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us stock market, trade stock
Begin part 3 of 3
THE PLAYS: Splitting the difference between some solid upside and some solid downside as the market is all over the place.
Upside:
New Pre-Announcement Play:
Play Date: 11/13/2007
IDXX (Idexx Labs--$125.87; +0.93; optionable): Diagnostic substances. Splits 2:1 on 11-27-07
http://biz.yahoo.com/p/i/idxx.html
EARNINGS: Announced 10-26-07
STATUS: Test 10 day EMA. IDXX made us a bit of scratch on its last bounce, and over the past three sessions it has tested, coming back to tap at the 10 day EMA (123.84) on the Monday and Tuesday lows and bouncing back. Very nice action in a weak market when it was selling, and looking to move into IDXX as it continues the rebound. Good stock in the even the market weakens again.
Volume: 120.05K Avg Volume: 181.668K
BUY POINT: $126.33 Volume=273K Target=$136.45 Stop=$123.77
POSITION: UID AE - Jan. $125c (57 delta)
http://www.investmenthouse.com/cs/idxx.html
New Post-Split Play:
Play Date: 11/13/2007
GILD (Gilead Sciences--$43.11; +0.55; optionable): Biotechnology
http://biz.yahoo.com/p/g/gild.html
EARNINGS: Announced 10-18-07
STATUS: Test 50 day EMA. GILD reversed on us from a nice trend up the 10 day EMA (44.43), falling the past week to the 50 day EMA (42.56) on the Monday close, then bouncing off that level Tuesday after a test down a bit lower. This test completes a full pullback from the mid-October break higher from its 6 month base, and we like how it held at that level and looks ready to bounce up off of this key support level. Want to see continued solid volume as the bounce picks up some steam.
Volume: 8.293M Avg Volume: 7.295M
BUY POINT: $43.62 Volume=10M Target=$49.00 Stop=$41.88
POSITION: GDQ BV - Feb. $42.50c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/gild.html
Downside:
Play Date: 11/13/2007
C (Citigroup--$35.90; +2.33; optionable): Big bank
http://biz.yahoo.com/p/c/c.html
EARNINGS: Announced 10-15-07
STATUS: Put. Pretty ugly downtrend since October when it really broke down and started an entrenched downtrend below the 10 day EMA (35.97). It has rebounded the past three and one-half sessions after a really sharp decline to start November, bouncing back on continued above average volume though it has declined each session. It rallied up to the 10 day EMA (35.97) on Tuesday and we are watching for a stall here as this is the moving average that stopped it the last time it tried to bounce in late October. Looking to catch it as it rolls back over. A move to the initial target lands a 50%ish gain.
Volume: 105.711M Avg Volume: 57.934M
BUY POINT: $35.69 Volume=100M Target=$32.54 Stop=$36.05
POSITION: C XU - Dec. $37.50p (-54 delta)
http://www.investmenthouse.com/cs/c.html
Play Date: 11/13/2007
SBUX (Starbucks--$23.99; +0.85; optionable): High priced coffees
http://biz.yahoo.com/p/s/sbux.html
EARNINGS: 11-15-07 after the close
STATUS: Put. People may be addicted to coffee, but as the consumer softens some we may see just how addicted they are to a $5 cup of joe. Moreover, McDonalds is cutting in with some gourmet coffee of its own to go along with a hunk of fat to get your morning going. SBUX made us a lot of downside money in late 2006 and the first half of 2007 as it trended lower and now after this 4 month lateral move it collapsed to start this month. It is now rebounding ahead of its earnings, moving higher this week. We are looking for it to hit the 10 day EMA (24.28) Wednesday and stall there. We don't anticipate it will benefit from its earnings, so we are looking to move in after the test of the 10 day even with earnings on Thursday after the close.
Volume: 15.798M Avg Volume: 10.493M
BUY POINT: $24.11 Volume=15M Target=$22.55 Stop=$24.48
POSITION: SQX XE - Dec. $25c (-50 delta)
http://www.investmenthouse.com/cs/sbux.html
Play Date: 11/13/2007
SPY (S&P Depository Receipts--$148.08; +4.38; optionable)
http://biz.yahoo.com/p/s/spy.html
STATUS: Put. As SP500 has rallied back to the 200 day SMA (the SPY 200 day is 148.45) on lower trade we want to be ready in case it fails there. This market rebound can last for a few more days, but we suspect some are going to start selling into the strength in the financials, and when that happens, SPY is going to lose its rebound strength and roll over. If it continues higher, no problem; we will just let it continue higher on up to 150 or so and then move in when it rolls back over.
