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| Free Weekend Newsletter for August 24, 2003 | ||
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| 1) MARKET SUMMARY Intel increases guidance. It’s a breakout, it’s a rally, no its another false start.- Large caps fail their breakout attempt, end the week back on the range once again.
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: Testing the breakout. Believe it or not, we got into our first shares of JCOM back in 2001. It has been a great run, and now we are going to have twice as many shares. A great way to build wealth because now we can use those shares to write calls against each time the stock tops and starts down. Right now, however, we are looking at the stock as a pre-split, and the way it can run, we don’t want to risk selling calls against our positions right now. We have already taken some gain from our option position on this play already, and Friday JCOM was falling sharply though on low volume. It looks as if it is going to test the 10 day MVA (56.74) or down to price support at 65. From there it will be primed for the next move and that is when we jump in when it starts back up. Volume: 423.853K Avg Volume: 825.88K BUY POINT: New: Test 57, then 57.45 on the way back up (orig. $51.95) Volume=1.4M Target=$58 Stop=$56.68 POSITION: JQF IJ - Sept. $50c (53 delta) or JQF LK - Dec. $55c (45 delta) &/or Stock. Click here for more information on our Stock Split Report!
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RFMI (RF Monolithics--$7.56; +0.6; no options): Telecom equipment.
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CTX - Centex Corp. is currently trading at $77.65. The October $75 Calls (CTXJO) are trading at $5.80. That provides a return of about 4% if CTX is above $75 on expiration Friday in October.
Click here for more information on our Covered Calls Service! | ||
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