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Begin part 3 of 3
THE PLAYS:
New Pre-Split Play:
Play Date: 12/13/2007
CMI (Cummins--$124.14; -0.56; optionable): Engines, etc. Splits 2:1 on 1-3-08
http://biz.yahoo.com/p/c/cmi.html
EARNINGS: 2-1-07
STATUS: Double bottom w/handle. CMI is working laterally the past week, holding above the 50 day EMA (120.32) and the 90 day SMA (121.70) the past week, working on mostly below average volume. Got a bit rocky on Tuesday, but volume remained low. A solid volume surge Wednesday as CMI tested upside. Looking for it to finish this lateral move over the next couple of sessions and then make the break higher in a pre-split move.
Volume: 1.083M Avg Volume: 1.795M
BUY POINT: $125.88 Volume=2.5M Target=$144.95 Stop=$120.89
POSITION: CDM CE - Mar. $125c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/cmi.html
Play Date: 12/13/2007
DNR (Denbury Resources--$55.91; -1.47; optionable): Independent oil and gas. Splits 2:1 on 12-17-07
http://biz.yahoo.com/p/d/dnr.html
EARNINGS: 2-21-07
STATUS: Cup w/handle. The split is effective Monday, and we are looking to get into DNR when it shows us the move whether pre-split are post. Nice little 5 week base formed using the 50 day EMA (52.78) as support. Great consolidation of the September to October run, and this base is setting it up for the next run. Volume has moved above average the past two sessions, indicating it is preparing to make its move.
Volume: 1.347M Avg Volume: 1.104M
BUY POINT: $57.74 Volume=1.7M Target=$67.95 Stop=$55.21
POSITION: DNR CK - Mar. $55c (62 delta) &/or Stock
http://www.investmenthouse.com/cs/dnr.html
New Post-Split Play:
New buy point on current play:
Play Date: 12/13/2007
POT (Potash--$126.50; -3.04; optionable): Fertilizer
http://biz.yahoo.com/p/p/pot.html
EARNINGS: Third week of January 2008
STATUS: Test breakout. POT broke higher from a short 5 week double bottom w/handle base to start the month, rallied to 135, then tested back to the 10 day EMA (125.78), using the Fed generated turmoil to take a breather. Nice doji on the 10 day EMA on Thursday. Looking to move in to some more positions as it continues higher off of this test.
Volume: 3.442M Avg Volume: 3.713M
BUY POINT: $127.65 Volume=5M Target=$146.95 Stop=$124.72
POSITION: PYP CE - Mar. $125c (60 delta) &/or Stock
http://www.investmenthouse.com/cs/pot.html
New Leader Plays:
Play Date: 12/13/2007
NDAQ (Nasdaq Stock Market--$46.69; +1.31; optionable)
http://biz.yahoo.com/p/n/ndaq.html
EARNINGS: Third week of January 2008
STATUS: Cup w/handle. Excellent volume Monday as NDAQ started to surge higher, but it could not hold the move in the FOMC aftermath, selling back to the 10 day EMA (45.25) on lower volume. It held that level Thursday and started to bounce, but no volume. Looking for volume to rally as NDAQ continues this move higher toward a new all-time high. Very nice.
Volume: 1.706M Avg Volume: 2.914M
BUY POINT: $47.05 Volume=4M Target=$55.00 Stop=$44.55
POSITION: NQD CI - Mar. $45c (64 delta) &/or Stock
http://www.investmenthouse.com/cs/ndaq.html
New buy points on current play:
Play Date: 12/13/2007
CMG (Chipotle Mexican Grill--$144.40; -0.77; optionable): Mexican fast food
http://biz.yahoo.com/p/c/cmg.html
EARNINGS: Lat January 2008
STATUS: Breakout test. CMG just continues to rally. It broke out in early December from a 5 week cup with handle formed over the 50 day EMA. Solid move higher through Monday and then tested back on the Fed news. Volume was low, so no selling. Then a further test lower Thursday and a rebound after tapping at near support at the 18 day EMA. Looking to move in as CMG continues higher on solid volume once more (Thursday trade rose to average) to move into the play.
Volume: 697.725K Avg Volume: 631.823K
BUY POINT: $145.38 Volume=7.5M Target=$167.45 Stop=$141.89
POSITION: CMG CV - Mar. $145c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/cmg.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.
