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| Free Weekend Newsletter for June 1, 2003 | ||
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| 1) MARKET SUMMARY Volume surges as SP500 on the brink of a higher high.- Strong surge caps strong week.
Try "The Daily" with no risk for 2 weeks! 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: Flying plateau. NCEN broke out from a 2.5 month cup with handle base in April, rallied up the short term MVA 4 times, and then came back to test the 50 day MVA (38). From there it gapped higher two Thursday’s back on huge volume and has formed the current lateral move the past week as volume trailed off. The 10 day MVA (44.50) is coming up to meet the stock, and when it does we anticipate a new break higher for the next leg. After the 50 day MVA test, the slate is clean for another run up the short term MVA. Excellent money flow and a relative strength breakout. Volume: 382.065K Avg Volume: 652.821K BUY POINT: $47.25 Volume=700K Target=$54.35 Stop=$43.94 POSITION: URE HI - Aug. $45c (62 delta) &/or Stock. Click here for more information on our Stock Split Report!
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ICOS (Icos Corp.--$31.65; +0.62; optionable): Drug manufacturer.
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QCOM - Qualcomm, Inc. is currently trading at $33.53. The July $32.5 Calls (AAWGZ) are trading at $2.40. That provides a return of about 4% if QCOM is above $32.5 on expiration Friday in July.
Click here for more information on our Covered Calls Service! | ||
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* * * SCOTTRADE * * * | ||
5) IPOs Mark Twain gets the credit, whether he deserves it or not, for being fond of saying: “Reports of my death are premature.” The same can be said of the IPO market this year. It’s been quiet. But it’s not dead. (This IPO story is continued on our website in the IPO Forum.) | ||
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