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Begin part 3 of 3
THE PLAYS
New Pre-Announcement plays contained in that section.
Post-Split Plays:
Play Date: 06/17/2008
GPN (Global Payments--$48.59; +1.81; optionable): Payment systems
http://biz.yahoo.com/p/g/gpn.html
EARNINGS: Late June but no definite date yet
STATUS: Cup. GPN was a stock we played often from 2003 to 2005 as it was in a tremendous uptrend. Such a run necessitates quite a base and for the past 2.5 years GPN has traded in a large, ranging cup base. The past 8 months it has formed a base within that larger pattern, breaking higher to start June, clearing got a new 1.5 year high. It faded back to test, held support at 46, and then started back up this week with a strong Tuesday move on average trade. Nice break higher and looking to move in as GPN continues higher on solid trade. Very nice set up to make a new breakout and run toward a new high.
Volume: 482.253K Avg Volume: 549.242K
BUY POINT: $49.15 Volume=750K Target=$56.75 Stop=$47.05
POSITION: GPN HI - Aug. $45c (65 delta) &/or Stock
http://www.investmenthouse.com/ci/gpn.html
Play Date: 06/17/2008
MTL (Mechel Steel Group--$53.29; +1.97; optionable): Steel and iron
http://biz.yahoo.com/p/m/mtl.html
EARNINGS: Announced 5-29-08
STATUS: Test 50 day EMA. MTL is making a steady run up the 50 day EMA (50.37) and it has come back to test that level after a nice run to end May. Lower volume on the most of the downside sessions, particularly of late. It bottomed then bounced higher Tuesday, moving up on slightly higher volume. Looking for some better trade as MTL continues the move higher off of this key support level.
Volume: 2.741M Avg Volume: 3.709M
BUY POINT: $54.55 Volume=4.2M Target=$65.55 Stop=$51.77
POSITION: MTL JK - Oct. $55c (51 delta) &/or Stock
http://www.investmenthouse.com/cs/mtl.html
Play Date: 06/17/2008
SU (Suncor Energy--$64.22; +1.17; optionable): Tar sands
http://biz.yahoo.com/p/s/su.html
EARNINGS: 7-24-08
STATUS: Test 50 day EMA. SU broke out from a 24 week reverse head and shoulders base in late April and then surged from 55 to 74 in May during that oil spike. As oil has turned more volatile, SU sold back to key support at the 50 day EMA (62.52). Volume was lower and below average the whole move back down. No dumping, just a lack of bids as oil remained choppy. It has made the test of key support, and as noted before, this is where the big boys come in to support their favorite stocks or they let it go. It will tell the tale for us. A big break higher on strong volume is a buy.
Volume: 4.865M Avg Volume: 5.732M
BUY POINT: $65.88 Volume=6.2M Target=$78.95 Stop=$62.34
POSITION: SU IM - Sept. $65c (50 delta) &/or Stock
http://www.investmenthouse.com/ci/su.html
Play Date: 06/17/2008
WGOV (Woodward Governor--$39.24; -0.48; optionable): Industrial electrical equipment
http://biz.yahoo.com/p/w/wgov.html
EARNINGS: Third week of July
STATUS: Test 18 day EMA. WGOV broke out from a nicely formed double bottom with handle in mid-May, gapping higher on strong volume. It surged just over 42 and peaked. Spent the past four weeks working laterally over the 18 day EMA (38.64). Now making a higher low after the consolidation, and that typically precedes the next upside move. Very solid, very well set up.
Volume: 438.715K Avg Volume: 638.808K
BUY POINT: $40.55 Volume=950K Target=$48.45 Stop=$38.44
POSITION: GUP JH - Oct. $40c (46 delta) &/or Stock
http://www.investmenthouse.com/ci/wgov.html
Downside:
Play Date: 06/17/2008
MS (Morgan Stanley--$40.59; -1.70; optionable): Investment brokerage
http://biz.yahoo.com/p/m/ms.html
EARNINGS: 7-18-08
STATUS: Put. Announces earnings Wednesday, and as GS announced good results but couldn't make anything of it we are looking for MS to continue lower. It has formed a 12 week broad top, breaking lower two weeks back. It rebounded near the 50 day EMA (44.02) and then reversed on high volume Tuesday. Looking to move in as MS continues lower. A move to the target lands a 49%ish move.
