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Begin part 3 of 3
THE PLAYS
New Pre-Announcement plays contained in that section.
Post-Split Play:
Play Date: 07/12/2008
GILD (Gilead Sciences--$53.70; -0.89; optionable): Biotechnology
http://biz.yahoo.com/p/g/gild.html
EARNINGS: 7-17-08
STATUS: Test 50 day EMA. GILD has been on a steady climb for literally years. It is in the process of consolidating the last March to early June run out of a 10 week double bottom. It is now working on a 6 week base, bouncing off support following an early July selloff, testing the 50 day EMA on the Friday low and rebounding. Looking for a higher low here to set up the next break higher, and of course looking for that break higher on solid trade to move in. Right sector, and a higher low at the 50 day is a good point to launch a new rally.
Volume: 9.723M Avg Volume: 6.983M
BUY POINT: $54.68 Volume=10M Target=$61.75 Stop=$52.91
POSITION: GDQ KX - Nov. $52.50c (64 delta) &/or Stock
http://www.investmenthouse.com/ci/gild.html
Play Date: 07/12/2008
HCBK (Hudson City Bancorp--$17.81; +0.33; optionable): Savings and loans
http://biz.yahoo.com/p/h/hcbk.html
EARNINGS: 7-23-08
STATUS: Double bottom w/handle. Well what do you know, a small financial in excellent position to move higher. HCBK has made us money before, going to work for us in the first quarter. After a run to 20 it is basing, forming the current 10 week double bottom with handle pattern, using the 200 day SMA (16.35) on the lows of the two bottoms as support. That is where you want to see it hold on the lows. Volume has been superb, rising on the gains, falling on the lows, particularly the past week with two big upside volume gains. Friday was a super upside move. Money flow is surging and ready to move into HCBK as it continues the move higher.
Volume: 14.005M Avg Volume: 8.446M
BUY POINT: $18.21 Volume=12M Target=$21.95 Stop=$17.21
POSITION: KHQ JW - Oct. $17.50c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/hcbk.html
Play Date: 07/12/2008
PKI (Perkinelmer--$28.27; -0.72; optionable): Medical instruments
http://biz.yahoo.com/p/p/pki.html
EARNINGS: 7-24-08
STATUS: Cup w/handle. Volatile the past 6 weeks but in the bigger picture it is holding the handle of a 10 month base, moving higher the past week toward the top of its lateral consolidation. Volume surged Thursday as PKI moved higher, but it was up also on Friday as PKI fell right back down. The pattern is set, it is in a good sector, and if it makes the move we will move in with it.
Volume: 2.189M Avg Volume: 1.152M
BUY POINT: $29.26 Volume=1.6M Target=$33.95 Stop=$27.97
POSITION: PKI IF - Sept. $30c (48 delta) &/or Stock
http://www.investmenthouse.com/ci/pki.html
LEADER PLAYS:
Play Date: 07/12/2008
SVNT (Savient Pharma--$26.87; -0.36; optionable): Biotechnology
http://biz.yahoo.com/p/s/svnt.html
EARNINGS: 8-6-08
STATUS: Ascending base. Something of a base on base pattern here with a shorter 6 week base having formed over the 50 day EMA (24.58) following the late May breakout from a 4.5 month pattern. Like the higher low made last week over the 10 day EMA (26.23), setting SVNT up for a new breakout and run off of this solid base. Like the pattern and in a great sector for the current market.
Volume: 1.898M Avg Volume: 1.658M
BUY POINT: $27.55 Volume=2M Target=$32.95 Stop=$25.72
POSITION: UVP IE - Sept. $25c (66 delta) &/or Stock
http://www.investmenthouse.com/cs/svnt.html
DOWNSIDE: Must be ready for the downside
Play Date: 07/12/2008
ECA (Encana Corp.--$82.95; +0.01; optionable): Independent oil and gas
http://biz.yahoo.com/p/e/eca.html
EARNINGS: 7-24-08
STATUS: Put. Not all oil and gas is ready to bounce. ECA gapped higher in early May then moved laterally through early July, but gapped lower through the upside gap, tried to hold the 90 day SMA (84.50), but could not hold. It rebounded Thursday and Friday, only to hit the 90 day on the Friday high and fade. This gap up followed by a gap lower is an island reversal, and it typically leads to more downside. Looking for ECA to fail below this resistance level and head toward the 200 day SMA down at 75. A move to the target lands a 42%ish gain.
