breakout from a 3-month cup with handle in January, and after a good run has pulled back into another handle to its larger, 13-month cup with handle base (left-side high 81.50). TGH saw some high volume on it most recent move up and reversal, but has settled down nicely over its 18 day MVA (74.24). The last two sessions it has tested that support at its low, showing much lower volume (up to 110,500 on Friday's doji; average 195,000). Shaping up nicely for the next move. Our original target for positions taken last month was 84, although we looked at taking some money off the table when the stock appeared to be topping (it was) last week. If it can make a new breakout move, targeting 92.
BUY POINT: From here: Over 76 on above average volume. Stop: 70.77 (7%; 50 day at 71.28). Breakout is over the recent high at 79, with volume of 300,000. Stop: 73.56.
POSITION: Stock and/or July $70 calls to buy (TGH GO - under 100 open interest).
RYL (Ryland Group--$80.40; +0.10; optionable): Residential construction.
http://biz.yahoo.com/p/r/ryl.html
BACKGROUND: Based upon our research it does not appear that RYL has ever split its stock. The annual shareholder meeting was on 4-25-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Has been impressive as it makes its way up after breaking out of a reverse head and shoulders in December. RYL took a strong bounce from its 50 day MVA (currently 72.10, then 65) in January, and on its most recent pullback held support at the 18 day (77.37). This week RYL has made its way back to the recent high, showing consecutive dojis the last three sessions. We will see from here if RYL can make a higher low on a pullback, continuing to use the 18 day as support, and form an ascending wedge to set up a breakout. We have been riding position toward a target of 85, but on a strong move over the high (81.62), we will adjust the target to 90.
BUY POINT: New high: 81.72 on volume of 500,000 (average 383,000, Friday down to 235,400). Stop: 76.
POSITION: Stock and/or July $75 calls to buy (RYL GO).
DHR (Danaher--$66.10; +0.77; optionable):
http://biz.yahoo.com/p/d/dhr.html
BACKGROUND: Last announced a 2:1 split on 3-6-98 with a board meeting. The stock price was $70. The annual shareholder meeting was on 5-1-01 at which time authorized shares were increased. The company has enough shares for a 2:1 split.
STATUS: Received an upgrade and broke out Wednesday with a gap up, but has not been able to do much after that move. DHR has hung in, showing a 'star' doji Friday after testing near its prior pattern high (64.25) at is lows of 64.51 (also hitting as high as 67.37 Friday). Volume dipped to 1.12 million (average 1.08 million). With this action we could see another test back, but are still looking for DHR to hold 64. If it shows strong support there, we will look at new or additional positions with a run back up on continued strong volume. Targeting 72 (high is 69.81).
BUY POINT: Test of 64: On a lower-volume test that holds 64, a run back over 65 on continued strong volume. Stop: 60.54 (7%).
POSITION: Stock and/or June $60 calls to buy (DHR FL).
APPB (Applebee's International--$33.80; -1.05; optionable):
http://biz.yahoo.com/p/a/appb.html
STATUS: APPB was one that we were looking at flipping to a downside play after its recent action. The stock fell hard Thursday to its 50 day MVA (34.88) after having flirted with that level several times in the last week. With the high volume drop, it was time to get ready to sell any remaining positions and jump to the downside. Friday we got that move, as APPB sailed through the put buy point with continued strong volume (down to 672,900; average 421,600). The target on the play is the 200 day MVA, at 31. We can still add new or additional positions if we get a reflex bounce after the last two sessions of hard selling.
BUY POINT: For new or additional positions, after a test of the 34.50-35 range, a drop back through 34 on continued strong volume.
POSITION: May $40 or $45 puts to buy (AQB QH or QI - check deltas, etc. with your broker as unavailable at the time of writing. April will be out Monday).
THC (Tenet Healthcare--$60.50; -1.55; optionable):
http://biz.yahoo.com/p/t/thc.html
STATUS: THC has gone into a power dive. The stock showed good moves recently on a breakout from a 'flying w,' but after testing the breakout formed bearish double tops. We were wary of a drop through the short-term MVA's (then 64), and THC took that level out Wednesday and dove through the 50 day (62.11) the next session, recovering on huge volume from an intraday low of 60.32. After that wild day, we were looking for a possible temporary bounce before the free-fall, but Friday THC just continued to drop. Volume was down but strong at 3.02 million (average 1.76 million). The target is the 200 day MVA (55.85). The low Friday was 59.80.
