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us stock market, stock watch
Begin Part 2 of 3
THE PLAYS:
WLP and PMI announced splits today!! Also, we saw solid moves on put plays again, including PWAV, EXPD, PMCS, SNPS, CHBS and IBM, with GNSS giving up support yet again. DIAN made a huge breakout to the upside, and JCI broke out as well!
BONUS PLAYS:
Upside
ROST (Ross Stores--$36.65; +0.76; optionable): Retail Apparel
http://biz.yahoo.com/p/r/rost.html
STATUS: Upside. ROST broke out of a short cup pattern in December, and had made two runs off of the 18 day MVA since that time. It touched down below the 18 day MVA (35.76) Wednesday and then started the bounce today on stronger volume (1.65 million; average 950,000). We are looking to capitalize on this third bounce off the 18 day MVA, trying to capture a $4 move, but willing to let it continue to run. Target: 40.50
BUY POINT: 37.20 on continued strong volume.
POSITION: Stock is possible, but we are looking at options mainly on this closer target play. May $30 calls to buy (REQ EF; 74 OI; 93 delta).
IR (Ingersoll-Rand; $45.85; +1.85; optionable): Machinery
http://biz.yahoo.com/p/i/ir.html
STATUS: In a 9-week cup with handle, IR started a breakout move today over the pivot point (46, previous handle high), but volume was not breakout caliber (1.56 million; 1.4 million average). A strong session as the cyclical stock benefited from fear in techland, but it needs more volume to get our money. Very good money flow and accumulation ongoing. Target: 50 is initial resistance, so we will be careful there with options plays.
BUY POINT: 46.25 on 2 million shares or more.
POSITION: Stock and/or June $40 calls to buy (IR FH).
Downside
IDTI (Integrated Device Tech--$27.83; -2.69; optionable): Semiconductor
http://biz.yahoo.com/p/i/idti.html
STATUS: In somewhat of a descending wedge/pennant, IDTI broke below the 50 day MVA (simple; 28.06) today on rising, above average volume (4.81 million; average 3.2 million). It hit its recent resistance at 32 Friday, and after a bounce up from the simple 50 day Wednesday, it looks ready to test 24 on this rising volume.
BUY POINT: 27.50 on continued strong volume
POSITION: April 35 puts to buy (ITQ PG; low open interest; -0.71 delta).
Quick updates prior bonus:
MYGN - Gapped way down after hitting the put buy point Wednesday!
SVU - Still looking good in the pattern
RMCI - Tested all the back to its 18 day MVA before hitting the buy point, but without the volume we wanted.
PTV - Broke out but pulled back with the market to close. Looking for it to hold and try again.
WTSLA - Still looking good in the consolidation.
DRIV - A lower volume relief bounce after the big move down. Bias still down.
ONE - Holding support for the moment at prior February lows.
ROAD - Strong bounce up but still stymied at the 50 day.
ANSI - We weak relief bounce.
MARKET FAVORITES:
AMD (Advanced Micro--$13.14; -1.58; optionable): Semiconductor
http://biz.yahoo.com/p/a/amd.html
STATUS: Put. Has been in a downtrend since the summer of 200, but more recently since making it back up to the January high at 20.60, off of the run from the September and October lows. AMD broke below its 50 day MVA in late January and hasn't been able to cross back over, most recently turning down from that resistance 5 days ago. Now it is the 10 day MVA (14.50) that pushed it back down after a Wednesday move up to that resistance. AMD fell to a new closing low today on that move, with volume surging to 10.9 million (avg. 6.7 million), dragged down by Intel. Looking for a continued breakdown, initial target at 10.
BUY POINT: 13 on continued strong volume.
POSITION: July $20 puts to buy (AMD SD).
Quick updates of prior plays:
YHOO - Turned back down again, though volume was weaker.
JNPR - Still trickling down on falling, but above average volume.
BRCM -Still drifting down on above average volume, and still looking at the target of 30.
IBM - Punished again on accounting concerns. (Dropping on falling, but above average volume, and quickly approaching potential support at its long-term up trendline.)
PRE-ANNOUNCEMENT PLAYS FOR THIS WEEK: No announcement from DIAN with earnings Thursday, but what a move!
PRE-ANNOUNCEMENT BEST PLAYS
DIAN -Excellent breakout!
AZO -Broke out of the ascending wedge today!
