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us stock market, trade stock
Begin part 3 of 3
THE PLAYS:
Upside:
New Post-Split Plays:
Play Date: 11/29/2007
NOV (National Oilwell--$69.54; +3.18; optionable): Oil and gas service company
http://biz.yahoo.com/p/n/nov.html
EARNINGS: Announced 10-24-07
STATUS: Test 90 day SMA. Huge runner in 2007 and finally needed a break after splitting in early October. It has come back to the 90 day SMA (66.92) over the past 6 weeks, using the market selling to take a breather and come back to key support. Has formed something of a double bottom at this level. Thursday it was up on rising, average volume when oil was up but faded. NOV did not fade. Looking for more trade as it breaks higher; when it is ready to run it does run fast.
Volume: 5.628M Avg Volume: 5.68M
BUY POINT: $70.56 Volume=8M Target=$80.95 Stop=$66.76
POSITION: NOV BN - Feb. $70c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/nov.html
Play Date: 11/29/2007
TXT (Textron--$67.29; -0.99; optionable): Helicopters, business jets, etc. (Bell, Cessna, etc.)
http://biz.yahoo.com/p/t/txt.html
EARNINGS: 1-24-08
STATUS: Test 50 day EMA. Nice breakout in mid-October from a 12 week cup with handle base, rallying to 70 on the move. During the market selling it tested the move, coming back to the 50 day EMA (64.80) to test. That also marks the left side of the base, the July peak. Volume rose to average Wednesday as it broke higher off the 50 day, making the next step toward a new high. Tested back Thursday on lower volume, holding near support at the 18 day EMA on the low then bouncing. Looking for more volume as it continues higher.
Volume: 2.001M Avg Volume: 1.859M
BUY POINT: $68.32 Volume=2.5M Target=$76.95 Stop=$66.21
POSITION: TXT CX - Mar. $67.50c (51 delta, 329 OI) &/or Stock
http://www.investmenthouse.com/cs/txt.html
New Leader Plays:
Play Date: 11/29/2007
BG (Bunge Ltd.--$113.45; -2.85; optionable): Farm products (beans)
http://biz.yahoo.com/p/b/bg.html
EARNINGS: Announced 10-25-07
STATUS: Cup. A great leader in the prior rally, BG has put in some time and is ready to move higher. It jumped higher on its earnings in late October, but then faded in the market selling to start November. It held the 50 day EMA (105.84) to star the month and has moved laterally in a tight range along the 50 day for three weeks. Then Wednesday, voila; it jumped higher on the strongest trade in three weeks, clearing the highs of the lateral move. Thursday it tested, tapping at the 10 day EMA (110.31) on the low and rebounding to recoup a chunk of losses. Looking for a continued move higher after this day of rest. Want to see strong trade as it resumes, but it is likely to rally right back quickly and thus we will at least take a partial position as it makes that move.
Volume: 1.565M Avg Volume: 1.238M
BUY POINT: $115.05 Volume=1.6M Target=$129.95 Stop=$113.22
POSITION: BG AC - Jan. $115c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/bg.html
Play Date: 11/29/2007
EDU (New Oriental Education & Tech--$75.75; +4.28; optionable): Chinese education and training services
http://biz.yahoo.com/p/e/edu.html
EARNINGS: Announced 10-15-07
STATUS: Test 90 day SMA. Nice breakout from a 12 week base in late September and surged to 90. It was a target in the November selling given its run, and it came back to test, holding mostly at the 50 day EMA (70.97) with a quick dip down to the 90 day SMA (63.59) last week intraday, then rebounding back over the 50 day. Kind of a neat little double bottom has formed and volume surged Thursday as EDU broke higher, clearing the mid-October peak. Money flow is surging. Looks ready to rumble again and make us some more money.
Volume: 927.804K Avg Volume: 524.145K
BUY POINT: $76.45 Volume=650K Target=$91.95 Stop=$72.92
POSITION: EDU AO - Jan. $75c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/edu.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: Great break higher this week. Looking for an announcement in January.
ATK: Looking for a February announcement.
ATW: Likely to announce in January. Explosive move higher after undercutting the 90 day SMA Wednesday.
BUCY: Solid week, consolidating the move. Still a buy on a new break higher.
COST: Forecast mid-December
EOG: Anticipating an announcement in late January
HRS: Looking to January for an announcement.
ISRG: Looking to pinpoint a date. Nice break higher.