BUY POINT: We could get that bounce this time, and after a test of 61-61.50, looking for a strong drop back through 60.
POSITION: May $65 or $70 puts to buy (THC QM or QN - check open interest, delta, etc. as not available at the time of writing. April will be available Monday).
GOSHA (Oshkosh--$41.65; -0.05; no options):
http://biz.yahoo.com/p/g/gosha.html
BACKGROUND: Last announced a 2:1 on 8-10-98 at a stock price of $20. The annual shareholder meeting was on 5-4-01 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
STATUS: We will continue to be patient with GOSHA as it stays in this consolidation, keeping buy points in mind and ready to act if we get the alert and volume is what we want. Over the last few weeks, GOSHA's ascending wedge pattern has tightened into tight lateral consolidation along the short-term MVA's (41.45), and the 50 day MVA has drawn close at 40.15. GOSHA tapped the 50 day its low Wednesday, but although it rebounded it again could not break out, Friday showing another doji on low volume (23,200; average 44,600). Good money flow and relative strength. Target: 50.
BUY POINT: 43.10 on volume of 61,000. Stop: 40.08 (7%).
POSITION: Stock only.
WLP (Wellpoint Health Networks--$127.95; +1.16; optionable): Beat the street with earnings Monday and is due for a split.
http://biz.yahoo.com/p/w/wlp.html
BACKGROUND: Based upon our research it does not appear that WLP has ever split its stock. The annual shareholder meeting was on 5-8-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: After a move up on earnings earlier in the week, WLP gapped back to the short-term MVA's (18 day at 126.18) Thursday, holding on and pushing back up Friday as volume remains strong (940,000; average 514,000). With the strong volume on the gap back and hold of support, we are looking at WLP showing another bounce from the 18 day. Although we are targeting longer-term positions for 140, this play sets up a quick bounce play with options that can net us some quick profits. Target on the short-term move: 134.
BUY POINT: A move over 128.50 on continued strong volume. Stop: 124.
POSITION: April $120 or $125 calls to buy (WLP DD or WLP DE - check deltas, etc. with broker as unavailable at the time of writing).
POST SPLITS BEST PLAYS:
1) VAR - Still holding up strong
VAR (Varian Medical--$39.79; +0.09; optionable): Split 2:1 on 1-16-02.
http://biz.yahoo.com/p/v/var.html
STATUS: Settling back again. VAR has made a great move, breaking out of a 'flying w' with handle formed since November, and making another move this week after pulling back into a nice handle-type consolidation to test the move. Wednesday VAR reached up to a new high at 40.75 but pulled way back to close, and coupled with the big volume this was a signal that we could get a pullback. VAR has held on well, however, showing a loose doji Friday while holding over the 10 day MVA (39.10), with volume easing again to 455,300 (average 344,800). Could get a bit more of a rest here, and we will look for VAR to hold the 10 day, and then we can look at new or additional positions on another strong move up. Target: Moved up with the last move to 46.
PLAY: After holding 39 on a pullback, a move over 40 with volume in the 500,000 range. Stock and/or May $35 calls to buy (VAR EG). Stop: 37.29.
****
WATCHLISTS: Many of these have made such good moves lately we have put them here to look for the next entry point.
PRE-ANNOUNCEMENTS WATCHLIST: AZO (2/26), BRL, DRI, EXPD, MRBK, AROW, and IFIN.
DHI ($36.70; -0.65): Forecast to announce a split with a board meeting on 2-26-02. Pulled back a bit Friday, and volume was sharply higher at 1.51 million (average 923,000). However, it held the 10 day MVA (36.50), and if it can hold the 36 level it will make a higher low, and we will continue to look for DHI to take out its high. That buy point is 38.09 on volume of 1 million or better, with stock and/or May $35 calls to buy (DHI EG).