STU - Still in the consolidation
XL - Holding support on the test
DHI -High volume may signal a move out of the pennant
GTK - Holding in a tight pattern
SLM - Dipped back again
DIAN (Dianon Systems--$66.89; +4.64; optionable): Did not get the announcement, but DIAN took off with earnings and news of a positive outlook. http://biz.yahoo.com/p/d/dian.html
BACKGROUND: Based upon our research it does not appear that DIAN has ever split its stock. The annual shareholder meeting was on 10-25-00 at which no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Hit the aggressive buy point Wednesday and then broke out in a big way today, gapping up and then taking out its former high of 65 (hit on an intraday spike). Volume was huge (719,100; average 264,500) on the good earnings news, and DIAN hit an intraday high of 67.43 before pulling back slightly. Right up at our 5% breakout buy threshold, and we are targeting 72 initially.
BUY POINT: Right below the 5% buy threshold (67), but we can also look at a test back that holds 65, looking at new or additional positions on a strong move back up from there.
POSITION: Stock and/or May $60 calls to buy (UID EL).
AZO (Autozone--$68.90; +0.90; optionable): Auto Parts. Forecast to announce a split with earnings. Our research indicates that the release will be 2-26-02 before the open.
http://biz.yahoo.com/p/a/azo.html
BACKGROUND: Last announced a 2:1 split in March of 1994 at a price of $58. The annual shareholder meeting was on 12-14-00 at which time no additional shares were authorized.
STATUS: Nice break from the pattern! AZO has been moving in a tight consolidation for two months, forming an ascending wedge over the last month, and started the move we have been watching for today. It took off from the recent pattern highs (68) and sailed through our buy point on its way up an intraday high of 69.53 on sharply increased volume of 1.41 million (average 1.16 million). Looking for the upward momentum to continue as we head into the forecast. From here AZO is still a buy up to 71.72. Target: 80 (high from December).
BUY POINT: From here: Still a buy up 71.72 on continued strong volume. Stop: 64.10-66.70.
POSITION: Stock and/or June $65 calls to buy. (AZO FN).
STU (Student Loan--$88.40; +0.20; no options): Continuing to research a possible date.
http://biz.yahoo.com/p/s/stu.html
BACKGROUND: Based upon our research it does not appear that STU has ever split its stock. The annual shareholder meeting was on 5-16-01 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
STATUS: STU has done very well, making solid bounces for us along the short-term MVA's. It broke over its April and August highs with a December breakout move, broke out of a pennant in January, and now it has formed another lateral consolidation. We have been cautious in protecting positions, but STU made a gradual move laterally to intersect with its 10 day MVA (87.79), and rested there for much of the past week with loose dojis. We got a huge volume spike (60,300; average 14,000) Wednesday, signaling that some action could be on the way, but today volume settled down again (10,800) as the stock showed a move up to 88.95 but closed with a tight doji. Looking for a run to 100 on a breakout.
BUY POINT: Over 89 on volume of 19,000. Stop: 82.86.
POSITION: Stock.
XL (XL Capital--$94.27; +0.13; optionable): Property & casualty insurance. Working on an announcement date, but are looking at a board meeting the first week in April.
http://biz.yahoo.com/p/x/xl.html
BACKGROUND: Based upon our research it does not appear that XL has ever split its stock. The company has sufficient shares for a 2:1 split.
STATUS: After the big breakout move a week ago, XL topped out at 98.48 and peeled back. It has dropped back through its former highs (at 96, from its November pennant), but volume was lower on the selling and it is now holding it short-term MVA's (tapping the 18 day, 91.88, at its low Wednesday and the 10 day, 93.08, at its low today). XL reached up to 94.90 today, but closed with a doji on increased volume (913,900; average 851,700). Looking for a bounce, although it could need to rest a bit first at this support. Target on a move over the high: 110.
BUY POINT: Over 95 on volume of 1 million or better. Stop: 89.50.
POSITION: Stock and/or July $90 calls to buy (XL GR).
DHI (D.R. Horton--$37.00; +0.70; optionable): Residential construction. Forecast to announce a split with a board meeting on 2/26/02.
http://biz.yahoo.com/p/d/dhi.html
BACKGROUND: Last split 7:5 in September 1995 at $15.
STATUS: Approaching the board meeting, and DHI continues to look good as it moves in a narrow pennant pattern along the short-term MVA's (18 day at 36.13). It tested through the 18 day again today, before pushing up to an intraday high of 37.42 and pulling back a bit at the close as volume shot up to 2.80 million (average 938,700). The pattern looks good, we are watching to see if today's volume surge presages a breakout run as we head into the forecast. Target on a new breakout: 45.
BUY POINT: 38.09 on volume of 1 million or better. Stop: 35.42.
POSITION: Stock and/or May $35 calls to buy (DHI EG).