MA: Forecast late January
MICC: Tentatively forecast for mid-December
MON: Got the bounce and it was a strong one.
OTEX: Forecast early 2008. Trying to pinpoint the date.
RIG: Taking a rest after that great surge.
SID: Setting up a double bottom above the 90 day SMA.
STLD: Researching date. Getting some strong volume as it moves off the double bottom.
NEW PRE-ANNOUNCMENT PLAYS
New buy point:
Play Date: 11/29/2007
HRS (Harris Corp.--$63.03; +0.04; optionable): Communications, info tech company for government and commercial markets
http://biz.yahoo.com/p/h/hrs.html
EARNINGS: Announced 11-1-07
STATUS: Double bottom. HRS has set up a short double bottom this month using the 50 day EMA (60.62) as support for the two legs. HRS broke out from an 18 week base in June and rallied in a choppy run, using the 50 day EMA as support. Big surge after earnings to start November, and it needed a rest to reset for the next move. It used the market selling to do that, then bounced off the 50 day starting Tuesday. May form a bit of a handle as the market rests after the big break higher, but like the set up and looking to move in as it resumes its break higher. Would like to see some better trade but no complaints with the trade of the past three sessions.
Volume: 782.267K Avg Volume: 788.015K
BUY POINT: $63.55 Volume=1.2M Target=$70.95 Stop=$61.48
POSITION: HRS BL - Feb. $60c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/hrs.html
CONTINUING PRE-ANNOUNCEMENT PLAYS
Play Date: 11/28/2007
OTEX (Open Text--$32.12; -0.28; optionable): Internet enterprise content management solutions
http://biz.yahoo.com/p/o/otex.html
EARNINGS: Announced 11-1-07
STATUS: Test 50 day EMA. Nice tight doji on lower volume Thursday as OTEX continues its excellent breakout test. Just being patient and letting it set up for the next break higher. To recap: Gapped higher in late August, clearing a 16 week base. It has stair-stepped higher since, making two runs off the 18 day EMA (32.30) and coming back to test. With the market selling this month it came back a bit further, testing the 50 day EMA (30.19) on the Tuesday low and rebounding. Wednesday volume jumped back above average (it was below average on the entire test) as OTEX jumped up off the 50 day test. Strong money flow is running higher ahead of the stock even as it tests. Nice set up for a strong break higher.
Volume: 351.822K Avg Volume: 563.96K
BUY POINT: $32.85 Volume=700K Target=$39.45 Stop=$31.11
POSITION: QFT BF - Feb. $30c (69 delta) &/or Stock
http://www.investmenthouse.com/cs/otex.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 11/28/2007
CHL (China Mobile--$90.40; -0.41; optionable): Chinese wireless
http://biz.yahoo.com/p/c/chl.html
EARNINGS: Third week of December
STATUS: Test 50 day EMA. Took the day off on Thursday on very low volume, taking a breather after a strong price and volume move Wednesday. Nice little double bottom has set up, and it may take another day to form a handle. Very nice and looking for the break higher. To recap: CHL enjoyed a tremendous August to late October run, and when the market started to sell it had to test back. It gapped lower to start the month, but it held at the 50 day EMA (84.70) and worked laterally the past three weeks, forming something of a double bottom. Nice break higher Wednesday on strong, above average volume. Looking to move in as CHL continues higher and gives us the run toward the prior high. That move alone gives us a nice gain, just what you want in a bounce situation, i.e. not having to plough new ground if you can avoid it.
Volume: 2.38M Avg Volume: 3.411M
BUY POINT: $91.12 Volume=4.5M Target=$103.95 Stop=$87.55
POSITION: CHL CR - Mar. $90c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/chl.html
Play Date: 11/15/2007
D (Dominion Resources--$46.92; -0.07; optionable): Electric utilities
http://biz.yahoo.com/p/d/d.html
EARNINGS: Announced 11-1-07
STATUS: Ascending base. Trying to make the breakaway move but just can't quite make it this week. Still solid, still waiting for more of a breakaway move on some solid trade. To recap: Nice lateral move the past two weeks as D bangs up and down between 45 and 46. It is consolidating the late October spurt higher, resting right below the April and May high that mark the top of the base. Gapped lower to the 18 day EMA on the Thursday open then rebounded on rising volume to post a modest gain. Nice set up to move higher, and this stock is in the right sector for a market turning more defensive. Looking for a bounce and run into the split.
