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us stock market, trade stock
Begin part 3 of 3
THE PLAYS:
New Post-Split Play:
Play Date: 12/08/2007
CTRP (Ctrip.com International--$60.23; -2.20; optionable): Chinese travel services
http://biz.yahoo.com/p/c/ctrp.html
EARNINGS: Announced 11-7-07
STATUS: Reverse head and shoulders. This is a common accumulation pattern for many stocks over the past month in the up and down market. CTRP is a leader that is steadily moving higher up the 50 day EMA (55.23), but it is a volatile move as Chinese growth stocks tend to be. It has set up this pattern the past month, using the 50 day EMA on the low as the support in the 'head'. Great volume Wednesday though it was volatile with a gap lower and recovery into the close. Even with that the pattern looks promising, and on an high volume breakout move we are moving in and riding this one as it has made us great money on this run.
Volume: 571.836K Avg Volume: 857.346K
BUY POINT: $62.55 Volume=1.2M Target=$71.95 Stop=$59.77
POSITION: QCT CM - Mar. $65c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/ctrp.html
Play Date: 12/08/2007
NE (Noble Corp.--$53.71; -0.22; optionable): Oil and gas drilling
http://biz.yahoo.com/p/n/ne.html
EARNINGS: Mid-January 2008
STATUS: Double bottom with handle. NE has formed a short 4 week base over the 90 day SMA as the tail end to a larger 5 month ascending base. It is setting up nicely for a break higher but as with many energy stocks last week it had no volume on the week. Nonetheless it has set up a good pattern and now we look for volume to jump up some as it makes the break higher and gives us the entry point.
Volume: 2.883M Avg Volume: 4.562M
BUY POINT: $54.36 Volume=5.2M Target=$62.55 Stop=$52.22
POSITION: NE CX - Mar. $52.50c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/ne.html
New Pre-Announcement Play:
Play Date: 12/08/2007
DRYS (Dryships--$89.82; +6.17; optionable): Shipping. Splits 3:1 on a date to be announced.
http://biz.yahoo.com/p/d/drys.html
EARNINGS: Announced 11-6-07
STATUS: Reverse head and shoulders. Yes another one of these patterns, this one forming at the bottom of what is shaping up to be a cup base, currently 7 weeks into the process. Stocks often set up this pattern at the bottom of this type of base and make the breakout to carry it off the bottom of the base and form the right side. That can give us great gains as the stock surges back up toward the prior high, in this case 130. Volume was up Friday as DRYS posted a solid gain. Looking to move in as it floats higher and shows even stronger trade. Can really sail along when it gets going. It needed this base after that massive run, and this is setting it up for the next big run. Top sales and earnings growth rates.
Volume: 4.057M Avg Volume: 4.088M
BUY POINT: $92.22 Volume=6M Target=$110.95 Stop=$86.95
POSITION: DQR CR - Mar. $90c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/drys.html
New Leader Plays:
Play Date: 12/08/2007
DSX (Diana Shipping--$34.65; +1.60; optionable): Shipping
http://biz.yahoo.com/p/d/dsx.html
EARNINGS: Announced 11-14-07
STATUS: Double bottom w/handle. Volume was rising Friday (though still below average) as DSX shipped higher, moving off of support at the 50 day EMA that held up the handle, heading toward the breakout from its 5 week base. Similar to DRYS, Diana enjoyed a big run in October when it broke out from its last base, and that gave us a very nice gain. It is setting up to ship out again and make us some more money. Looking for a continuing climb in volume as it makes the move through the buy point. Enjoys top flight earnings and sales growth rates.
