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Begin part 3 of 3
THE PLAYS: Some of those solid leaders setting up good bases and some stocks we already have positions in as we stick with winners in position to move higher again.
New Post-Split Plays:
Play Date: 02/16/2008
CTRP (Ctrip.com International--$51.71; +2.21; optionable): Chinese travel
http://biz.yahoo.com/p/c/ctrp.html
EARNINGS: 2-27-08
STATUS: Double bottom w/handle Up and down the past month along with many stocks, but setting up a double bottom after a 2 month pullback. Made a higher low in early February then a break higher Tuesday on strong, above average volume. It worked laterally a bit more and then broke higher through the 50 day EMA (51.22) Friday. Big 2007 winner that needed a break, and this has given it that breather to set up the foundation for a new run. Ready to move in if CTRP can continue the break higher on stronger volume.
Volume: 871.345K Avg Volume: 819.883K
BUY POINT: $52.65 Volume=1.2M Target=$62.95 Stop=$49.11
POSITION: QCT FJ - June $50c (63 delta) &/or Stock
http://www.investmenthouse.com/ci/ctrp.html
Play Date: 02/16/2008
HES (Hess Corp.--$90.65; -0.55; optionable): Oil and gas refining/marketing
http://biz.yahoo.com/p/h/hes.html
EARNINGS: Announce 1-30-08
STATUS: Double bottom w/handle. Huge surge in December capped out HES' move for the year, and then it slipped into the current 7 week base over the 50 day EMA, similar to the one from October to November that set up that prior run. Nice handle last week and HES is set up to make the breakout and run to the prior high at 105.
Volume: 4.085M Avg Volume: 4.828M
BUY POINT: $93.55 Volume=7M Target=$105.45 Stop=$88.65
POSITION: IGG ER - May $90c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/hes.html
New Leader Plays:
Play Date: 02/16/2008
GIGM (Gigamedia--$19.99; -0.08; optionable): Online gaming software
http://biz.yahoo.com/p/g/gigm.html
STATUS: Double bottom w/handle. Nice 15 week base has set up the breakout, laying the foundation for a new run after GIGM's strong rally from August to November. Spent the last week working laterally over the 90 day SMA after a high volume jump to start the week. May take a few more sessions to finish the base, but setting up well with money flow leading higher.
Volume: 547.876K Avg Volume: 1.054M
BUY POINT: $20.78 Volume=1.6M Target=$24.95 Stop=$19.33
POSITION: GBU GD - July $20c (61 delta) &/or Stock
http://www.investmenthouse.com/ci/gigm.html
Some new buy points on current positions ready to move higher again.
Play Date: 02/16/2008
CCC (Calgon Carbon--$17.74; +0.27; optionable): Air and water purification systems
http://biz.yahoo.com/p/c/ccc.html
STATUS: Breakout test. Excellent surge out of a 9 week reverse head and shoulders base last Monday. Nice breakout then a quick test Thursday and Friday of the 10 day EMA (17.10), tapping that level on the Friday low and bouncing to close positive. Ready to move in as CCC resumes its breakout move.
Volume: 579.02K Avg Volume: 646.878K
BUY POINT: $17.91 Volume=700K Target=$21.45 Stop=$16.97
POSITION: CCC GW - July $17.50c (64 delta) &/or Stock
http://www.investmenthouse.com/ci/ccc.html
Play Date: 02/16/2008
ILMN (Illumina--$71.95; +1.10; optionable): Biotech
http://biz.yahoo.com/p/i/ilmn.html
EARNINGS: Announced 2-4-08
STATUS: Breakout test. Nice break higher last week, then tapping the 10 day EMA on the Friday low before bouncing up for a solid gain on the session. Volume moved up above average; as the market volume was lower this shows some real interest. Ready to move in as it continues higher.