Volume: 4.17M Avg Volume: 3.388M
BUY POINT: $82.66 Volume=4.5M Target=$77.55 Stop=$84.68
POSITION: ECA TQ - Aug. $85p (-50 delta)
http://www.investmenthouse.com/ci/eca.html
Play Date: 07/12/2008
XEC (Cimarex Energy--$63.28; +0.06; optionable): Independent oil and gas
http://biz.yahoo.com/p/x/xec.html
EARNINGS: 8-5-08
STATUS: Put. Very similar action to ECA, i.e. a gap higher in early May, a lateral or broad umbrella top, then a gap lower in early July that took XEC below the 50 day EMA and the 90 day SMA (63.36). After that gap and selloff below the 90 day early in the week, XEC rebounded to test that breach with volume backing down as it made the moves back up. Showed a doji on the candlestick chart Friday, suggesting momentum is changing after the lower volume rebound. A failure here opens the door down toward 55. We are looking to capture a chunk of that move, and a run to the target lands a 45%ish gain.
Volume: 1.239M Avg Volume: 1.141M
BUY POINT: $62.97 Volume=1.4M Target=$58.25 Stop=$63.68
POSITION: XEC TM - Aug. $65p (-47 delta)
http://www.investmenthouse.com/ci/xec.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: Tentatively set for 7-21-08 with earnings, but AAPL has been holding off on a new split announcement.
ACL: Wildcard that could announce with earnings on 7-23-08
ACS: August 7. Below resistance, above the 200 day SMA, working laterally in a tight range.
AGU: August 6. Held the 50 day EMA for a new break higher
APD: Tentatively set for third week of July. Still trying to recover off a 200 day SMA test.
BAX: Forecast 7-17-08
BHI: Tentatively set for 7-22-08 but still trying to get up off the 200 day SMA
BTU: Forecast third week of July
CHK: Kind of a wildcard for early August, but showing great strength.
CLB: A wildcard with no splits. Tentatively set for third week of July
DO: Wildcard that could give us a split mid-July
FTI: Tentatively set for first week of August
GENZ: Forecast 7-23-08
HES: Forecast last week of July
IBM: Strong volume as IBM bounces off the April consolidation
MUR: Tentatively set the last week of July
POT: Forecast 7-24-08
RIG: Forecast 8-6-08. Struggling below the 90 day SMA after crashing that level last week.
RS: A bit low in price for its typical announcement, but looking solid. Earnings 7-17-08
SCHN: Researching date
SII: Forecast 7-24-08
SLB: Forecast 7-18-08
TMX: Wildcard as it has been a long time since a split but a nice pattern. Forecast third week of July
VAR: Forecast third week of July
NEW PRE-ANNOUNCEMENT PLAYS:
Play Date: 07/12/2008
AGU (Agrium--$101.47; +0.68; optionable): Agricultural chemicals
http://biz.yahoo.com/p/a/agu.html
EARNINGS: 8-6-08
STATUS: Test 50 day EMA. AGU is coming off an early July test of the 50 day EMA (95.09), gapping up Wednesday on some strong, above average volume after a high volume reversal at the 50 day support on Tuesday. AGU double gapped higher in June, and this early July test has filled those gaps, setting the stage for some more upside, and the volume at the 50 day EMA as it held key support shows there is still a lot of support for the stock; the world has gotta' eat. It has more than doubled in the past year, however, so we are not looking for another double here, but a solid move up toward the June peak at 113.88.
Volume: 3.913M Avg Volume: 5.44M
BUY POINT: $102.55 Volume=6.5M Target=$114.95 Stop=$97.65
POSITION: AGU JU - Oct. $100c (53 delta) &/or Stock
http://www.investmenthouse.com/ci/agu.html
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 07/03/2008
TMX (Telefonos De Mexico--$24.02; +0.02; optionable): Long distance carrier in Mexico
http://biz.yahoo.com/p/t/tmx.html
EARNINGS: 4-22-08
STATUS: Cup w/handle. Volume started sharply higher last week as TMX posted some upside sessions, knocking at the breakout from its 14 month base. Nice base consolidating a long, strong run higher, and the handle (the last consolidation and shakeout point) is using the 50 day EMA (22.34) as support. Good point to find buyers and we like how volume pumped up on the upside sessions starting in July as TMX moved up while most of the market sold off hard. Finding money that is leaving other areas; always a good sign. Going to be patient and let TMX show us the breakout move, and then we move in.