Volume: 2.393M Avg Volume: 3.22M
BUY POINT: $35.48 Volume=4.2M Target=$42.75 Stop=$32.97
POSITION: DSX AG - Jan. $35c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/dsx.html
Play Date: 12/08/2007
SNDA (Shanda Interactive Ent.--$38.43; +0.86; optionable): Chinese online gaming
http://biz.yahoo.com/p/s/snda.html
EARNINGS: Announced 11-28-07
STATUS: Reverse head and shoulders. Yep, another one of these accumulation patterns; when the market is up and down these tend to form. SNDA was not immune to the selling in November, falling hard ahead of its earnings report. That set up a big move higher, however, as earnings proved to be very strong. Big surge and then a fade to test, holding the 50 day EMA (35.84) on the low and then bouncing off that support starting Wednesday. Volume improved but it was not strong enough yet. Looking for that to improve as SNDA shows the breakout. May not be until the Fed speaks, but we can afford to wait.
Volume: 1.14M Avg Volume: 1.876M
BUY POINT: $39.11 Volume=2.2M Target=$49.95 Stop=$36.89
POSITION: QKU CH - Mar. $40c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/snda.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: Looking for an announcement in January.
ATK: Looking for a February announcement.
ATW: Likely to announce in January.
BUCY: Gapped higher on the strongest volume of the move.
COST: Forecast mid-December
EOG: Anticipating an announcement in late January
HRS: Looking to January for an announcement.
ISRG: Looking to pinpoint a date.
MA: Forecast late January
MICC: Tentatively forecast for mid-December.
MON: Researching the date.
OTEX: Forecast early 2008
RIG: On the rebound after that gap lower.
SGR: Forecast late January.
SID: Doji Friday after the surge. May be time to test some.
STLD: Researching date. Exploded higher for us last week.
STT: Forecast mid-January
UPL: Forecast late January
NEW PRE-ANNOUNCMENT PLAYS
Play Date: 12/08/2007
AMX (America Movil--$64.85; -0.18; optionable): Latin America wireless communications
http://biz.yahoo.com/p/a/amx.html
EARNINGS: Third week of January, 2008
STATUS: Double bottom w/handle. AMX has set back up again, and over the past two sessions has started work on the handle to its 7 week base. Nice action though volatile to get to this point; the definition of a double bottom. It used the 200 day SMA (58.16) roughly as support for both legs as they tapped down at 55 and rebounded. May take a couple more sessions to complete the handle, just in time for the FOMC decision on Tuesday afternoon. That is the beauty of this: if it makes the breakout on the news we move in. Indeed, the pattern is solid, so if it breaks higher before then we move in as well.
Volume: 3.937M Avg Volume: 6.213M
BUY POINT: $65.62 Volume=9.3M Target=$75.45 Stop=$62.88
POSITION: AMX BM - Feb. $65c (49 delta) &/or Stock
http://www.investmenthouse.com/cs/amx.html
Play Date: 12/08/2007
LFC (China Life Insurance--$85.65; -2.59; optionable): Chinese life insurance
http://biz.yahoo.com/p/l/lfc.html
EARNINGS: Last week of January 2008
STATUS: Reverse head and shoulders. Forming this accumulation pattern at the bottom of its 7 week base. This past week saw LFC jump higher over the 50 day EMA (84.64) and then come back and use that as support on Friday, a very good sign the move is going to stick. If it holds it has a clear shot back up toward the prior highs just over 100. That is the move we are looking to play. It gives us a great gain without having to plough new ground.
Volume: 1.653M Avg Volume: 2.132M
BUY POINT: $86.77 Volume=3M Target=$99.95 Stop=$84.39
POSITION: LFC DQ - Apr. $85c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/lfc.html
CONTINUING PRE-ANNOUNCEMENT PLAYS
Play Date: 11/29/2007
HRS (Harris Corp.--$63.57; +0.64; optionable): Telecom equipment
http://biz.yahoo.com/p/h/hrs.html
EARNINGS: Announced 11-1-07
STATUS: Moving higher but volume is moving the other way. Just need to see some better trade and it is a buy as it continues higher. To recap: A four week lateral move along the 50 day EMA as HRS tests back from its early November surge on earnings. Money flow is surging higher ahead of price and we are looking for volume to jack up and follow it and price higher.
