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us stock market, trade stock
Begin part 3 of 3
THE PLAYS:
New Leader Play:
Play Date: 02/23/2008
TRA (Terra Industries--$47.75; -0.40; optionable): Agricultural chemicals
http://biz.yahoo.com/p/t/tra.html
EARNINGS: Announced 2-7-08
STATUS: Double bottom w/handle. After a breakout and run higher starting last October, TRA has formed the current 8 week pattern in the market up and down selling, using the 90 day SMA as support for the two bottoms. Nice surge on volume this month, particularly the start of last week, and then a nice lower, below average volume test of the 10 day EMA to end the week. Indeed, Friday it tapped the 10 day on the low (46.40) and rebounded for a modest lost. May take another day or two to finish the handle, but like this set up from this solid leader in a solid sector.
Volume: 3.487M Avg Volume: 3.829M
BUY POINT: $50.65 Volume=5.7M Target=$60.85 Stop=$47.10
POSITION: TRA FJ - June $50c (52 delta) &/or Stock
http://www.investmenthouse.com/ci/tra.html
New Downside Plays:
Play Date: 02/23/2008
ALB (Albemarle Corp.--$38.20; -1.05; optionable): Chemicals
http://biz.yahoo.com/p/a/alb.html
EARNINGS: Announced 1-28-08
STATUS: Put. ALB has just formed the right shoulder to a large 8 month head and shoulders top. It plunged lower in January, recovering off that low and into this month, coming up just under the 200 day SMA (40.86) the past week. It never made it that high before rolling over. Friday it undercut the 50 day EMA (39.06) on the strongest volume in two weeks. It managed to bounce off some support at 38. Looking for it to undercut that again on continued solid trade to give us the entry point. A move to the target lands us a 44%ish gain.
Volume: 1.584M Avg Volume: 1.122M
BUY POINT: $37.74 Volume=1.2M Target=$34.72 Stop=$38.69
POSITION: ALB PH - Apr. $40p (-50 delta)
http://www.investmenthouse.com/ci/alb.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.
BUCY: Running out of gas some at the old high but a nice break higher this week.
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. No split announcement but running nicely
ISRG: Wildcard. Researching date.
JEC: Researching date
JOYG: Early March
MA: Forecast late April
MM: Researching date.
OTEX: No announcement 2-7-08.
STLD: Researching date
UPL: Forecast second week of February. Still moving higher though no split announcement yet.
NEW PRE-ANNOUNCEMENT PLAYS
Play Date: 02/23/2008
ADM (Archer Daniels Midland--$44.58; -0.84; optionable): Corn
http://biz.yahoo.com/p/a/adm.html
EARNINGS: 5-7-08
STATUS: Double bottom w/handle. Nice set up here as it sold back on Friday to tap at the 18 day EMA (43.83) on lower, below average volume, then bouncing modestly to hold near support. This is forming the handle to a 7 week double bottom using the 50 day EMA and the 90 day SMA on the lows as support. Part of a much larger 22 month double bottom with handle, and this pattern is the last part of that larger base. Large base, large run on the breakout. Part of the corn craze (a.k.a. ethanol insanity), so there is a continuing demand for its products. After this pullback looking for a new strong breakout to give us the entry point.
Volume: 6.133M Avg Volume: 6.679M
BUY POINT: $46.15 Volume=10M Target=$53.95 Stop=$43.94
POSITION: ADM FI - June $45c (59 delta) &/or Stock
http://www.investmenthouse.com/ci/adm.html
Play Date: 02/23/2008
EAC (Encore Acquisition--$35.51; +0.52; optionable): Independent oil and gas
http://biz.yahoo.com/p/e/eac.html
EARNINGS: Announced 2-13-08
STATUS: Double bottom w/handle. Pretty common pattern in this up and down market. Currently working on a handle to its 15 week base, tapping the 10 day EMA (34.54) on the Friday low and then bouncing positive on the close. Got a bit wild in the January selling, but that was par for the course. It recovered and rallied to the October peak at 36 and then started to form this handle. Just going to be patient and let it make the break higher and show us it is time to enter. Interestingly, this current pattern is acting as the handle to a much larger 29 month cup with handle pattern. Big base, big run.
Volume: 734.337K Avg Volume: 583.453K
BUY POINT: $36.85 Volume=875K Target=$42.95 Stop=$34.27
POSITION: EAC FG - June $35c (59 delta, 201 OI) &/or Stock
http://www.investmenthouse.com/cs/eac.html
Play Date: 02/23/2008
ECA (Encana Corp.--$70.96; +0.81; optionable): Independent oil and gas
http://biz.yahoo.com/p/e/eca.html
EARNINGS: Announced 2-14-08
STATUS: Double bottom with handle. One of the more common bases setting up in this up and down market. ECA is working on a nice tight handle to its 14 week base, using the 10 day EMA as support for the lows; it reaches down intraday to tap them then recovers to the close. Strong volume on the upside sessions shows continued accumulation. After running to a new high in early November it needed a new base to rest and set the foundation for the next run higher. This has done that with a couple of lows, the second that deep test in January. Just going to wait and let it show us the strong breakout move to give us our entry point.