Volume: 191.117M Avg Volume: 193.196M
BUY POINT: $147.95 Volume=200M Target=$144.00 Stop=$148.54
POSITION: SFB XR - Dec. $148p (-45 delta)
http://www.investmenthouse.com/cs/spy.html
Play Date: 11/13/2007
TIF (Tiffany--$48.78; +3.42; optionable): High end jewelry
http://biz.yahoo.com/p/t/tif.html
EARNINGS: Late November
STATUS: Put. TIF should do fine in the holiday season, but as with any stock it is not the immediate future but what is beyond several months down the road that matters. Thus it has struggled of late with the retailers are holding out rather nicely through mid-October. Then it rolled over and tanked to 44. It is bouncing, and similar to SP500, it is now a the 200 day SMA (48.92) on lower though still above average volume. Want to be ready in the event the sellers come back in and send it lower from this key level. It is key because the 200 day SMA is where big money either supports its stock or it sells it. The fact that TIF broke down below its 200 day on strong volume shows they were selling. Now we will see if they sell it again as it tests that level.
Volume: 3.279M Avg Volume: 2.516M
BUY POINT: $48.48 Volume=3.8M Target=$45.50 Stop=$49.12
POSITION: TIF XJ - Dec. $50p (-64 delta)
http://www.investmenthouse.com/cs/tif.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: Gapped higher and ran, putting in a big gain on the session up to some resistance at 170. Tough to get in right here. Want to see it set up a bit more before a potential January split announcement.
ATK: Giving us the test of the breakout.
ATW: Likely to announce in January. A whiplash week thus far, but holding the 50 day EMA after Tuesday.
BUCY: Another whiplash stock.
CNQ: Under pressure and needs to put in a bottom here.
EDU: Heck of a rebound off the 50 day SMA and you can take some positions as it continues this move.
EOG: Anticipating an announcement in late January
ISRG: Looking to pinpoint a date. Looking for a bounce off the 50 day EMA here on some volume to give us a buy point.
JEC: Trying to hold the 50 day EMA
MICC: Tentatively forecast for mid-December
PCP: Researching date.
RIG: Managed to hold a test off the 50 day EMA so we will see if it can show us something solid to the upside for a new buy.
SID: Tentatively set for mid-November
STLD: Researching date.
SU: Researching date. Will see if it can set up a bounce from the 50 day EMA.
XTO: Researching date. Still trying to make something off the 50 day EMA
NEW PRE-ANNOUNCEMENT PLAYS
Play Date: 11/13/2007
COST (Costco--$67.41; +1.68; optionable): Discount warehouse stores
http://biz.yahoo.com/p/c/cost.html
EARNINGS: 12-13-07
STATUS: Flying plateau. COST broke higher in early October, gapping to the upside on very strong volume as it broke out from a 9 week double bottom base. This last move broke COST out from a long 7 year base where it struggled to move higher. Money flow is still moving higher ahead of price and on Tuesday COST was up on stronger, above average volume. One of the best looking retailers out there, and with the issues relating to the economy ahead, it is showing very nice technical strength. Looking for a continued move higher on volume to move into some positions.
Volume: 5.844M Avg Volume: 4.826M
BUY POINT: $68.11 Volume=7.2M Target=$77.95 Stop=$64.77
POSITION: PRQ DU - Apr. $67.50c (58 delta) &/or Stock
http://www.investmenthouse.com/cs/cost.html
Play Date: 11/13/2007
HRS (Harris Corp.--$61.22; +1.29; optionable): Telecom equipment
http://biz.yahoo.com/p/h/hrs.html
EARNINGS: Announced 11-1-07
STATUS: Test 50 day EMA. Nice surge on earnings took HRS out of an 8 week ascending base that used the 50 and 90 day SMA as support on the lows. Strong volume on the break higher as it ran to 66 on the breakout move. In the market selling it faded back and gave up the breakout, but it held at the 50 day EMA (60.10) on the low and then broke higher Tuesday. Looking to move into HRS as it continues its move higher. Unlike many stocks it did not collapse in the selling, but held a key level and can move nicely off of that point.
Volume: 914.82K Avg Volume: 783.344K
BUY POINT: $62.21 Volume=1.2M Target=$69.95 Stop=$59.95
POSITION: HRS BL - Feb. $60c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/hrs.html
CONTINUING PRE-ANNOUNCEMENT PLAYS
Play Date: 11/08/2007
EOG (EOG Resources--$85.66; +1.37; optionable): Independent oil and gas
http://biz.yahoo.com/p/e/eog.html
EARNINGS: Announced 10-29-07
STATUS: Test breakout. Two reaches lower intraday this week to test the breakout and fill the gap, and ready to move back up. Not bad action in all of the market selling. To recap: EOG gapped higher on its earnings, clearing an 18 week cup with handle base. It rallied to 90 on the breakout and then moved laterally the past week, consolidating the breakout but refusing to give up any gains. Solid price/volume action as it moves laterally shows the accumulation continues as it consolidates. Strong money flow is leading higher and looking to move in as EOG continues the breakout move after this test during the market selling, a test where it lost no ground.