GTK (Gtech Holdings--$43.69; -0.94; optionable): Business software. Working on a date.
http://biz.yahoo.com/p/g/gtk.html
BACKGROUND: Based upon our research it does not appear that GTK has ever split its stock. The annual shareholder meeting was on 7-9-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Continues in a tight pennant pattern, showing another doji over the short-term MVA's (10 and 18 day at 50.02 and 49.44), as volume continues to be low (226,700; average 395,000). Still looking for the breakout, and targeting 58.
BUY POINT: 51.58 on volume of 530,000. Stop: 48.
POSITION: Stock and/or June $47.50 calls to buy (GTK FW).
SLM (USA Education--$90.84; -1.36; optionable): Researching a new date, and we are looking now at a board meeting that our research shows will be in early April.
http://biz.yahoo.com/p/s/slm.html
BACKGROUND: Last announced a 7:2 split on 11-21-97 at $38. There are enough shares for a 3:2 split.
STATUS: Made a nice, strong bounce Wednesday after tapping intraday at the 18 day MVA (90.13), but reversed today, pulling back on lighter volume (849,400; average 728,000). Still looking decent in its small pullback in the consolidation, if it can hold over the 18 day. The consolidation formed after SLM made a very strong move earlier this month on the test of a breakout from a small cup. We generally like the price/volume action (strong on up days and below average with selling), and SLM is still holding the range of the January high (91.50). We continue to watch for the next run. Target: 105.
BUY POINT: Breakout: 93.95 on volume of 970,000. Stop: 89. Aggressive: Over 92.26 on increased volume. Stop: 89.
POSITION: Stock and/or July $90 calls to buy (SLM GR).
PRE-SPLITS BEST PLAYS: Remember, we try to grab these as they break out of good patterns or as they start a run right before the split. Not looking for home runs, but looking for those $3 to $4 moves running into the split, watching for topping signs and potential resistance. Not huge money, but it can be very steady. We set our initial stops at the 7-8% range below the purchase price (or just below obvious support), and move them up on a move to preserve our profits.
BSYS - One last chance before the split
ACS - Riding as it made the move down
BSYS (Bisys Group--$63.08; -1.07; optionable): Business software. Splits 2:1 effective 2-25-02.
http://biz.yahoo.com/p/b/bsys.html
STATUS: Made a nice bounce Wednesday, but just could not sustain it. BSYS pulled back today, closing just above its 10 day MVA (62.55) on light volume (299,300; average 558,400). With current positions we can see if it holds onto the 10 day, making a higher low in a small ascending wedge, but we are looking at the split date Monday, so we have to use caution to protect from a possible drop - however, there is quite a bit of support below, with the 50 day at 61.26. New positions are aggressive on a break over the recent highs as the play would likely be a ride through the split, and we will do that on a good pattern, but will exercise a high degree of caution. The high is at 66, and is the initial resistance we will look at on a move, and on a move over that level target 72.
PLAY: Aggressive: 64.55 on above average volume, with stock and/or June $60 calls to buy (BQY FL). Stop: 60.03.
ACS (Affiliated Computer--$91.61; -3.09; optionable): Information technology services. Splits 2:1 effective 2-25-02.
http://biz.yahoo.com/p/a/acs.html
STATUS: Another stock heading toward the split. ACS made a good move today, running down through the put buy point again. Volume was not that high on the selling (730,700; average 695,300), but on a downside play like this we are not concerned with a post split slump, as that would be a good thing. We are riding positions toward our target of 88, although we could get a move down to the 200 day at 86.26.
CONTINUING CANDIDATES BEST PLAYS:
JCI - Broke out!
GNSS - Gave up the 200 day
TGIC - Broke out but could not hold against the market
TGH - Started back up in the handle
RARE - Holding in the handle
RYL - Bounced back up on big volume
HB - Tightening pennant
FLIR - Nice run but could be in for a test back
DHR - Another breakout that pulled back to close with the market
JCI (Johnson Controls--$79.10; +0.04; optionable): Auto parts.
http://biz.yahoo.com/p/j/jci.html
BACKGROUND: Based upon our research it does not appear that JCI has ever split its stock. The annual shareholder meeting was 0n 1-24-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Broke out of the nice lateral pattern over the 10 day MVA (85.27), which JCI had formed while resting from a good move from its 50 day MVA (81.35). It is now at a new high after today's move, which came on solid volume of 623,700 (average 418,500). It is approaching our initial target of 90 for buys back on the bounce, but on the strength of this move we are moving our target up to 100, looking for JCI to run to that number. BUY POINT: Still a buy up to 91.25 on continued strong volume. Stop: 81.84-84.86.
POSITION: Stock and/or July $85 calls to buy (JCI GQ).