Volume: 3.23M Avg Volume: 2.552M
BUY POINT: $71.84 Volume=3.8M Target=$85.95 Stop=$69.11
POSITION: ECA GN - Jujly $70c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/eca.html
Play Date: 02/23/2008
RIG (Transocean--$137.96; -0.22; optionable): Offshore oil and gas drilling services
http://biz.yahoo.com/p/r/rig.html
EARNINGS: 5-7-08
STATUS: Cup w/handle. Surged higher Wednesday on strong volume, breaking over the 'hump' in its 8 week double bottom base. It then started to test, coming back modestly Thursday and Friday, tapping at support at 135 on the Friday low before rebounding to close. Nice lower volume as it tests. May come back and snug up a bit more near 135 before continuing, but then looking for a nice strong volume as it renews its breakout.
Volume: 6.696M Avg Volume: 8.596M
BUY POINT: $140.48 Volume=11M Target=$161.85 Stop=$135.11
POSITION: RIG EH - May $140c (52 delta) &/or Stock
http://www.investmenthouse.com/ci/rig.html
Play Date: 02/23/2008
TKC (Turkcell--$24.62; +0.36; optionable): Turkish wireless telecom
http://biz.yahoo.com/p/t/tkc.html
EARNINGS: 2-27-08
STATUS: Double bottom w/handle. It has been awhile but TKC is setting up for us once more. Earnings are coming this week, and we like how TKC is setting up ahead of those. It has formed a double bottom with handle just over the 200 day SMA, using that key level as support for the two bottoms. Nice surge up to the 90 day SMA (24.87) two weeks back and then a lateral, low volume move to form the handle, shaking out some more sellers. Big volume spike Thursday; that is a 'get ready' spike, telling us to prepare for the breakout. Want to see it make the move to start the play, but if it has not before earnings we will take a chance with some positions on Tuesday 2-27.
Volume: 825.862K Avg Volume: 1.474M
BUY POINT: $25.04 Volume=2.2M Target=$29.95 Stop=$23.45
POSITION: TKC GE - July $25c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/tkc.html
CONTINUING PRE-ANNOUNCEMENT PLAYS
Play Date: 02/21/2008
DO (Diamond Offshore--$119.38; +1.81; optionable): Offshore drilling
http://biz.yahoo.com/p/d/do.html
EARNINGS: Announced 2-7-08
STATUS: Double bottom. Still bumping its head at the 90 day SMA (119.31) on Wednesday and ended the week the same way. Good volume leading up to this level; need to see strong trade as it moves to the buy point given those October peaks at 120. To recap: Nice trade the past two sessions as DO moved up toward the key 120 level that marks the October peaks and the late January rebound peak. It formed an 8 week double bottom using the 200 day SMA as support for both legs. It may try to form a handle here, a lateral move just below the 'hump' in the middle of the pattern, but given the volume we want to be ready to move in if it makes a clean, high volume break higher.
Volume: 2.496M Avg Volume: 2.667M
BUY POINT: $120.22 Volume=4M Target=$138.95 Stop=$117.72
POSITION: DO FD - June $120c (51 delta) &/or Stock
http://www.investmenthouse.com/ci/do.html
Play Date: 02/19/2008
MON (Monsanto--$116.67; +0.24; optionable): Ag chemicals, biotech
http://biz.yahoo.com/p/m/mon.html
EARNINGS: Announced 1-3-08
STATUS: Double bottom w/handle. Working laterally over the 10 day EMA (115.36) on below average volume. It is consolidating laterally as the market does the same, setting up the next nice break higher. Just being patient and letting it show us the move. To recap: MON continued rallying on through mid-January. It gapped on earnings but shortly thereafter it ran out of steam given the long run in 2000 preceding that move. It sold hard mid-month with the market, then held the 90 day SMA support, building the pattern using the 90 day SMA as support. Gapped higher to start last week, then moved laterally on low volume to form the handle. Gapped higher Tuesday on rising but still below average volume. Looking for a bit more trade as it continues the break higher.
Volume: 4.352M Avg Volume: 6.642M
BUY POINT: $120.21 Volume=7.5M Target=$137.95 Stop=$115.95
POSITION: MFP GD - July $120c (58 delta) &/or Stock
http://www.investmenthouse.com/ci/mon.html
Play Date: 02/22/2008
SGR (Shaw Group--$64.53; +1.48; optionable): Heavy construction services
http://biz.yahoo.com/p/s/sgr.html
EARNINGS: Announced 1-9-08
STATUS: Cup. Gapped higher Friday on strong volume, then traded up and down; down most of the session then a surge back up in the lat recovery to close at the session high. If it can continue we will step in. To recap: SGR is bouncing higher off the 200 day SMA, working on the right side of a 16 week cup base. Moved higher the past two sessions, closing over the 90 day SMA (62.52) Thursday. If it can pick up some more trade we will look at a partial position on a further move higher. Then it will likely form a handle, and when it breaks higher from that we can add positions. If it rallies up near 70 before doing so we can even take some interim gain before it forms the handle.
