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Weekend Newsletter for
June 22, 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
Tech leadership here today, gone tomorrow.
- Expiration, even more financial issues pile drive NYSE large caps.
- Market pricing in worse economic times to come.
- Looking for what rises from the rubble of expiration.
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Market Summary (continued)
Thursday the large cap techs were hot with the likes of RIMM and QCOM leading the way upside, putting some starch in a wilting market. SP500 held its trendline and volume was solid on NASDAQ as some big names made some nice moves.
Friday the market didn't even try to extend the Thursday gains. There was a turn back to gloom on simply too much bad news, led by financial issues, and yes, of course more oil problems. MER downgraded regional banks, making official what many are suspecting and indeed what a few of the early warnings were showing. Then in a typical turn of market irony, MER was subject to its own issues as rumors circulated it would be announcing lower earnings, write-downs, etc. MER issued a statement that it would not be announcing that kind of news . . . on Friday. What a confidence booster for the market.
Oil was its usual problem, spiking pre-market as news hit Israel had made a dry run of an attack of Iran's nuclear facilities. It was up 4 clicks though it finished the session lower at 134.62, +2.69. Financial issues and oil rebounding hard after selling hard. That set the market up for weakness, and expiration only magnified the selling.
There were some positives. Saudi Arabia said it was going to raise the level of its production increase to 500M per day versus 200M per day. Impressive given most theorize that Saudi doesn't have the capacity to do so. Sure it will be heavy, sulfur-riddled sludge, but the numbers are impressive. In addition, NYSE short interest was reported at its highest level ever. That doesn't sound like a positive and indeed some of the financial stations reported it as a bad sign. Actually, short interest is a contrary indicator, and thus an all-time high always gets you looking at other sentiment indicators to see if they are reaching extreme levels. Bullish advisors and bearish advisors crossed paths last week and that is a strong indicator. They are getting there. More work to do, but they are getting there.
Read "The Daily" Entire Weekend Summary
Here's a trade from "The Daily" and insights into our trading strategy:
Company Profile
EARNINGS: Late July
STATUS: Test 50 day EMA. TRMB was added to the SP400 at the Friday close and thus the surging volume. This is not just an index play. TRMB was a favorite play in 2007 as it ran higher. It got too high and needed to consolidate and base out for another run. It has done that with the current 8 month base. Good earnings numbers in April started it higher off the bottom of the pattern, and now TRMB is testing the 50 day EMA (34.82), showing good price action at that level. Looking for TRMB to give us a nice breakout from this pattern to give us the entry point.
Volume: 14.415M Avg Volume: 1.359M
BUY POINT: $37.08 Volume=2M Target=$42.95 Stop=$34.74
POSITION: TUH KG - Nov. $35c (66 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).
We play pre-split plays as short-term plays. We get in when the technical indicators show us things look right, grab as much as we can, and get out, always being conscious of resistance and support. These stocks are highly volatile at this time, and can turn on you quickly. Don't let good profits disappear. Watch for turns, especially when a stock trades in a wide range and finishes off its high. That is a sign these stocks often give you that they are running out of steam. We usually get out and ask questions later. We can always get back in. We like to play in the money calls, preferably two strike prices in the money as this usually gives us a greater delta (the percent an option will move versus the stock's movement). We prefer deltas of 75 or better. This means if the stock moves 1 point, the option should move three-fourths of that point. That means up or down.
Remember, wait to see the stock start to move up. Don't just blindly make a play and don't try to guess tops and bottoms. We can look at indicators to give us a clue as to what will happen, but we need the stock to confirm it for us.
Listen to Stock Split Report Editor Jon Johnson's
stock split interview on CNBC-TV [ Broadband | Dial-up ]
Here's a pre-split play and our current analysis.
Company Profile
EARNINGS: Second week of August
STATUS: Flat base. FLR gapped higher mid-May on its earnings report, clearing a 6.5 month base. In the market selling it has come back to test that gap though not filling it all on last week's lows. Has rebounded and is in excellent position to give us a nice new breakout and entry point.
Volume: 1.373M Avg Volume: 1.674M
BUY POINT: $193.21 Volume=2.5M Target=$219.95 Stop=$187.45
POSITION: FLR HW - Aug. $190c (51 delta) or FLR JX - Oct. $195c (48 delta)
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
EARNINGS: Third week July
STATUS: Test 10 day EMA. BTU broke higher Wednesday, clearing a 6 week base formed along the 18 day EMA (77.88). Broke out from a larger 4 month base in April and this short base consolidated that run higher. After the Wednesday breakout BTU came back Thursday and Friday to the 10 day EMA (79.40) in the market selling. Looking for it to hold this near support and then make the next break higher as it continues its run.
Volume: 5.581M Avg Volume: 6.181M
BUY POINT: $81.45 Volume=8M Target=$92.95 Stop=$77.69
POSITION: BTU IP - Sept. $80c (58 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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