Volume: 26.002M Avg Volume: 16.592M
BUY POINT: $40.22 Volume=17M Target=$37.15 Stop=$42.55
POSITION: MS SO - July $41p (-45 delta)
http://www.investmenthouse.com/ci/ms.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: Rebounding nicely as the rumors of Steve Jobs' illness were greatly exagerated
ACS: Researching date
APD: Tentatively set for third week of July
ATW: Researching date
BHI: Tentatively set for late July
CLB: A wildcard with no splits. Tentatively set for July
COP: Forecast July
CW: Tentatively set for third week of July
ETN: Researching date
GGB: Researching date. Starting to break higher once more
GILD: Researching date. Testing the 50 day EMA.
HES: Forecast July
IBM: Trying to come off a 50 day EMA test.
JEC: Mid-July. Trying to bounce off the 50 day EMA test.
JOYG: Testing the 18 day EMA after its last run
MICC: Forecast third week of July
MTRX: Forecast early July
PX: Late July
RS: Mid-July
SCHN: Researching date
TMO: Tentatively set for July
VMI: Mid-July
WDR: Researching date
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 06/09/2008
BHI (Baker Hughes--$86.68; +0.89; optionable): Oil and gas service
http://biz.yahoo.com/p/b/bhi.html
EARNINGS: 7-22-08
STATUS: reverse head and shoulders. Holding support at 85, bouncing off that level for a gain Tuesday. Still in a good position to run higher and just waiting for the move. To recap: BHI broke higher in mid-May, clearing the neckline at 85 in its 8 month base. It has moved laterally in a 5 point range following the initial breakout move. It is making a higher low at the 10 day EMA (87.35), bumping at the breakout point from its short consolidation range. Looking for a bit more trade as it makes the break higher.
Volume: 3.104M Avg Volume: 4.372M
BUY POINT: Aggressive: $87.77. Breakout: $90.48 Volume=6.5M Target=$104.95 Stop=$87.22
POSITION: BHI JR - Oct. $90c (48 delta) &/or Stock
http://www.investmenthouse.com/ci/bhi.html
Play Date: 06/16/2008
TTEK (Tetra Tech--$26.85; +0.29; optionable): Engineering & construction consulting services
http://biz.yahoo.com/p/t/ttek.html
EARNINGS: Late July
STATUS: Test 18 day EMA. Moved higher Tuesday but on no trade and Monday volume was not solid enough to ride on through today and make a purchase. Still in good shape to make a break higher; just want to see more volume as it does. To recap: Made us a bit of money on its last run in May after the breakout from its 6 month base. It gapped higher to start May, tested, and then started a run up the 10 day EMA (now at 25.93). After that run it has made a deeper test to the 18 day EMA (25.64). Undercut it but then bounced back, jumping Monday on rising, average volume, the best of the month. Solid money flow is rising ahead of price and TTEK looks ready to make a break to a new high. Want to see volume continue improving as it does.
Volume: 439.182K Avg Volume: 591.92K
BUY POINT: $27.05 Volume=700K Target=$32.45 Stop=$25.55
POSITION: TQI IE - Sept. $25c (64 delta) &/or Stock
http://www.investmenthouse.com/ci/ttek.html
CONTINUING POST SPLIT PLAYS:
Play Date: 06/14/2008
MDR (McDermott Intl.--$63.63; +0.39; optionable): Heavy construction
http://biz.yahoo.com/p/m/mdr.html
EARNINGS: Announced 5-12-08
STATUS: Test breakout. Gapped higher Tuesday but could not hold much of the move as volume was very low. Still looking for the next break higher on some better trade to give us the buy. To recap: Got out of MDR last week in the market selling, not wanting to take chances, but MDR checked up at the 18 day EMA (61.66), bouncing back to hold that level on the close. Friday it bounced up off that near support though volume remained very low, the lowest of the month. Solid 5 month ascending base, good breakout on strong volume. Looking for a bit more trade as it moves higher off the test of that near support.