GNSS (Genesis Microchip--$39.27; -3.56; optionable):
http://biz.yahoo.com/p/g/gnss.html
BACKGROUND: Based upon our research it does not appear that GNSS has ever split its stock. The annual shareholder meeting was on 9-20-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: GNSS has been a great put play, but it could give us even more from here. It dipped below the 200 day but recovered Wednesday on huge volume, but fell back through that level of support Thursday as volume was down, but still strong (6.36 million; average 3.16 million). It closed just short of Wednesday's low of 38.85, and has some possible support at 37-38 from some June-August highs. However, the big volume drop through the 200 day does not bode well for a recovery, and with positions not sold upon reaching the target, or new positions, we can look at a possible ride down to 35.
BUY POINT: Aggressive: A drop through 38.85 on continued strong volume.
POSITION: April $50 puts to buy (QFE PJ).
TGIC (Triad Guaranty--$42.25; +0.40; optionable): Surety & Title Insurance.
http://biz.yahoo.com/p/t/tgic.html
BACKGROUND: Last announced a 2:1 split on 9-18-97 at a stock price of $28.25. The annual shareholder meeting was on 5-10-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: TGIC tried to breakout, hitting up to 43.29 at its high, but pulling back with the market to close back in the confines of its handle-type consolidation. Volume remained strong at 94,200 (average 39,500). A solid attempt, but we will look carefully to see if TGIC can hold in the pattern and not continue to fall back. If it can hold onto the 18 day MVA (40.92), it can certainly make another run. The consolidation formed nicely, with a gradual pullback, made after a breakout from a cup with handle. Target: 49.
BUY POINT: After holding support at the 18 day, a move back over 42.50 on continued strong volume. Stop: 39.62 (7%).
POSITION: Stock.
TGH (Trigon Healthcare--$75.72; +0.74; optionable):
http://biz.yahoo.com/p/t/tgh.html
BACKGROUND: Based upon our research it does not appear that TGH has ever split its stock. The annual shareholder meeting was on 4-25-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Still looking solid. TGH made a nice breakout from a 3-month cup with handle in January, and after a good run has pulled back into another handle to its larger, 13-month cup with handle base (left-side high 81.50). TGH saw some high volume on its most recent move up and reversal, but settled down nicely over its 18 day MVA (74.53). Today it bounced, stopping just below our bounce buy point, moving on strong volume (318,800; average 192,500). Our original target for positions taken last month was 84, although we looked at taking some money off the table when the stock was topping recently. If it can make a new breakout move, targeting 92.
BUY POINT: From here: Over 76 on continued strong volume. Stop: 70.77 (7%; 50 day at 71.73). Breakout is over the recent high at 79, with volume of 300,000. Stop: 73.56.
POSITION: Stock and/or July $70 calls to buy (TGH GO - under 100 open interest).
RARE (Rare Hospitality--$26.30; +0.30; optionable): Restaurants.
http://biz.yahoo.com/p/r/rare.html
BACKGROUND: Last announced a 3:2 split on 7-26-00 in conjunction with earnings. The stock price was 29.50. The annual shareholder meeting was on 5-14-01 at which time authorized shares were increased. The company has sufficient shares for a 2:1 split.
STATUS: RARE is in a cup with handle dating back to May (high 28.43; all-time high at from February at 32). It pulled steadily back in the handle to tap its 50 day MVA (24.52), bouncing back over its short-term MVA's (18 day at 25.61). Volume was low the last two sessions, showing a doji today on below average volume (229,400; average 267,700). Looking for it to hold the 18 day, and make a break over the handle high at 27.05 (there is an intraday spike at 27.50 made just before the handle formation). Target: 32.
BUY POINT: Breakout: 27.15 on minimum volume of 400,000. Stop: 25.25. Aggressive: Over 26.22 on above average volume. Stop: 24.38 (7%).
POSITION: Stock and/or May $25 calls to buy (QRH EE - low open interest).
RYL (Ryland Group--$80.70; +2.75; optionable): Residential construction.
http://biz.yahoo.com/p/r/ryl.html
BACKGROUND: Based upon our research it does not appear that RYL has ever split its stock. The annual shareholder meeting was on 4-25-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: In an ascending wedge, and Wednesday sold back on increased, strong volume, but managed to hold the 18 day MVA (77.97) to close. That has been strong recent support, and by holding it makes a higher low, and today RYL took off from that support, moving back up in the pattern on even stronger volume than we saw on Wednesday (709,200; average 377,200). Nice move, and we are looking for the breakout. We have been riding position toward a target of 85, but on a strong move over the high (81.99), we will adjust the target to 90.
BUY POINT: New high: 82.09 on volume of 500,000. Stop: 7634 (7%).
POSITION: Stock and/or July $75 calls to buy (RYL GO).
End Part 2 of 3
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