Volume: 1.688M Avg Volume: 1.288M
BUY POINT: $72.32 Volume=1.8M Target=$82.95 Stop=$69.11
POSITION: IQA FN - June $70c (62 delta) &/or Stock
http://www.investmenthouse.com/ci/ilmn.html
New Downside Plays:
Play Date: 02/16/2008
LTD (The Limited--$17.55; +0.27; optionable): Apparel stores
http://biz.yahoo.com/p/l/ltd.html
EARNINGS: 2-27-08
STATUS: Put. In a steady downtrend since the April and July double top. It sold hard to begin January and then recovered the past month. If tried to hold the line at the 50 day EMA (18.11) but then broke lower Thursday. It bounced modestly Friday and may bounce up again to test the resistance near 18. Looking to pick it up as it comes back down off of that test. A move to the target lands a 42%ish gain.
Volume: 3.781M Avg Volume: 5.924M
BUY POINT: $17.68 Volume=6M Target=$16.05 Stop=$18.16
POSITION: LTD QW - May 17.50p (-50 delta)
http://www.investmenthouse.com/ci/ltd.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.
ATW: Forecast late February or first week of March. Nice break higher on volume.
BUCY: Coming back to test and we will see if it gives a good buy point out of it.
BVN: Forecast 2-28-08
CEDC: Researching date
CLF: Researching date
CPRT: Forecast first week of March
EOG: No split announcement but a great break higher and it is now testing that break, setting up the next entry point as it tests the 10 day EMA.
GG: Forecast 2-21-08
ISRG: Wildcard. Researching date.
JEC: Researching date
JOYG: Early March
MA: Forecast late April
MM: Researching date.
OTEX: No announcement 2-7-08. Made the break higher and is now pausing a bit after the surge.
UPL: Forecast second week of February. Still moving higher though no split announcement yet.
NEW PRE-ANNOUNCEMENT PLAYS
New buy point on current positions:
Play Date: 02/16/2008
OTEX (Open Text--$33.94; -0.56; optionable)
http://biz.yahoo.com/p/o/otex.html
EARNINGS: Announced 2-7-08
STATUS: Cup w/handle. Nice break higher lat week on strong volume as OTEX moved off the 50 day EMA. It then started testing to end the week, setting up a new handle to its 14 week base (handle or test, very similar in this pattern). Likely to come back to the 10 day EMA (33) before it makes its bounce, but want to be ready.
Volume: 823.422K Avg Volume: 687.713K
BUY POINT: $34.31 Volume=1M Target=$39.95 Stop=$32.91
POSITION: QFT EG - May $35c (53 delta) &/or Stock
http://www.investmenthouse.com/ci/otex.html
Play Date: 02/16/2008
POT (Potash--$147.88; -0.61; optionable): Fertilizer
http://biz.yahoo.com/p/p/pot.html
EARNINGS: Announced 1-24-08
STATUS: Reverse head and shoulders. POT gapped higher Tuesday, continuing a nice strong move off the 50 day EMA where it formed the right shoulder to its 6 week base. It broke out Tuesday and then came back to test, tapping the 10 day EMA (144.22) and then rebounding to close basically flat. Looking for a breakout move after this test to give us a new buy point.
Volume: 4.521M Avg Volume: 5.576M
BUY POINT: $150.72 Volume=7.8M Target=$172.95 Stop=$146.88
POSITION: PYP FJ - June $150c (56 delta)
http://www.investmenthouse.com/cs/pot.html
CONTINUING PRE-ANNOUNCEMENT PLAYS
Play Date: 02/14/2008
STLD (Steel Dynamics--$54.38; -0.75; optionable): Steel and iron
http://biz.yahoo.com/p/s/stld.html
EARNINGS: Announced 1-28-08
STATUS: Double bottom. After a solid move higher through Thursday, STLD paused Friday. It is still in good shape to continue higher but need to see volume on the move. To recap: STLD just cleared the 'hump' in its 7 week base that formed using the 200 day SMA (47.57) on the lows as support. No blowout volume, just solid trade moving it higher. It may be ready to pause and test that move over 54 before it moves higher, and that would give us a great entry point. On a continued move up from here, however, we will look at starting some positions and then picking up some more on the test.