Volume: 1.321M Avg Volume: 2.419M
BUY POINT: New: Continued move higher (orig. $63.08) Volume=2.8M Target=$72.95 Stop=$60.77
POSITION: MDR HL - Aug. $60c (69 delta) &/or Stock
http://www.investmenthouse.com/ci/mdr.html
CONTINUING LEADER PLAYS:
Play Date: 06/16/2008
CE (Celanese--$49.87; +0.23; optionable): Chemicals
http://biz.yahoo.com/p/c/ce.html
EARNINGS: Third week of July
STATUS: Flying plateau. Surged again Tuesday but gave back just about all of the gain. While it could not hold the gains, it was still a good Monday break higher and we are looking for the buy as it continues higher. To recap: Taking another run at CE as it starts the breakout from its 5 week tight lateral consolidation that consolidated the April breakout from its 4.5 month base. Volume rallied on upside trade three sessions in the past week, the last on Monday as CE made the breakout move. Strong money flow is leading the way higher and CE is following. Looking to move in as CE continues the breakout move. Very nice, very sold.
Volume: 1.725M Avg Volume: 1.369M
BUY POINT: $50.08 Volume=2M Target=$57.75 Stop=$47.77
POSITION: CE IJ - Sept. $50c (49 delta) &/or Stock
http://www.investmenthouse.com/ci/ce.html
Play Date: 06/14/2008
NSM (National Semiconductor--$23.14; -0.46; optionable): Semiconductors
http://biz.yahoo.com/p/n/nsm.html
EARNINGS: Announced 6-5-08
STATUS: Test breakout. Faded back toward the 10 day EMA (22.92) on lower volume. Looks like a pause before continuing the break higher. Good test to regroup and set the stage to continue higher. To recap: NSM broke sharply higher to start June, then gapped higher on its earnings, clearing a 4 week handle to its 12 month base. Strong break higher then used the market selling last week to test the break higher and fill the gap, holding the 10 day EMA (22.71) on the low then bouncing Friday to start the next move up. No volume that session, but no issue with that; it was a Friday in the summer. Looking for a bit more trade this week, however, as it continues the move, and with that we are in.
Volume: 5.448M Avg Volume: 6.721M
BUY POINT: $23.89 Volume=7M Target=$27.95 Stop=$22.57
POSITION: NSM HX - Aug. $22.50c (63 delta) &/or Stock
http://www.investmenthouse.com/cs/nsm.html
Downside:
Play Date: 06/16/2008
EDU (New Oriental Education & Tech--$64.33; +0.75; optionable): Chinese management training
http://biz.yahoo.com/p/e/edu.html
EARNINGS: Mid-July
STATUS: Head and shoulders. Bounced up for one more test of the 10 day EMA (65.32) and then faded to cut its gains. Very low volume. Still looks ready to turn lower from here. To recap: EDU formed a 10 week head and shoulders top, making a lower high to start June in a weaker right shoulder, indicating a deeper decline than normal. It sold off last week and rebounded through Friday on light trade. It made it to the 10 day EMA (65.54), stalling at that near resistance and turning lower Monday. Money flow is very weak and EDU looks ready to follow it lower. A move to the target lands a 48%ish gain.
Volume: 334.322K Avg Volume: 646.039K
BUY POINT: $62.97 Volume=700K Target=$58.00 Stop=$65.65
POSITION: EDU SM - July $65p (-50 delta)
http://www.investmenthouse.com/ci/edu.html
Play Date: 06/14/2008
PCU (Southern Copper--$104.11; -0.73; optionable): Copper
http://biz.yahoo.com/p/p/pcu.html
EARNINGS: Late July
STATUS: Put. Rallied to tap the 18 day EMA (107) on the Tuesday high once again and then turned over for a loss on flat, below average volume. Nice tap and set up to continue the move lower. To recap: Not all commodities are working positively. PCU has formed a broad top the past 9 weeks, failing an attempt to move back through the 200 day SMA near 112 after breaking it in late May and bumbling around in an attempt to get back through. Last week was tough as it sold down to 100 and then bounced Friday, but doing so on lower, below average volume. May come back up a bit more to the 10 day EMA (106.42); if it does that gives us an even better downside play. It closed well off its Friday intraday high, however, so it may just continue on to the downside. If it does we are willing to move in there as well. A move to the target lands a 42%ish gain.
Volume: 1.601M Avg Volume: 1.855M
BUY POINT: $103.48 Volume=2M Target=$97.38 Stop=$105.91
POSITION: PCU SA - July $105p (-50 delta)
http://www.investmenthouse.com/ci/pcu.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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