Volume: 2.015M Avg Volume: 1.803M
BUY POINT: On a continued move from here (orig. $63.88) Volume=2.5M Target=$74.95 Stop=$61.54
POSITION: SGR GL - July $60c (65 delta) &/or Stock
http://www.investmenthouse.com/ci/sgr.html
CONTINUING LEADER PLAYS:
Play Date: 02/16/2008
CCC (Calgon Carbon--$18.45; +1.26; optionable): Air and water purification systems
http://biz.yahoo.com/p/c/ccc.html
STATUS: Breakout test. Strong volume Friday as CCC gapped higher and added to the move. Closed off its high after matching the early February intraday highs. Still solid and on a bit further test to start next week we can add some positions. To recap: 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 (17.51), tapping that level on the Friday low and bouncing to close positive. Ready to move in as CCC resumes its breakout move.
Volume: 1.447M Avg Volume: 582.123K
BUY POINT: New: On a continuing move early this week (orig. $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
GIGM (Gigamedia--$19.67; -0.04; optionable): Online gaming software
http://biz.yahoo.com/p/g/gigm.html
STATUS: Double bottom w/handle. Still waiting for the breakout, but GIGM is looking very good as it sets up with a low volume tap at the 90 day SMA on the lows as it trades in a very narrow closing range. About as ready as it will get. Just waiting for the trigger upside. To recap: 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: 390.439K Avg Volume: 1.012M
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
CONTINUING DOWNSIDE PLAYS:
Play Date: 02/22/2008
AMZN (Amazon.com--$72.08; +2.18; optionable): online sales
http://biz.yahoo.com/p/a/amzn.html
EARNINGS: 4-23-08
STATUS: Put. Bounced back some Friday from that Thursday selloff, rising on lower but still above average volume. Looking for it to fail, perhaps after a test of the 10 day EMA (73). Moved the buy point up to accommodate this bounce. To recap: Double top spanning October to early January broke down in January, but AMZN tried to set up a bottom over 70, working in a 10 point range the past month. Thursday it turned down from near resistance at the 18 day EMA on rising, above average volume. Looking at the chart there is a big gap higher in late April 2007; it is going to fill that at some point and after this double top we think it is going to start working on that. Our initial goal is nowhere near so ambitious, but a move to that target lands a 42%ish gain.
Volume: 12.343M Avg Volume: 9.915M
BUY POINT: $71.21 Volume=10M Target=$64.55 Stop=$73.11
POSITION: AQN PN - Apr. $70p (-44 delta)
http://www.investmenthouse.com/ci/amzn.html
Play Date: 02/22/2008
XRAY (Dentsply--$39.20; -0.07; optionable): Dental instruments
http://biz.yahoo.com/p/x/xray.html
EARNINGS: Announced 2-6-08
STATUS: Put. Sold off but then rebounded with the market to close flat. No problem. We will wait until Monday, and if it starts to sell again it is a go. To recap: Failed to impress the market with its earnings. It was already down at the 200 day SMA (40.35) trying to recover from a mid-January dive lower. It recovered this key level but then slipped back through last Friday on strong volume. It worked laterally, but now it is heading back down from the December to January double top. A move to the target lands us a 52%ish gain.
Volume: 990.445K Avg Volume: 1.296M
BUY POINT: $39.04 Volume=1.4M Target=$37.00 Stop=$40.15
POSITION: XEQ PH - Apr. $40p (-51 delta)
http://www.investmenthouse.com/ci/xray.html
Play Date: 02/22/2008
ZBRA (Zebra Technologies--$29.38; -0.01; optionable): Computer peripherals
http://biz.yahoo.com/p/z/zbra.html
EARNINGS: 2-25-08
STATUS: Put. Sold off as well intraday but then rebounded to close flat. Volume moved up to just above average as it recovered, but still looking for ZBRA to fail and make the next move lower. To recap: Nasty decline in December through mid-January, then a recovery into February. It failed, however, and slide lower, trying to consolidate the past couple of weeks with the market. Thursday it started lower again though volume was low. Money flow is weak, however, and it looks as if ZBRA wants to go test its prior lows and beyond. A move to the target lands a 60%ish gain.
Volume: 623.547K Avg Volume: 545.747K
BUY POINT: $29.12 Volume=700K Target=$26.05 Stop=$30.11
POSITION: ZBQ QF - May $30p (-47 delta)
http://www.investmenthouse.com/ci/zbra.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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