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Begin part 3 of 3
THE PLAYS:
New Post-Split Plays:
Play Date: 12/18/2007
GMCR (Green Mountain Coffee Roasters--$40.14; +3.72; optionable): Coffee
http://biz.yahoo.com/p/g/gmcr.html
EARNINGS: 1-31-07
STATUS: Cup w/handle breakout. Volume jumped Tuesday as GMCR made the break from its nicely formed 10 week base. Textbook action from this stock you would not suspect to be such a growth monger. Looking to move in as it continues to percolate higher.
Volume: 353.939K Avg Volume: 269.286K
BUY POINT: $40.54 Volume=300K Target=$48.88 Stop=$37.88
POSITION: QGM CH - Mar. $40c (52 delta, 115 OI) &/or Stock
http://www.investmenthouse.com/cs/gmcr.html
Play Date: 12/18/2007
LKQX (LKQ Corp.--$20.49; +0.52; optionable): Auto parts (recycled OEM parts)
http://biz.yahoo.com/p/l/lkqx.html
EARNINGS: Third week of January 2008
STATUS: Ascending base. Split to start December and has since continued its 8 week base formed along the 18 day EMA (19.90) with a quick test to the 50 day EMA (19.05) during the November selling. That selling was just a pit stop for LKQX as it rebounded and has ridden through the recent selling with a lateral move along the 18 day. Good volume jump Tuesday as LKQX broke higher off near support. Looking for volume to continue holding up as it continues the move and shows us the breakout.
Volume: 1.302M Avg Volume: 1.401M
BUY POINT: $20.75 Volume=2M Target=$24.95 Stop=$19.68
POSITION: AUG BD - Feb. $20c (56 delta, 23 OI) &/or Stock
http://www.investmenthouse.com/cs/lkqx.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 third week of January.
AMX: Potential in late January
ATK: Looking for a February announcement.
ATW: Forecast late February or first week of March
BUCY: Quick test of the 50 day EMA. If it holds and continues up we will look at a new play.
EOG: Anticipating an announcement in late January or first week of February.
GD: Forecast first week of March. Needs to improve.
GME: Researching date. Nice start to the play!
HOLX: Researching date.
HRS: Forecast in February. Will pinpoint the date when we get a bit closer.
HUM: Forecast first week of February
IRM: Forecast tentatively late January but working on a better date.
ISRG: Tentatively set for last week of January.
LFC: Researching date
MA: Forecast late January
MON: Potential to announce early January with earnings (1-3-08).
OII: Early February
OTEX: Forecast early 2008. Struggling below the 50 day EMA and not in buy position.
RIG: On the rebound after that gap lower.
SGR: Forecast late January.
SID: Now it looks ready.
STLD: Tentatively forecast mid-January
STT: Forecast mid-January
UPL: Forecast second week of February
NEW PRE-ANNOUNCMENT PLAYS
Play Date: 12/18/2007
APA (Apache--$102.90; +1.87; optionable): Independent oil and gas
http://biz.yahoo.com/p/a/apa.html
EARNINGS: 1-31-07
STATUS: Double bottom w/handle. Used the market selling and turbulence to set up the current 7 week base formed using the 50 day EMA (97.73) as support. Nice volume last week as it moved higher to finish the right leg, and then very low, below average trade this week as it forms the handle, holding near support at the 18 day EMA (101). Very nice base has set up to send it to a new all-time high.
Volume: 2.72M Avg Volume: 3.503M
BUY POINT: $104.55 Volume=5.3M Target=$120.45 Stop=$100.91
POSITION: APA DA - Apr. $105c (48 delta) &/or Stock
http://www.investmenthouse.com/cs/apa.html
Play Date: 12/18/2007
APC (Anadarko Petroleum--$61.85; +0.43; optionable): Independent oil and gas
http://biz.yahoo.com/p/a/apc.html
EARNINGS: First week of February 2008
STATUS: Breakout test. Nice surge to start December as APC moved out of a 4 week double bottom base that formed using the 90 day SMA as support for the two legs. It came back in the selling Friday and Monday, holding at the 10 day EMA (61.35), showing a doji Tuesday at that near support. Nice break to a new high and this test is setting up a great entry point. Like tests of breakouts in this kind of market as the move back up on stronger volume shows buyers coming back in at a higher price.
