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Begin part 3 of 3
THE PLAYS
New Pre-Announcement plays contained in that section.
POST-SPLIT PLAY:
Play Date: 07/15/2008
GIS (General Mills--$64.03; +0.79; optionable): Cereals and other packaged foods
http://biz.yahoo.com/p/g/gis.html
EARNINGS: Announced June 25
STATUS: Reverse head and shoulders. Strong, strong volume Tuesday as GIS cleared a 6 week base that consolidated the mid-April move out of a larger 10 month base. Nice short rest stop in the market selling, and now moving up sharply to a new high. A buy as it continues on up.
Volume: 6.314M Avg Volume: 2.672M
BUY POINT: $64.25 Volume=3M Target=$69.95 Stop=$62.12
POSITION: GIS JL - Oct. $60c (73 delta) &/or Stock
http://www.investmenthouse.com/ci/gis.html
LEADER PLAYS:
Play Date: 07/15/2008
AVAV (Aerovironment--$30.38; +0.92; optionable): Unmanned aircraft systems and energy technologies
http://biz.yahoo.com/p/a/avav.html
EARNINGS: Announced 6-24-08
STATUS: Test 18 day EMA. Broke out in late June (on earnings) from a nice 9 month base, its second base of its short life (came public in January 2007). Great breakout and rally up to 32 last week, coming back this past week to test, tapping the 18 day EMA on the Tuesday low (28.50) before rebounding for a nice gain on solid, rising, above average volume. Nice low volume test of the break to a new high showing no dumping or selling on the test. Looking to move in as AVAV continues higher with the breakout move.
Volume: 289.951K Avg Volume: 194.972K
BUY POINT: $30.79 Volume=300K Target=$36.95 Stop=$28.63
POSITION: VQS IF - Sept. $30c (55 delta) &/or Stock
http://www.investmenthouse.com/ci/avav.html
Play Date: 07/15/2008
CEPH (Cephalon--$72.48; +2.34; optionable): Drugs
http://biz.yahoo.com/p/c/ceph.html
EARNINGS: 7-29-08
STATUS: Cup w/handle. Starting the breakout from its 8 month base, clearing the June and early July peaks on the best volume in two months. Coming off the bottom of a longer base just over a year old, but with the healthcare/drug sectors getting the money in a more safety-conscious market, this is a nice point to move in as CEPH rallied and seeks the prior highs near 85. Our initial target is not that ambitious, and if it remains strong after it hits that level, great.
Volume: 2.879M Avg Volume: 1.418M
BUY POINT: $72.69 Volume=1.4M Target=$79.95 Stop=$69.55
POSITION: CQK KN - Nov. $70c (65 delta) &/or Stock
http://www.investmenthouse.com/ci/ceph.html
Play Date: 07/15/2008
IBB (NASDAQ Biotech ETF--$82.01; +1.65; optionable)
http://biz.yahoo.com/p/i/ibb.html
STATUS: Test 200 day SMA. Biotechs are getting money moving their way and a good way to play this is the ETF that is set up in great shape to make a run at the October high as money moves toward healthcare and medical stocks. Strong volume as July clears the July peak in its 9 month base. Money flow is screaming upside. Very nice.
Volume: 2.155M Avg Volume: 978.406K
BUY POINT: $82.21 Volume=1.5M Target=$88.89 Stop=$79.57
POSITION: IBB IP - Sept. $80c (73 delta) &/or Stock
http://www.investmenthouse.com/ci/ibb.html
DOWNSIDE: Energy has a lot of weak patterns
Play Date: 07/15/2008
DUG (Oil & Gas Ultrashort ETF--$32.59; +2.58; optionable)
http://biz.yahoo.com/p/d/dug.html
STATUS: Upside play on a downside move in oil. Set up a rounded bottom over May to early July, rallied, tested to make a higher low, and with the move down in oil Tuesday, DUG started to breakout. Looking to play this as an upside play that moves higher as oil moves lower. Oil has been very stingy with its uptrend but this looks to be the end of this current trend higher that is in need of a deeper test.
Volume: 28.818M Avg Volume: 20.53M
BUY POINT: $32.71 Volume=25M Target=$36.75 Stop=$30.94
POSITION: DZG JF - Oct. $32c (61 delta) &/or Stock
http://www.investmenthouse.com/ci/dug.html
Play Date: 07/15/2008
PDS (Precision Drilling--$24.60; -0.40; optionable): Oil and gas drilling
http://biz.yahoo.com/p/p/pds.html
EARNINGS: 7-23-08
STATUS: Head and shoulders. Formed a square head May through June, then broke lower to start July, gapping lower. Found bottom last week and has made a low volume recovery to the 90 day SMA (25.22). Tuesday it turned over on a sharp volume surge. Looking to move in as it continues the break lower. A move to the target lands a 41%ish gain. It can head lower than that as the 200 day SMA is down at 21.
Volume: 1.102M Avg Volume: 738.72K
BUY POINT: $24.15 Volume=75K Target=$22.05 Stop=$25.18
POSITION: PDS UE - Sept. $25p (-50 delta)
http://www.investmenthouse.com/ci/pds.html
Play Date: 07/15/2008
USO (United States Oil Fund ETF--$112.39; -5.09; optionable)
http://biz.yahoo.com/p/u/uso.html
STATUS: Put. The flip of the DUG played with a buy of put options. USO has fallen back to its near trendline, holding it on the Tuesday close. Looks ready to fall further either toward the 50 day EMA (107) or down to the next trendline just over 105. If oil falls to $120, USO would fall to 97ish. Thus if there is a big breakdown in the mix our initial target could just be a way station on the way to that level. A move to the initial target lands a 35%ish gain.
