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Weekend Newsletter for January 11, 2004 | ||
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| 1) MARKET SUMMARY Market bounces back from disappointing news but cannot hold to the close.- Another comeback, but this one fails to hold.
Learn more about our Stock Split Report - Issued 5 Times Per Week 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 mover 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. Here's a pre-split play to watch and our current analysis.
Company Profile STATUS: Ascending triangle. After a nice breakout in October NCEN has formed the current 9 week base, working up the 50 day MVA (37.23), using that as support. It has a constant top at roughly 40, building pressure from below as it works up toward that level. Volume surged Wednesday and Friday as NCEN made strong advances toward the breakout point. Excellent 4 to 1 accumulation (4 up price weeks on rising volume to 1 down price week on rising volume) in the base. Ready to make a breakout and is flexing its muscles some this past week. Volume: 1.558M Avg Volume: 932.772K BUY POINT: $41.32 Volume=1.4M Target=$49 Stop=$38.43 POSITION: URE EH - May $40c (58 delta) &/or Stock. Learn more about our Stock Split Report - Issued 5 Times Per Week
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AXTI (AXT, Inc.--$3.77; +0.25; no options): Semiconductor integrated circuits.
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RHAT - Red Hat, Inc. is currently trading at $20.39. The February $20 Calls (RCVBD) are trading at $1.85. That provides a return of about 8% if RHAT is above $20 on expiration Friday in February.
Learn more about our Covered Call Tables - 8 Tables Updated 5 Times Per Week | ||
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