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1) MARKET SUMMARY
Stocks still selling on good news in fear of rate hikes.
- Strong jobs report tries to rally stocks but fear of rate hikes still controls for now.
- Sizzling jobs report continues string of strong economic data as expansion beats expectations
- Market still discounting interest rate hikes as large cap indexes head toward 200 day SMA.
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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 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.
SSP (E.W. Scripps--$103.01; -0.10; optionable): Newspapers. Splits 2:1 on a date yet to be announced.
Company Profile
STATUS: 50 day EMA test. Broke from a short 6 week flat base in early April and rallied to 109. It has come back with a good test, pulling back to the 50 day EMA (102.35) on lower, below average volume as the rest of the market sold on higher trade. Friday SSP showed a nice, tight hammer doji over the 50 day and above additional price support at 102.50. Looking for a strong volume bounce from here to move in and capture the next move. Strong stocks use the 50 day EMA as the terminus of a pullback, and institutions owning the stock often ‘stock up’ on it at this point. Thus we are looking for high volume on a bounce higher as a sign that big money is moving back in.
Volume: 86.7K Avg Volume: 182.759K
BUY POINT: $104.78 Volume=225K Target=$112 Stop=$103.72
POSITION: SSP IA - Sept. $105c (43 delta).
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