Volume: 2.582M Avg Volume: 3.329M
BUY POINT: New: from here on a strong break (orig. $46.48) Volume=2M Target=$52.95 Stop=$45.11
POSITION: D DI - Apr. $45c (70 delta, low OI) &/or Stock
http://www.investmenthouse.com/cs/d.html
Play Date: 11/17/2007
DRQ (Dril-Quip--$56.04; +0.29; optionable): Oil and gas service company
http://biz.yahoo.com/p/d/drq.html
EARNINGS: Announced 11-1-07
STATUS: Breakout test. Still in that very nice test, showing a tight doji Thursday on below average volume. Ready to make the break, just needs to show it. To recap: Showing outstanding strength in the energy market. DRQ exploded higher to start November, propelled by some strong earnings. The move blasted it out of a 6 month base. It made a nice 10 point surge on the breakout run, and then spent the past two weeks testing that move during the market selling. It held near support at the 18 day EMA (56.70) the past week, holding the 18 day with a doji. Excellent action and looking for DRQ to hold this near support this week and then resume the breakout move once more. We are looking to buy into that move.
Volume: 504K Avg Volume: 556.863K
BUY POINT: $58.91 Volume=795K Target=$67.95 Stop=$56.94
POSITION: DRQ CK - Mar. $55c (63 delta, 163 OI) &/or Stock
http://www.investmenthouse.com/cs/drq.html
Play Date: 11/27/2007
POT (Potash--$115.89; -1.29; optionable): Fertilizer and related feed products
http://biz.yahoo.com/p/p/pot.html
EARNINGS: Announced 10-25-07
STATUS: Test 50 day EMA. After a nice gap higher Wednesday, POT took some time off Thursday on lower, below average volume. May come back a bit more to test toward the 18 day EMA (112.68), and if it does, a bounce from there is a new entry point. To recap: As with many other leaders, POT is testing this key support level, working laterally the past week on low, below average volume. Money flow is rising even as the stock price moves laterally. Nice set up for a market bounce, particularly with the rising money flow. Looking for a bit more volume as it makes the break higher.
Volume: 2.891M Avg Volume: 3.46M
BUY POINT: New: Test 112.50ish then a bounce (orig. $113.91) Volume=4M Target=$129.95 Stop=$111.77
POSITION: PYP AB - Jan. $110c (57 delta)
http://www.investmenthouse.com/cs/pot.html
Play Date: 11/27/2007
SWN (Southwestern Energy--$50.83; +0.12; optionable): Independent oil and gas
http://biz.yahoo.com/p/s/swn.html
EARNINGS: Announced 10-31-07
STATUS: Test 50 day EMA. Bounced off the 50 day EMA (48.39) Wednesday, but no volume. Up again Thursday but again low below average trade. Just looking for some more volume as it makes the break higher. To recap: SWN broke higher to start November, gapping out of a 20 week cup with handle base. It rallied to 56 on the high and in the market selling it filled the gap and tested lower to the 50 day EMA. It held there the past week, working laterally, setting up the next move higher to continue the breakout. Unlike many energy stocks, it has held up well and is ready to make the break higher despite lower oil prices (though at $94/bbl it is hard to call them low).
Volume: 1.834M Avg Volume: 2.189M
BUY POINT: Looking for more volume from here (orig. $50.58) Volume=3.3M Target=$58.45 Stop=$48.97
POSITION: SWN CJ - Mar. $50c (59 delta) &/or Stock
http://www.investmenthouse.com/cs/swn.html
Play Date: 11/28/2007
VIVO (Meridian Biosciences--$30.80; 0.00; optionable): Diagnostic substances
http://biz.yahoo.com/p/v/vivo.html
EARNINGS: Announced 11-14-07
STATUS: Test 50 day EMA. Strong volume Wednesday, took a breather on low volume Thursday with the market. Looking for more trade as it resumes the move. That is when we know the buyers are serious and we can step in as well. To recap: Taking another look at VIVO as it comes off the 50 day EMA (29.97) on stronger, above average volume, the first above average trade in over a week. Double top in October and November, but it has made a higher low at key support here at the 50 day. Not bad. Looking for some more volume as ti continues higher and gives us the entry point.
Volume: 321.664K Avg Volume: 371.12K
BUY POINT: $31.11 Volume=450K Target=$37.45 Stop=$29.87
POSITION: ZUG AF - Jan. $30c (62 delta, 437 OI) or ZUG DG - Jan. $35c (57 delta, 363 OI) &/or Stock
http://www.investmenthouse.com/cs/vivo.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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