LSTR ($79.79; -0.21): Researching a new date. Made a heckuva move in January on a breakout from a reverse head and shoulders, but hitting 87.35 came back rather hard. It has found and held support at the 50 day (78.37), showing dojis all week over that level. Volume was low until Friday, when it spiked up to 162,700 (average 58,500), and with that spike we could be in for some action. The bounce play is on a move over the short-term MVA's (81.03) on continued strong volume, with stock.
GTK ($50.45; -0.05): Working on a new date. Has been creeping up on low volume toward the high of 51.48, pulling back slightly Friday to show another doji over the 10 day MVA (49.94). Volume continues to be quite low (172,300; average 398,000). We could get a pullback to the 49-50 range first, but looking for a move over the high on volume of 500,000, with stock and/or June $47.50 calls to buy (GTK FW).
DRS ($39.25; +0.28): Looked to be ready to dive, taking out the 50 day MVA (36.63) Wednesday, but DRS rebounded strong. After the good bounce Thursday, DRS slowed to a loose doji Friday, holding over its short-term MVA's (18 day at 38.23). The handle high is still out there at 43, but the aggressive can look at a move over 40 on above average volume (240,000; today down to 172,600), with stock and/or June $35 calls to buy (DRS FG).
CTAS ($46.31; -1.06): Announces earnings on 3-14-02 before the open, but they typically announce with a board meeting. There was such a meeting in late January, but they also could announce in late February when they announce anticipated earnings. Broke down out of the long lateral consolidation, giving up the 50 day (48.08), and tapping its 200 day (46) at its low. Volume has been strong (1.38 million today; average 858,600), and if it breaks the 200 day, we will look for a test then a 'kiss goodbye' for put positions.
STU ($87.99; +0.49): Researching a date. Holding up and showing a lateral consolidation after its last move up along its trend along the short-term MVA's (10 & 18 day at 87.41 and 86.49, respectively). Holding in this consolidation along that support could set up another strong move that could trigger a run to 100. From here, the aggressive can play a move over 89 on above average (14,000) volume, with stock.
INVN ($39.04; -0.19): Forecast to announce a split on 2-28-02 with a special meeting to increase authorized shares. INVN is holding its 18 day MVA (38.58), forming a handle to its small cup dating back to December (all-time high 47.09). Volume is drying up (572,000 Friday; average 3.12 million), so we will see if it can hold support and make a move. The handle high is 46.20, but we can look at a move over the recent high of 42.64 on above average volume, with stock and/or July $35 calls to buy (FQQ GG).
PRE SPLITS WATCHLIST:
HTLD ($33.40; -0.49): Splits 3:2 effective 2-20-02. Holding the 18 day MVA (33.36), closing there Friday after dipping intraday to 32.54. It is key that HTLD hold here, as it has formed what could be double tops, which can lead to some strong drops. It HTLD can hold support here, however, making a higher low, it could build strength to attack the high. We will see if Friday's upward momentum to close continues. Going into the split, the aggressive can try a move over 34.10, with stock and/or March $30 calls to buy (QHK CF - no open interest). The high is just ahead at 35.35.
BLL ($84.44; +2.35): Splits 2:1 effective February 22. The amazing run continues as BLL gapped down but pushed up yet again Friday, with volume increasing (282,600; average 259,700). Again, just protecting those profits from the inevitable pullback. Looking at possible support for a consolidation at the 10 day MVA (80.92; 18 day at 78.55), although after a run like this we need to be prepared for a possible rapid drop as well.
GILD ($65.74; +0.30): Splits 2:1 effective March 8. Has fallen back again through its 50 day MVA (66.19), showing a doji below that mark Friday. Has been a bit erratic in its pattern, so we will see if it settles into something playable. We have the time. The recent high is 71.15, with the high at 73.67.
WERN ($25.31; -0.39): Splits 4:3 on or about March 15. The 50 day bounce did not last, as WERN pulled back rapidly and Friday closed back below that support (25.71). Last time down the stock also hit below the 50 day, with the recent low at 24.75. If it can hold we will see if it will give us a move back up toward the high (29.57).
CONTINUING CANDIDATES WATCHLIST: When splits are not announced, we will keep the best split prospects on the report rather than continue to carry all of them in case there is a an unexpected announcement. We will continue to monitor the stocks that are trimmed and add them again when we ascertain a revised split announcement date. These include BBY, EDS, ETH, JCI, MI, STJ (4/17 earnings) and THQI.