Volume: 4.009M Avg Volume: 4.343M
BUY POINT: $62.44 Volume=4.5M Target=$71.95 Stop=$60.97
POSITION: APC BL - Feb. $60c (64 delta) &/or Stock
http://www.investmenthouse.com/cs/apc.html
Play Date: 12/18/2007
CHTT (Chattem--$72.61; +1.16; optionable): Over the counter healthcare products, toiletries, dietary supplements
http://biz.yahoo.com/p/c/chtt.html
EARNINGS: 9-27-07
STATUS: Double bottom w/handle. Excellent set up with its 9 week base. Used the 90 day SMA on the lows of the legs, rallied through the start of December, and then moved laterally the past two weeks, using the 18 day EMA (70.85). Great pattern with volume spiking above average Tuesday as CHTT tapped at support and then posted a nice gain. Nice.
Volume: 344.065K Avg Volume: 286.895K
BUY POINT: $73.38 Volume=425K Target=$84.48 Stop=$70.75
POSITION: HQT CN - Mar. $70c (67 delta, 196 OI) &/or Stock
http://www.investmenthouse.com/cs/chtt.html
CONTINUING PRE-ANNOUNCEMENT PLAYS
Play Date: 12/15/2007
HOLX (Hologic--$66.22; +1.14; optionable): Medical appliances (Mammogram machines)
http://biz.yahoo.com/p/h/holx.html
EARNINGS: 1-30-08
STATUS: Flat/Pennant. Gapped higher Tuesday, clearing the short term down trendline from October, but no volume. Needs to show some more backing on the move. To recap: HOLX is moving laterally along the 50 day EMA (63.46) the past 5 weeks, trading in a narrowing range above that key level. It gapped lower in early November after a strong September to October run, but it caught itself and this leader is setting up for the next move higher. Going to be patient, let it finish its lateral move, and then step in as it shows us the next break higher on strong volume and heads toward a new all-time high.
Volume: 1.809M Avg Volume: 2.909M
BUY POINT: $66.04 Volume=3.6M Target=$75.95 Stop=$64.22
POSITION: QHX CM - Mar. $65c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/holx.html
Play Date: 12/15/2007
SID (Companhia Siderurgical Nacional--$80.40; +3.19; optionable): Steel and iron
http://biz.yahoo.com/p/s/sid.html
EARNINGS: Mid-February 2008
STATUS: Breakout test. Coming off the test of the 50 day EMA (75.81) on stronger volume Tuesday, testing it intraday and then surging higher. Looking very good here. To recap: Strong run in 2007, but it does not look as if it is over moving into 2008. After a good run into late October, SID formed the current 7 week double bottom with handle pattern, breaking out in early December. It rallied into Tuesday, and then of course was sold back after the Fed's decision. As with other strong leaders, it used the market selling constructively, testing back in an orderly manner, holding the October high and the 18 day EMA (80.19) that are coincident. Like the action as it tests this level as it tapped it Thursday and bounced, then showed a nice tight doji with tail over that level Friday. Just going to let it show us the bounce higher and that is when we move in.
Volume: 1.474M Avg Volume: 1.115M
BUY POINT: $80.11 Volume=1.4M Target=$98.88 Stop=$76.94
POSITION: SID CP - Mar. $80c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/sid.html
Play Date: 12/05/2007
WFT (Weatherford International--$64.62; +0.72; optionable): Oil and gas equipment services
http://biz.yahoo.com/p/w/wft.html
EARNINGS: Third week of January 2008
STATUS: Breakout test. Nice doji with tail at the 50 day EMA (63.68), tapping that level and then moving higher Tuesday. Strong volume as it tested and rebounded. Looks ready to move after the shakeout. To recap: Nice lateral consolidation down to the 50 day EMA the past two weeks 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: 5.349M Avg Volume: 4.073M
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 LEADER PLAYS:
Play Date: 12/17/2007
MOS (Mosaic Company--$83.15; -1.34; optionable): Agricultural chemicals
http://biz.yahoo.com/p/m/mos.html
EARNINGS: 1-9-07
STATUS: Flying plateau. Reached all the way down to the 18 day EMA (77) on the low and then rebounded to hold its lateral range. Volume remained strong as it rallied back up, showing the buyers were staying with it, using the weakness to move in. Still waiting for the break higher from this range to initiate positions. To recap: Big run in this year, but a nice rest in November during the market selling. It came back to test the 50 day EMA (now at 68) after a late August breakout and run up the 10 and 18 day EMA. It surged back up to end November and start December. During the market selling of the past week it has worked laterally, refusing to give up ground as it waits for the 10 day EMA (80.19) to rise to meet it. Nice solid above average volume Monday as MOS moved higher toward the top of its range. Looking to move in as it makes the break higher from this nice show of strength. Top stock in a top sector.
Volume: 4.467M Avg Volume: 3.661M
BUY POINT: $85.48 Volume=5M Target=$99.95 Stop=$81.65
POSITION: MOS CQ - Mar. $85c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/mos.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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