AMX: Potential in late January
ATK: Looking for a February announcement.
ATW: Likely to announce in January.
BUCY: Slammed back Tuesday as some leaders were sold off. Managed to hold near the 10 day EMA.
COST: Forecast mid-December
EOG: Anticipating an announcement in late January
HRS: Looking to January for an announcement.
HUM: Forecast first week of February
IRM: Forecast late January
ISRG: Looking to pinpoint a date.
LFC: Researching date
MA: Forecast late January
MICC: Tentatively forecast for mid-December.
MON: Researching the date.
OII: Early February
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
STT: Forecast mid-January
UPL: Forecast late January
NEW PRE-ANNOUNCMENT PLAYS
Play Date: 12/13/2007
GD (General Dynamics--$92.76; +1.08; optionable): Aerospace/defense
http://biz.yahoo.com/p/g/gd.html
EARNINGS: 1-23-07
STATUS: Cup w/handle. Broke higher in September from an 8 month trading range and rallied to 94. It needed to consolidate and has formed the current 6 week base to do that, coming back to the 50 day EMA (88.65) on the lows to form the cup. Nice surge higher to start the month, testing this week after the Fed action (or lack thereof). Held the 18 day EMA (90.89) on the lows and bounced Thursday. No volume, but expect that to come back as GD continues the break higher. Very nice.
Volume: 1.434M Avg Volume: 1.754M
BUY POINT: $93.55 Volume=2.6M Target=$107.95 Stop=$90.68
POSITION: GD BR - Feb. $90c (69 delta) &/or Stock
http://www.investmenthouse.com/cs/gd.html
CONTINUING PRE-ANNOUNCEMENT PLAYS
Play Date: 12/12/2007
HUM (Humana--$76.79; +0.46; optionable): Health care plans
http://biz.yahoo.com/p/h/hum.html
EARNINGS: 2-4-08
STATUS: Cup w/handle. Bounced modestly Thursday on low volume, still in the handle, and still set up to make the break higher. Very nice. To recap: Very nice pattern has formed the past 7 weeks as HUM sets up for the next breakout to a new all-time high. Just about right on all fronts with the pattern: used the 50 day EMA as the bottom of the cup, volume swelled to average or better as it moved up in late November to form the right side of the base and then faded this month as HUM tested and formed the handle, the shakeout to get rid of the last undecided holders. Volume jumped up above average Wednesday as HUM posted a gain, closing just over the 10 day EMA and showing a tight doji on the candlestick chart. That can indicate the pullback is over, and looking for more volume as it makes the break higher. Doesn't hurt that it is in the healthcare sector in this market.
Volume: 1.393M Avg Volume: 1.613M
BUY POINT: $77.88 Volume=2.4M Target=$88.95 Stop=$75.15
POSITION: HUM BO - Feb. $75c (68 delta) &/or Stock
http://www.investmenthouse.com/cs/hum.html
Play Date: 12/11/2007
IRM (Iron Mountain--$37.07; +0.08; optionable): Document storage
http://biz.yahoo.com/p/i/irm.html
EARNINGS: Last week of January 2008
STATUS: Cup w/handle. Tested a bit further Thursday, tapping at the 18 day EMA and then rebounding to close flat. No volume, just a good shakeout. Getting ready to pop. To recap: Very nice, orderly 5 week base has formed using near support at the 18 day EMA (36.35) as the bottom of the pattern. Ice run following the breakout from a long base in September. IRM forms these small bases and then breaks higher for nice 6 to 8 point runs. Excellent action the past week, fading back to form a handle or shakeout on low volume, holding the 10 day EMA Tuesday. Looks ready to make the breakout despite the market.
Volume: 296.1K Avg Volume: 661.294K
BUY POINT: $37.95 Volume=991K Target=$43.95 Stop=$36.22
POSITION: IRM DG - Apr. $35c (64 delta) &/or Stock
http://www.investmenthouse.com/cs/irm.html
Play Date: 12/05/2007
WFT (Weatherford International--$66.65; -0.02; optionable): Oil and gas equipment services
http://biz.yahoo.com/p/w/wft.html
EARNINGS: Third week of January 2008
STATUS: Breakout test. Nice lateral consolidation the past week as WFT consolidates its early December break above the September to November downtrend. Volume is starting to spike up on the upside sessions, and that is a sign it is ready to move. Just waiting for the break on some volume.