Volume: 448.93K Avg Volume: 802.494K
BUY POINT: On a continued move higher on rising trade (orig. $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: 12/01/2007
STT (State Street--$79.68; -0.16; optionable): Regional bank
http://biz.yahoo.com/p/s/stt.html
EARNINGS: Mid-January 2008
STATUS: Ascending base. Moved higher Thursday, but no volume to break it out. Took the day off Friday on continued low trade. Set up to make the break, just needs some volume to push it. To recap: Broke higher Thursday off a test of the 18 day EMA (77.30) where it made a higher low in its 6 week base. Has used the 50 day EMA on the move as support, and this higher low often signals the last test before the breakout. Nice price move Thursday and just looking for some more volume to accompany it.
Volume: 2.485M Avg Volume: 4.665M
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 POST-SPLIT PLAYS:
Play Date: 11/17/2007
DRQ (Dril-Quip--$58.04; +0.42; optionable): Oil and gas service company
http://biz.yahoo.com/p/d/drq.html
EARNINGS: Announced 11-1-07
STATUS: Breakout test. Gapped higher Friday, showing a doji and no volume. That lack of trade kept us out of it, but if DRQ continues higher and gets some more trade as it showed Thursday, we are in. 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: 397.14K Avg Volume: 574.905K
BUY POINT: New: Continued move higher on rising traded (orig. $57.89) Volume=795K Target=$67.95 Stop=$55.48
POSITION: DRQ CK - Mar. $55c (63 delta, 163 OI) &/or Stock
http://www.investmenthouse.com/cs/drq.html
Play Date: 12/06/2007
SCSC (Scansource--$36.69; +0.19; optionable): Wholesale specialty technology products
http://biz.yahoo.com/p/s/scsc.html
EARNINGS: 1-24-07
STATUS: Reverse head and shoulders. Huge volume Friday, the best in over a month, but SCSC barely scratched higher. Like the volume, however, and looking for a continued break to the upside this week that we can buy into. To recap: Breaking higher Thursday on rising volume, but still below average, as it moves toward the breakout from its 6 week base. Used the 50 day EMA on the low as support, showing investors stepping in at that level. Gapped higher in late October on earnings, clearing a 4 month base. It filled the gap on the low in this pattern, so that is behind it. Now looking for another new all-time high as SCSC continues the break higher. Looking for a bit more volume as it does.
Volume: 405.374K Avg Volume: 209.382K
BUY POINT: $36.78 Volume=314K Target=$42.38 Stop=$34.48
POSITION: UHI CG - Mar. $35c (58 delta, low OI) &/or Stock
http://www.investmenthouse.com/cs/scsc.html
CONTINUING LEADER PLAYS:
Play Date: 12/06/2007
BIDU (Baidu.com--$390.00; -2.88; optionable): Chinese Google
http://biz.yahoo.com/p/b/bidu.html
EARNINGS: Third week of January 2008
STATUS: Double bottom w/handle. A nice quiet session Friday, showing a very tight doji on low volume as it continued work on the handle. Just waiting for the break higher. To recap: Working laterally the past week on lower, below average volume as it forms the handle to its 5 week base. Very nice low volume action, shaking out the final sellers before the break higher. It used key support at the 50 day EMA (333) on the low and is now setting up for the breakout move. It has made us some big money on past runs, and looking for volume to jump higher as BIDU makes the break from this pattern. This is a classic, textbook pattern. May take another session or two before it makes the break, meaning the FOMC announcement may provide the catalyst. Either way, this is one solid pattern.
Volume: 3.129M Avg Volume: 7.656M
BUY POINT: $395.22 Volume=9M Target=$454.00 Stop=$389.89
POSITION: BPJ AT - Jan. $400c (52 delta)
http://www.investmenthouse.com/cs/bidu.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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