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us stock market, trend trading stock
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INVESTMENT HOUSE.COMTM |
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Weekend Newsletter for
February 17, 2008
Table Of Contents 1) MARKET SUMMARY 2) STOCK SPLIT PLAY 3) TECHNICAL PLAY 4) COVERED CALL PLAY |
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| | Stock Split Notices Investing Q & As Glossary |
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1) MARKET SUMMARY
> >From "The Daily" at InvestmentHouse.com
So much for fireworks.
- Market slips out of expiration quietly, fighting off bad news all week.
- Best Buy warns of a slow 2008.
- New York manufacturing report dives.
- Michigan sentiment falls sharply.
- Despite negative economic headlines, more and more solid stocks are setting up good bases.
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Market Summary (continued)
After a quiet expiration week through Thursday we were expecting some volatility and volume Friday. The volatility was limited to two big runs for the day, down into lunch, up into the close. Volume was limited; not to any part of the session, just limited. The whole week showed limited volume. Some minor distribution, some minor accumulation, nothing major as it was below average all week.
The Friday session started down and had a hard time getting up with the news. BBY warned of a slower 2008. The New York PMI dove lower; at -11.72 it was well below the 7 expected and the 9.0 in January. Not a lot of positive sentiment in the manufacturing sector right now. It could be any number of reasons from the credit and mortgage issues to the rhetoric on the campaign trail, but the net result is a bleaker outlook from the purchasing managers. Then Michigan sentiment rolled out at 69.6, down from 78.4. Those are recession levels last hit in February 1992 and well below the rather high 81.8 level in the 2001 recession. The negative reading puts Michigan sentiment down 23% from August when the credit issues spurred the Fed to act. Pretty negative scenario.
The market sold off ahead of and after this news. Then it bottomed and rallied back to the close. Only SP500 made it positive, but the other indices were within spitting distance after coming back from substantial though not huge losses as seen the prior week. Some down, some up, then closing basically flat on the session and holding onto some of last week's gains.
Read "The Daily" Entire Weekend Summary
Here's a trade from "The Daily" and insights into our trading strategy:
Company Profile
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
Learn more about "The Daily" with Stock Picks! - Issued 5 Times Per Week
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2) Stock Splits Playing stock splits can be very profitable, but it takes know-how. Our stock split service focuses on three main types of plays: 1) pre-announcement (where we forecast an upcoming split prior to the company making the announcement); 2) pre-split (these plays are made in the days leading up to the actual split day); and 3) post-split plays (plays made after the actual stock split where the stock is showing continued or renewed strength).
For post-splits, we can play them as we would pre-splits (very short term), but we prefer to stretch our horizons, playing the trend. When playing options, we look further out, 2 or more months at least. We let the trend carry us along if there is one, but we will also take profits if the technical pattern degenerates, e.g., breaks a trendline. The main difference between post-splits and pre-splits plays is that we really have to like the pattern. Pre-splits can run right before their splits even with poor technical indicators. For post-splits, we are looking at the stocks from more of a longer term "would I buy this stock at this juncture?" position. Now there are times when a hot stock splits and investors pile in to get in while the stock is 'cheaper.' We play those, but with more of a short-term, pre-splits mentality in that we will be ready to get out fast if the momentum fades.
Remember, everything we do has to pass muster with the market that day ... don't fight the market on these plays.
Listen to Stock Split Report Editor Jon Johnson's
stock split interview on CNBC-TV [ Broadband | Dial-up ]
Here's a post-split play and our current analysis.
Company Profile
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
Learn more about our Stock Split Report and how we have made gains of 321% with our powerful stock split plays!
Details Here. |
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3) TECHNICAL PLAY Company Profile
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
Learn more about our Technical Traders Report - Issued 5 Times Per Week |
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4) COVERED CALL PLAY Company Profile
Learn more about our Covered Call Tables - 8 Tables Updated 5 Times Per Week |
PREMIUM SERVICES
IH Alerts: InvestmentHouse.com's Best of The Best Plays!
Stock Split Report: Forbes.com Best of the Web
Covered Calls: 8 Tables with nightly updates - energize your portfolio!
Tech Traders: Breakouts, wedges, etc...focusing on stocks ready to move now!
The Daily: "The Daily" is a must read for all investors!
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The foregoing is commentary for informational purposes only. All statements and expressions are the opinions of Online Investment Services, LP., or Split Ventures, Ltd. This information is 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 the related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolios of writers for this issue may, in some instances, include securities mentioned herein and on the related 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. No one associated herewith receives compensation in any manner from any of the companies that are discussed in this newsletter or on the related websites.
This email was sent to ~~EMAIL~~.
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