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us stock market, trade stock
Begin part 3 of 3
THE PLAYS: Looking at some upside and downside to prepare for the next phase after the strong surge.
Upside:
New Pre-Split Plays:
Play Date: 12/01/2007
FLIR (Flir Systems--$68.73; -0.82; optionable): Scientific and technical instruments. Splits 2:1 on 12-11-07
http://biz.yahoo.com/p/f/flir.html
EARNINGS: Announced 10-25-07
STATUS: Cup w/handle. After gapping higher in late October on earnings FLIR was taken lower in the selling to start November, but as with many strong stocks, it held the 50 day EMA (62.44) and bounced, forming the right side of its 5 week base. Strong volume Wednesday, lower, below average trade Thursday and Friday as it moved laterally, forming the handle. Very solid pattern and will let it finish forming the handle and then catch it as it breaks higher from this base.
Volume: 641.802K Avg Volume: 672.312K
BUY POINT: $69.68 Volume=1M Target=$80.35 Stop=$66.88
POSITION: FFQ DN - Apr. $70c (55 delta, 173 OI) or FFQ AM - Jan. $65c (68 delta) &/or Stock
http://www.investmenthouse.com/cs/flir.html
New Post-Split Plays:
Play Date: 12/01/2007
ANSS (Ansys--$38.86; +0.04; optionable): Technical software
http://biz.yahoo.com/p/a/anss.html
EARNINGS: Announced 11-1-07
STATUS: Double bottom w/handle. Strong breakout in early August from a 15 month base followed by a nice run up the 18 day EMA (now at 38.31), taking ANSS to a new all-time high. After that run it needed a rest and it came back to that important 50 day EMA (37.34) to test during the market selling, making two legs at that key level. Very typical test after a run up the 18 day EMA, and like how ANSS used the market selling to make the test, consolidate, and set up the next move higher. Now we just let it finish out the pattern and show us the break higher on rising trade. That is our entry point.
Volume: 599.375K Avg Volume: 742.658K
BUY POINT: $39.76 Volume=1.1M Target=$45.95 Stop=$37.84
POSITION: QUS DH - Apr. $40c (48 delta, 137 OI) or QUS AG - Jan. $35c (78 delta) &/or Stock
http://www.investmenthouse.com/cs/anss.html
New Leader Play:
Play Date: 12/01/2007
BLK (Blackrock--$198.37; +0.74; optionable): Investment brokerage
http://biz.yahoo.com/p/b/blk.html
EARNINGS: Announced 10-17-07
STATUS: Double bottom w/handle. BLKD is one of the financials that has shown no fear in the market, selling or otherwise. Strong breakout in September from a base on base pattern and a nice run up the 10 day EMA (now at 194) to late October. It needed a consolidation after that, and it formed the current 4 week base, coming back to the 50 day EMA (187) to form the right leg of the pattern. Strong volume Wednesday on the Kohn comments; what financial stock didn't enjoy that news? Nice lateral move on very low volume Thursday and Friday is forming the handle, setting up the official breakout. May take a couple more days to finish the lateral move, but when it starts to break higher on strong volume once more that is our buy point.
Volume: 293.475K Avg Volume: 387.791K
BUY POINT: $200.78 Volume=600K Target=$225.95 Stop=$196.44
POSITION: BLK AS - Jan. $195c (59 delta)
http://www.investmenthouse.com/cs/blk.html
New Downside Plays:
Play Date: 12/01/2007
NVDA (Nvidia--$31.54; -1.58; optionable): Graphics cards
http://biz.yahoo.com/p/n/nvda.html
EARNINGS: Announced 11-8-07
STATUS: Put. Really struggling after breaking its uptrend in late October. It tried to hold, rebounding in early November, but stumbled again. It made one more attempt to get back up through the 50 and 90 day MA, but after showing a doji at that level Thursday, it rolled over Friday on much stronger, above average volume. Looks like the end of this move for NVDA, and a drop to the 200 day SMA down at 28 (also the August low) looks to be in the cards. A move to that level lands a 44%ish gain.
Volume: 16.316M Avg Volume: 12.951M
BUY POINT: $31.32 Volume=14M Target=$28.76 Stop=$31.78
POSITION: UVA MZ - Jan. $32.50p (-50 delta)
http://www.investmenthouse.com/cs/nvda.html
Play Date: 12/01/2007
VLO (Valero Energy--$65.10; +1.37; optionable): Oil and gas refining.
http://biz.yahoo.com/p/v/vlo.html
EARNINGS: Announced 11-6-07
STATUS: Put. VLO has formed a large umbrella top the past 4 months as it tried to recover after breaking lower in July and tumbling to the 200 day SMA (now at 68.80). It fell through that key support mid-month, falling to match the August lows and then bouncing Wednesday through Friday back up to near resistance at the 10 day EMA (65.09). Now you could say this was some sort of double bottom trying to form and it may end up doing that eventually, but VLO has been under distribution and we are looking for it to set up a more sustained downtrend now that it has broken its 200 day SMA, an indication that it no longer has the big institutional support it had on its big run from January through July. Looking for a break back to the downside to move in. A run to the target lands a 42%ish gain.
Volume: 9.312M Avg Volume: 8.084M
BUY POINT: $64.66 Volume=9M Target=$61.65 Stop=$65.57
POSITION: VLO MM - Jan. $65c (-44 delta)
http://www.investmenthouse.com/cs/vlo.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. Ready to move higher this week after the test to end it.
ATW: Likely to announce in January. Explosive move off the 90 day SMA Thursday and Friday.
BUCY: Steady move higher all week.
COST: Forecast mid-December
EOG: Anticipating an announcement in late January. Nice 50 day EMA test.