Volume: 1.743M Avg Volume: 2.108M
BUY POINT: $55.97 Volume=3M Target=$65.95 Stop=$52.89
POSITION: RQL EK - May $55c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/stld.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 02/14/2008
GES (Guess? Inc.--$40.30; +0.76; optionable): Apparel
http://biz.yahoo.com/p/g/ges.html
EARNINGS: 3-19-08
STATUS: Test 50 day EMA. Starting to come off the 50 day EMA though no volume Friday as it hit the buy point late in the session. If it picks up some more volume as it continues it is a buy. To recap: After peaking in October GES trended lower into the January low and reversal. It recovered and formed a 5 week reverse head and shoulders patter at the bottom of the downtrend. It surged higher Monday and Tuesday, clearing the base and the 50 day EMA (38.95) resistance as well. Came back Wednesday and Thursday to test, coming back toward the 50 day EMA on very low, below average volume. Looking for it to complete the test of the 50 day EMA support and then after that pick it up as it rebounds on rising trade. That rising trade shows us the buyers are back in and ready to push it higher in its base.
Volume: 1.014M Avg Volume: 2.019M
BUY POINT: $40.21 Volume=3M Target=$45.25 Stop=$38.89
POSITION: GES FH - June $40c (61 delta) &/or Stock
http://www.investmenthouse.com/cs/ges.html
Play Date: 02/12/2008
VIP (Vimple Communication--$36.78; +1.25; optionable): Russian wireless telecom
http://biz.yahoo.com/p/v/vip.html
EARNINGS: Late February
STATUS: Double bottom. Found support at the 90 day SMA to end the week and is in excellent shape to make the break higher. To recap: Strong volume Tuesday as VIP gapped higher, clearing the 50 day EMA (35.67) on the move but stalling after tapping the 50 day SMA on the high (37.50). After a strong run from August it has fallen into the current 7 week base, setting up for the next run higher. Tuesday it just cleared the 'hump' in the pattern. Looking to move in as it continues the move higher.
Volume: 2.358M Avg Volume: 3.911M
BUY POINT: $37.68 Volume=6M Target=$44.95 Stop=$35.45
POSITION: VIQ GG - July $35c (64 delta) &/or Stock
http://www.investmenthouse.com/cs/vip.html
CONTINUING DOWNSIDE PLAYS:
Play Date: 02/14/2008
INTC (Intel--$20.11; -0.35; optionable): Semiconductors
http://biz.yahoo.com/p/i/intc.html
EARNINGS: announced 1-15-08
STATUS: Put. Gapped lower Friday and tried to bounce back so we held off. If it continues lower this week it is still a nice downside buy. To recap: INTC has been a disaster since peaking in December, then gapping lower in early January and again in mid-January on its earnings. It recovered to early February, sold, then recovered again to the 18 day EMA. It started to roll over again Thursday, breaking down through the 10 day EMA (20.66) on rising though still below average volume. Typically you get three to four gaps lower in a serious downtrend, and it looks as if INTC is setting up for another gap lower. A move to the target lands a 48% gain.
Volume: 78.266M Avg Volume: 76.323M
BUY POINT: New: On a continued move lower (orig. $20.32) Volume=85M Target=$18.75 Stop=$20.98
POSITION: NQ PU - Apr. $21p (-51 delta)
http://www.investmenthouse.com/cs/intc.html
Play Date: 02/14/2008
IWM (Ishares Russell 2000--$69.87; -0.31; optionable)
http://biz.yahoo.com/p/i/iwm.html
STATUS: Put. Gapped lower, sold off, then recovered for a more modest loss. If it continues lower in an overall weak market it is still a downside buy. To recap: IWM rallied back up to the 50 day EMA (72.33) Wednesday and gapped to that level Thursday. Then just as in early February IWM rolled over and started to sell. Volume was still low, but this has the look of a rollover to take it down past the February lows just over 68. A move to the target lands a 45%ish gain.
Volume: 64.549M Avg Volume: 99.065M
BUY POINT: $69.88 Volume=98M Target=$67.35 Stop=$71.11
POSITION: DIW OR - Mar. $70p (-45 delta)
http://www.investmenthouse.com/cs/iwm.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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