Volume: 27.613M Avg Volume: 12.438M
BUY POINT: $112.06 Volume=14M Target=$107.11 Stop=$113.98
POSITION: IYS TH - Aug. $112p (-46 delta)
http://www.investmenthouse.com/ci/uso.html
Play Date: 07/15/2008
WTI (W&T Offshore--$53.21; -2.21; optionable): Oil and gas drilling, exploration
http://biz.yahoo.com/p/w/wti.html
EARNINGS: Early August
STATUS: Put. Familiar pattern with a broader top in June then a crash lower to start July. WTI fell through the 50 day EMA (52.47) but then rebounded to the old upper channel line and failed Tuesday. It sold to the 50 day EMA on the low. Looking for it to break that level and give us a buy on the next leg lower. A move to the target lands a 41%ish gain.
Volume: 952.586K Avg Volume: 956.07K
BUY POINT: $52.36 Volume=1.1M Target=$47.55 Stop=$53.39
POSITION: WTI TK - Aug. $55p (-50 delta)
http://www.investmenthouse.com/ci/wti.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. Racing higher.
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. Heading the wrong direction fast.
IBM: Stronger volume as IBM bounces off the April consolidation again
MUR: Tentatively set the last week of July. As with HES, heading the wrong way
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
CONTINUING PRE-ANNOUNCEMENT PLAYS:
Play Date: 07/03/2008
TMX (Telefonos De Mexico--$24.60; +0.56; optionable): Long distance carrier in Mexico
http://biz.yahoo.com/p/t/tmx.html
EARNINGS: 4-22-08
STATUS: Cup w/handle. Strong shot of volume Tuesday as TMX gapped lower then rebounded for a solid gain, moving toward the breakout from its base. Money flow is starting to rock and roll and TMX looks ready to put in the upside move. To recap: 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: 3.351M Avg Volume: 2.334M
BUY POINT: On a continued move higher (orig. $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--$18.12; +0.10; optionable): Medical instruments
http://biz.yahoo.com/p/a/abmd.html
EARNINGS: Mid-August
STATUS: Test 18 day EMA. Excellent test of the 18 day EMA (17.99) on low volume as ABMD continues the nice set up for the break higher. Very nice. 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: 227.462K Avg Volume: 314.245K
BUY POINT: $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
FLIR (Flir Systems--$41.95; -0.05; optionable): Thermal imaging, infrared camera systems
http://biz.yahoo.com/p/f/flir.html
EARNINGS: 7-24-08
STATUS: Flying plateau. Dipping back to the 18 day EMA (41.37) on low volume, making a nice shakeout to set the stage for the next break higher. Nice. 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: 1.548M Avg Volume: 1.971M
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
CONTINUING LEADER PLAYS:
Play Date: 07/14/2008
COV (Covidien Ltd.--$49.01; +0.39; optionable): Medical instruments
http://biz.yahoo.com/p/c/cov.html
EARNINGS: 8-5-08
STATUS: Double bottom w/handle. Big, big volume spike on the Tuesday upside move, just as on the other upside this month. COV is ready to make its move. Nice, nice. To recap: Another stock in the medical instruments with a double bottom base formed using the 90 day SMA (46.80) on the two lows. Excellent volume as COV tested and then moved up off the 90 day last week. Paused Friday then gapped higher Monday only to come back to test near support at the 18 day EMA and then bounce to close flat. Nice 6 week base formed after moving to a new high in May and early June. Excellent money flow moving higher ahead of price and after this test we are looking to pick up COV as it rebounds.
Volume: 5.824M Avg Volume: 2.688M
BUY POINT: $49.31 Volume=4M Target=$55.95 Stop=$47.77
POSITION: COV JJ - Oct. $50c (44 delta) &/or Stock
http://www.investmenthouse.com/ci/cov.html
CONTINUING DOWNSIDE PLAYS:
Play Date: 07/14/2008
NLC (Nalco Holding Co.--$19.82; -0.18; optionable): Chemicals
http://biz.yahoo.com/p/n/nlc.html
EARNINGS: 7-29-08
STATUS: Put. Gapped lower, sold to 19, then rebounded to close basically flat. Volume jumped back above average as it made that move. So . . . we wait and see if NLC rolls back over here to continue the trend lower and gives us a nice little downside play. To recap: NLCE tried to form a base October to June and even broke out in June . . . for two days. Then it gapped lower and has continued lower since, trying to bounce and form a right shoulder, but never really getting the job done; quite weak. Sold to 20 to start July where there is some support from the March interim lows. Money flow continues lower ahead of the price, and with the 10 day EMA pushing down on it we are looking for NLC to follow the money lower. A move to the target lands a 44%ish gain.
Volume: 1.253M Avg Volume: 1.01M
BUY POINT: $19.79 Volume=1.5M Target=$18.11 Stop=$20.71
POSITION: NLC TD - Aug. $20p (-40 delta)
http://www.investmenthouse.com/ci/nlc.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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