Volume: 4.079M Avg Volume: 4.009M
BUY POINT: $66.95 Volume=6.1M Target=$77.95 Stop=$64.97
POSITION: WFTBM - Feb. $65c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/wft.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 12/12/2007
SLB (Schlumberger--$96.62; -1.03; optionable): Oil and gas service company
http://biz.yahoo.com/p/s/slb.html
EARNINGS: Mid-January 2008
STATUS: Reverse head and shoulders. Tested a bit lower, but held the 50 day EMA on the close. Still in the right shoulder and setting up to make the break. To recap: SLB is moving in a tight lateral range the past week, cruising just over the 50 day EMA (96.40). It is resting after coming off the bottom of its 8 week base, forming the right shoulder of a reverse head and shoulders that has formed at the bottom of the larger cup. Volume bumped up to average Wednesday as SLB showed a doji on the candlestick chart. It has put in its time of consolidation after a nice run March to October. Now we are looking for the new break higher to make us some nice coin.
Volume: 6.843M Avg Volume: 9.258M
BUY POINT: $99.75 Volume=14M Target=$114.95 Stop=$96.31
POSITION: SDB BT - Feb. $100c (54 delta) &/or Stock
http://www.investmenthouse.com/cs/slb.html
CONTINUING LEADER PLAYS:
Play Date: 12/10/2007
CMED (China Medical Technologies--$42.68; -1.16; optionable): Chinese medical instruments
http://biz.yahoo.com/p/c/cmed.html
EARNINGS: Announced 11-20-07
STATUS: Double bottom w/handle. Nice test back on the Thursday low, bouncing off the 50 day SMA. Low volume, so still shaking out the sellers and setting up the move higher. Getting there. To recap: A volatile but consistent market leader, CMED has made us a lot of money over the past six months. It is setting up to break higher once, more, forming a 6 week double bottom with handle, working on the handle right now with a low volume, lateral move the past two sessions, testing lower then rebounding to close flat. That is the shaking out of the sellers as they give up as the stock appears to stall just below the prior highs. Getting close, and we are just going to be ready to move in as CMED makes its breakout move.
Volume: 380.651K Avg Volume: 738.354K
BUY POINT: New: Aggressive $43.89 (orig. $45.68) Volume=1M Target=$54.95 Stop=$42.94
POSITION: QCY CI - Mar. $45c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/cmed.html
CONTINUING LEADER PLAY:
Play Date: 12/04/2007
SPWR (SunPower Corp.--$125.88; -1.32; optionable): Solar power equipment
http://biz.yahoo.com/p/s/spwr.html
EARNINGS: 10-18-07
STATUS: Double bottom w/handle. Nice low volume test of the 18 day EMA (123.67) this week as SPWR puts the finishing touches on the handle to its 5 week base. Like how it used the 50 day EMA (113) as support on the second leg of the base. This one can fly when it gets rolling, and after this base and this handle consolidating the September to early October run, it will be ready to fly again soon.
Volume: 2.669M Avg Volume: 2.348M
BUY POINT: $130.38 Volume=2.8M Target=$149.95 Stop=$124.38
POSITION: QSU AW - Jan. $130c (55 delta)
http://www.investmenthouse.com/cs/spwr.html
Play Date: 12/11/2007
VARI (Varian--$70.92; +0.63; optionable): Scientific and technical instruments
http://biz.yahoo.com/p/v/vari.html
EARNINGS: Last week of January
STATUS: Reverse head and shoulders. Still a very nice set up, ready to make the break higher. Showing some good upside volume. Looks ready. To recap: Volume surged Tuesday, but it was not on VARI selling off. It tapped the 50 day SMA, the support in the right shoulder of its base, and bounced for a nice gain; some accumulation ongoing here. Nicely formed 6 week base formed using the 50 day EMA as support. Strong money flow is leading the way to a new high, and it looks as if VARI is a cinch to follow it higher.
Volume: 159.73K Avg Volume: 242.982K
BUY POINT: $71.24 Volume=350K Target=$81.95 Stop=$68.92
POSITION: IUA BN - Feb. $70c (54 delta, low OI) &/or Stock
http://www.investmenthouse.com/cs/vari.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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