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. Excellent week and now looks to test some and then resume the move. That would provide a new entry point on the test.
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: 12/01/2007
STLD (Steel Dynamics--$50.31; -1.18; optionable): Steel and iron
http://biz.yahoo.com/p/s/stld.html
EARNINGS: Announced 10-16-07
STATUS: Double bottom w/handle. Most stocks showed their strong volume Wednesday, but what we like about STLD is that its traded showed up Thursday as it continued its move higher off the 50 day EMA (48.60), forming the second leg in its 5 week base. This base is setting STLD for the move to a new all-time high and is part of a base on base pattern, a short consolidation after a larger 6 month pattern. Pulled back Friday to test and will likely form something more of the handle here. When it breaks higher on strong trade that is when we move in.
Volume: 2.684M Avg Volume: 1.932M
BUY POINT: $51.57 Volume=2.9M Target=$61.95 Stop=$49.55
POSITION: RQL BJ - Feb. $50c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/stld.html
Play Date: 12/01/2007
STT (State Street--$79.89; +1.32; optionable): Northeast regional bank
http://biz.yahoo.com/p/s/stt.html
EARNINGS: Announce 10-16-07
STATUS: Flat base. STT broke higher mid-October on its strong earnings, clearing a 12 week reverse head and shoulders base. Rallied to the end of the month up to 80, then the selling hit. STT did some selling, but it did not sell off. Instead it used the market weakness to consolidate again, working laterally over the 50 day EMA (74) in a range from 72 to 79. Quite volatile but very steady. Friday it broke higher, gapping up on stronger volume. It did not quite clear the late October high, but it looks ready to continue and show the breakout. Very solid action, particularly when juxtaposed against the market's action during the same period. Looking for a continued move higher on continued strong trade.
Volume: 5.071M Avg Volume: 4.806M
BUY POINT: $80.42 Volume=7M Target=$90.50 Stop=$78.21
POSITION: STT BP - Feb. $80c (48 delta) &/or Stock
http://www.investmenthouse.com/cs/stt.html
CONTINUING PRE-ANNOUNCEMENT PLAYS
Play Date: 11/29/2007
HRS (Harris Corp.--$62.77; -0.26; 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. Very nice lateral action Thursday and Friday to end the week, forming the handle to the short pattern. Volume surged Friday as it tapped the 10 day EMA on the low and rebounded to close flat. That trade is telling us to get ready for the break higher. Nice. To recap: 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: 1.731M 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
Play Date: 11/28/2007
OTEX (Open Text--$32.88; +0.76; optionable): Internet enterprise content management solutions
http://biz.yahoo.com/p/o/otex.html
EARNINGS: Announced 11-1-07
STATUS: Test 50 day EMA. Gapped higher Friday on strong volume, running to 34.36 on the high. That was early on, however, and OTEX faded to test the 10 day EMA on the session low. It bounced, but it was fading toward the end of the session so we decided to wait for Monday, see if it can hold, and if it does we will look to move in. Nice. 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 (32.32) and coming back to test. With the market selling this month it came back a bit further, testing the 50 day EMA (30.11) 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: 1.15M 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--$91.66; +1.26; optionable): Chinese wireless
http://biz.yahoo.com/p/c/chl.html
EARNINGS: Third week of December
STATUS: Test 50 day EMA. Gapped higher Friday but then gave back a good bit of the move as volume remained well below average for a second consecutive session. Decided to hold off on the buy given the overall market pullback, but if CHL holds here and starts back up this week we are buyers. 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: 2.668M Avg Volume: 3.411M
BUY POINT: New: Ready to move in as it continues higher (orig. $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: 11/17/2007
DRQ (Dril-Quip--$56.42; +0.38; optionable): Oil and gas service company
http://biz.yahoo.com/p/d/drq.html
EARNINGS: Announced 11-1-07
STATUS: Breakout test. Volume jumped well above average Friday as DRQ tapped support at 55ish and rebounded for a modest gain. Still the nice test and still in great position to move higher. 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: 786.6K 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: 11/29/2007
NOV (National Oilwell--$68.15; -1.39; optionable): Oil and gas service company
http://biz.yahoo.com/p/n/nov.html
EARNINGS: Announced 10-24-07
STATUS: Test 90 day SMA. After moving up Thursday, NOV took the day off Friday, gapping higher but closing down on falling, below average volume. Held support at the 90 day SMA on the low. Still looking for the break higher, but it needs to show us some trade as it makes the move. To recap: 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: 4.236M 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: 11/28/2007
VIVO (Meridian Biosciences--$30.85; +0.05; optionable): Diagnostic substances
http://biz.yahoo.com/p/v/vivo.html
EARNINGS: Announced 11-14-07
STATUS: Test 50 day EMA. Volume was up Wednesday as VIVO moved higher and it was up again Friday as VIVO holed steady at the 50 day SMA, looking to make the break higher. Those big volume spikes are 'get ready' spikes telling us to be ready for the break higher. 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 it continues higher and gives us the entry point.
Volume: 443.391K 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
New Leader Plays:
Play Date: 11/29/2007
BG (Bunge Ltd.--$112.34; -1.11; optionable): Farm products (beans)
http://biz.yahoo.com/p/b/bg.html
EARNINGS: Announced 10-25-07
STATUS: Cup. After surging Wednesday, BG tested back Thursday and Friday on lower and lower trade, tapping the 10 day EMA on the Friday low and rebounding to cut the losses. After this test that has formed the handle we are looking to move in as BG rebounds on rising trade. To recap: 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: 1.219M Avg Volume: 1.238M
BUY POINT: $113.69 Volume=1.6M Target=$129.95 Stop=$109.66
POSITION: BG AC - Jan. $115c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/bg.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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