Volume: 2.319M Avg Volume: 2.341M
BUY POINT: $24.58 Volume=3M Target=$28.65 Stop=$23.06
POSITION: TMX KX - Nov. $22.50c (62 delta, no OI) &/or Stock
http://www.investmenthouse.com/ci/tmx.html
CONTINUING POST-SPLIT PLAYS:
Play Date: 07/09/2008
ABMD (Abiomed--$18.19; -0.29; optionable): Medical instruments
http://biz.yahoo.com/p/a/abmd.html
EARNINGS: Mid-August
STATUS: Test 18 day EMA. Still a great pattern, moving higher Thursday but then backing off modestly Friday, testing and holding the 18 day EMA on the low. Low volume remains; just needs to see the break and a bit of strong upside volume to give us the buy. To recap: Broke out from a 6 month base to start June, rallied to 20 and made its first test of that strong move over the past three weeks as the market sold off. Moved back to support at the 18 day EMA (17.95) on light trade, started back up off that level Thursday. Looking for it to continue the breakout move on some stronger trade to give us the entry point.
Volume: 221.705K Avg Volume: 312.822K
BUY POINT: New: On a continued move higher (orig. $18.44) Volume=350K Target=$22.32 Stop=$17.15
POSITION: IBU IW - Sept. $17.50c (61 delta) &/or Stock
http://www.investmenthouse.com/ci/abmd.html
Play Date: 07/10/2008
ADTN (Adtran--$25.36; +0.27; optionable): Telecom equipment
http://biz.yahoo.com/p/a/adtn.html
EARNINGS: 7-15-08
STATUS: Cup w/handle. Bounced up Friday but volume was lower as ADTN moves laterally over the 18 day EMA. Very solid and set to move. The only issue is earnings out on Tuesday. If it gives us the move, great. To recap: Earnings are out Tuesday before the open, making this a riskier play, but it is showing good accumulation ahead of the report with an upgrade this week. It is bumping up at the top of its 3 month lateral range that is the handle (the last shakeout and consolidation) in its 12 month base. It surprised in April, sending it higher in its base and starting formation of the right side. Now we anticipate another good report to break it higher. If it moves up we will start taking some positions but not a full one; more around half of our money for this position. If not we will see how it performs Monday and pick up a partial position ahead of the close.
Volume: 1.139M Avg Volume: 977.759K
BUY POINT: $26.22 Volume=2M Target=$31.48 Stop=$24.38
POSITION: RQA KE - Nov. $25c (61 delta) &/or Stock
http://www.investmenthouse.com/cs/adtn.html
Play Date: 07/10/2008
FLIR (Flir Systems--$42.55; -0.19; optionable): Thermal imaging, infrared camera systems
http://biz.yahoo.com/p/f/flir.html
EARNINGS: 7-24-08
STATUS: Flying plateau. Another session showing good action over the 10 day EMA on low volume. Very nice and waiting for the next break higher to move in. To recap: Looking to add some positions as FLIR is setting up for a new break higher with this 6 session lateral move over the 10 day EMA (42). Nice tight flat move on low volume, the calm before the storm, holding back even as money flow moves higher. Ready to move in when it starts higher, showing it is ready for the next run.
Volume: 1.417M Avg Volume: 1.943M
BUY POINT: $43.91 Volume=2.8M Target=$52.75 Stop=$40.97
POSITION: FFQ JH - Oct. $40c (66 delta) &/or Stock
http://www.investmenthouse.com/ci/flir.html
Play Date: 07/02/2008
TISI (Team, Inc.--$34.52; +0.56; no options): Specialty maintenance and construction services
http://biz.yahoo.com/p/t/tisi.html
STATUS: Cup w/handle. Another upside session Friday though no volume to push it. TISI is looking solid after testing the 50 day EMA (32.60) mid-week and then rebounding off that support. Just want to see the break on some solid volume to show us the buyers are backing it on the breakout. To recap: Tested back to support at the key 50 day EMA to finish the handle, now starting to bounce on rising, above average volume. Getting there, looking really good for a run at the breakout of its 7 month base.
Volume: 90.319K Avg Volume: 149.031K
BUY POINT: $35.54 Volume=225K Target=$42.75 Stop=$33.45
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/tisi.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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