Volume: 3.061M Avg Volume: 2.641M
BUY POINT: $88.89 Volume=3.2M Target=$101.95 Stop=$85.89
POSITION: EOQ DQ - Apr. $85c (68 delta) &/or Stock
http://www.investmenthouse.com/cs/eog.html
Play Date: 11/10/2007
MA (MasterCard--$188.81; +6.93; optionable): Credit services
http://biz.yahoo.com/p/m/ma.html
EARNINGS: Announced 10-31-07
STATUS: Breakout test. Sold off on Monday with the market, but it was continued and it easily held above near support. Bounced Tuesday with the market. Still looks solid for the next move higher. To recap: When most of the credit service companies are struggling, MA is taking bags of money to the bank. We were looking to move in to end October and missed our opportunity; it announced strong earnings and gapped sharply higher, clearing an excellent 18 week cup with handle base. Big surge that took it to a psychological level at 200 on the move. It stalled there Wednesday, and in the Thursday and Friday selling it came back to test the 10 day EMA on the session lows each session. Friday it rebounded to post a modest gain. May do some more lateral testing here before it is ready to make the break, but this stock has been so strong we want to be ready to move in as it resumes its breakout run.
Volume: 3.003M Avg Volume: 3.695M
BUY POINT: $191.68 Volume=5M Target=$219.95 Stop=$186.22
POSITION: MAL AS - Jan. $195c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/ma.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 11/07/2007
PPDI (Pharmaceutical Product Dev.--$41.20; +0.31; optionable): Contract research for drug development and discovery
http://biz.yahoo.com/p/p/ppdi.html
EARNINGS: Announced 10-23-07
STATUS: Test breakout. Looks as if it wants to make the move, bouncing higher Tuesday though no volume to go with it. Just going to be patient; will likely start to perform again when this relief bounce runs out of gas. To recap: PPDI formed a nice handle in October and its earnings propelled it to the breakout from a large 15 month cup with handle base. Nice strong volume on a big surge higher. It has come back to test this week, using the market selling to test back to the 18 day EMA on the Wednesday close. Volume was low on the test so we know there was not much selling. This stock tends to move on low volume, so when we see a high volume breakout it means there is something solid behind it. Looking for it to hold and then rebound on some better (not a whole lot, however) volume to move in.
Volume: 537.777K Avg Volume: 731.602K
BUY POINT: $41.42 Volume=950K Target=$47.75 Stop=$40.41
POSITION: PJQ DH - Apr. $40c (56 delta, low OI) &/or Stock
http://www.investmenthouse.com/cs/ppdi.html
Play Date: 11/05/2007
SCSC (Scansource--$34.81; +1.14; optionable): Specialty technology products
http://biz.yahoo.com/p/s/scsc.html
EARNINGS: Announced 10-25-07
STATUS: Breakout test. Still very nice action as SCSC held the 18 day EMA (33.84) on the test and started to bounce Tuesday. Need to see some more trade but an excellent set up for the next run higher. To recap: Strong break higher on the earnings results, gapping out of a 17 week double bottom with handle base. It has come back to test the move, tapping at the 18 day EMA on the Monday low. Has not filled the gap but was moving up after it opened lower, and it may be some time before it does fill it. In other words, if it is moving higher on volume from here we won't wait for the fill as SCSC moves toward a bigger breakout from a 3 year base to a new all-time high.
Volume: 189.433K Avg Volume: 232.395K
BUY POINT: $34.89 Volume=375K Target=$41.95 Stop=$33.35
POSITION: UHI CG - Mar. $35c (55 delt, 66 OI) &/or Stock
http://www.investmenthouse.com/cs/scsc.html
CONTINUING DOWNSIDE PLAY:
Play Date: 11/12/2007
GYMB (Gymboree--$35.56; +0.83; optionable): Kids clothing stores
http://biz.yahoo.com/p/g/gymb.html
EARNINGS: 11-20-07
STATUS: Put. Tested a bit higher, trying to get through the 50 day EMA (35.52) and closing right at that level on very low, below average volume. Looks as if this rebound has stalled and as it rolls back down on some good trade we will look to move in. To recap: GYMB sold down the 10 and 18 day EMA, failing at that point each time it tested it. Then it collapsed lower to start the month. After that plunge it rebounded the past week, rallying up to the 50 day EMA (35.52) on Friday and again Monday, but both days failing to hold a move above that level. Monday it showed a tombstone doji below the 50 day EMA; the name says it all with respect to what that symbol means. GYMB has had its bounce to come up for air after the trend lower below the 18 day EMA, and just as with a stock that is trending higher above the 18 day EMA and needs a test down to the 50 day EMA to reset the move, GYMB's test to the 50 day EMA is resetting the downside move. Want to see volume move up as it turns back down. A move to the target lands a 43%ish gain.
Volume: 778.139K Avg Volume: 939.6K
BUY POINT: $34.91 Volume=1.1M Target=$31.35 Stop=$36.05
POSITION: GQU XG - Dec. $35p (-46 delta)
http://www.investmenthouse.com/cs/gymb.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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