BBBY ($34.38; -0.71): As anticipated, BBBY pulled back off of Thursday's 'tombstone' doji on high volume (much stronger than on Wednesday's attempted breakout), but the selling was on much lower volume (2.52 million; average 3.17 million), and it is still holding the 10 day MVA (34.12). May need some time to set up for a move to a new high (Thursday set new mark at 36.53), and for now we will see if it can continue to hold here.
FLIR ($44.76; -1.18): Continues to show some volatility in both price and volume, but has made a solid move over the last month. Friday it dipped back down on lower volume, erasing Thursday's move. We will see if it can settle down and set up another move. The 10 day MVA is below at 46.44.
GNSS ($44.76; -0.24): Has been a great play. Steadily trending down, Friday showing a doji after hitting and intraday low of 43.25 (below the recent low of 44). Off of the doji we could get an attempt to bounce, but we will again look for failure (the stock has not been able to reach up and touch its 10 day MVA of late (currently 49.10), and we could still get the drop back to the 200 day MVA (40.50).
HB ($59.96; -0.40): After the big breakout move, tested back below the December high, but managed to hold the 18 day MVA (58.66) and bounce this week. It is pulling back a bit after Thursday's doji, so we will see where it catches support (10 day at 59.38). Catching a higher low would form a pennant pattern on this test, and we would look for a breakout when it sets up.
LLL ($109.72; +2.61): Continued its strength, setting off a target alert Friday when it hit over the target of 110. Still showing strength after the original breakout of its cup, Monday moving out of a pennant it had formed on a breakout test, and Friday powering up yet again with good volume (875,900; average 573,000) after testing its 10 day MVA (105.04). We will continue to ride remaining positions on strength, and could get another bounce from the 10 day. However, we will look at taking some money off the table on a breach of the 10 day. The 18 day is below at 102.27.
PII ($55.37; +0.11): Made a strong move last week, but retreated as it reached toward its high (59.92). It is testing the 50 day MVA (55.18), showing a doji Friday on sharply higher volume (182,700; average 121,500), so we will see if it can give us a bounce. The aggressive can play a move over 56.50 on continued strong volume, with stock and/or June $50 calls to buy (PII FJ).
YUM ($56.01; +0.49): Hit a new high Friday at 56.77, but there was not much volume (down to 710,900; average 743,000) and YUM pulled back to close. We will see if it can hold a higher low this time, holding the 18 day MVA (54.45) this time and then making a stronger run at a new high. We are being cautious as there are some restaurants that have done well that are breaking down.
POST SPLITS WATCHLIST:
CHBS ($29.90; +0.20): Split 3:2 December 13. Hit the put buy point but did not have nearly the volume we were looking for (189,900; average 437,000). It is stymied under the 50 day (30.05), showing six consecutive tight patterns, and we are still looking for a strong fall to a target of the 200 day MVA, at 24.33. On a drop through 29 on increased volume near the average, April $35 puts to buy (URH PG - available Monday).
CHS ($32.24; -0.16): Split 3:2 effective 1-22-02. After the gap up and reversal Friday on sharply higher volume, CHS held support at its 10 day (31.90) with a doji on lower volume (537,500; average 573,000). We will see if it holds, and it could hold the 18 day on a further drop (30.87, with some prior highs), but we are wary of a drop through that level and would close out short-term positions.
MGAM ($27.42; +0.40): Split 3:2 on February 12. Has topped out on its run going into the split, dropping back but holding support at its December highs and short-term MVA's (18 day at 26.21). With the loose doji on low volume, we will see if it can hold. If so, the aggressive can play a move over 29 on volume of 300,000 or better, with stock and/or July $25 calls to buy (QMG GG).
SONC ($25.65; +0.15): Split 3:2 effective 2-11-02. Gapped up and reversed Friday, and still looks like it needs to come back for a visit to the 18 day (24.86).
XRAY ($33.22; -0.18): Split 3:2 effective February 1. Predictably pulled back after the loose 'star' doji Thursday, showing another such pattern over short-term MVA's (33.15, 50 day at 32.56). The aggressive can play a move over 34 on above average volume (283,000), with stock and/or July $33.38 calls to buy (REH GX).
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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stock split
stock research
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