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We are starting our second round of LIVE online investment seminars! Click here for full details! | ||
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| 1) MARKET SUMMARY Dow finishes a bad week with more selling, rallying to avoid a dubious record.- Dow finishes second worst week ever.
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2) Stock Splits Be sure to read our Stock Splits Manual. 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: FHRX has been a strong performer, running up along its short-term MVA’s (10 day at 35.59), making a dip to the 50 day MVA (then 30, currently 33.24) in August. The stock visited the 50 day for the third time this week Friday (tapping near Wednesday’s low of 32.07 Friday), but again was able to rebound back over that level. It gapped down Friday, and the move back up was accompanied by lower, but still strong volume (315,600; average 160,000). Not the best move, but the resiliency is positive and this is the same move it made in early August. Patterns tend to repeat. With a bit of help in the market FHRX could finally be able to break loose. We will see if Monday brings a last move before the split. Watch the high of 38.35 on the push up. PLAY: Aggressive: A move up in a rally, watching the 10 day as possible resistance. Stock only. Stock only. 34. Click here for more information on our Stock Split Report!
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DRS (Drs Technologies; $32.25; +1.45; no options) Aerospace defense.
Click here for more information on our Technical Traders Report!
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BMET - Biomet Inc. is currently trading at $26. The October $25 Calls (BIQJE) are trading at $2.50. That provides a return of about 6% if BMET is above $25 on expiration Friday in October.
Click here for more information on our Covered Call, Credit Spread and Leaps Service! | ||
| The equity markets are back in business for the first time since last week’s terrorist attacks, but investors face a radically different environment for investing. After an especially quiet summer, investors and bankers expect the IPO market to all but shut down for the next few weeks. Waiting to see just how weak the market appears, companies that had planned to go public before the end of the third quarter are now on hold.
While this segment of the market is not a top priority for investors, a few underwriters refused to back off from IPOs and filed new offerings last week. Deutsche Banc Alex. Brown filed Thursday to take New Zealand-based Fisher & Paykel Healthcare (proposed ticker: FPHC) public. Leading underwriter Credit Suisse First Boston and Goldman Sachs filed Friday to take Weight Watchers International (proposed ticker: TBA) public.
(This IPO story is continued on our website in the IPO Forum.) | ||
Covered Calls: Our covered call service provides nightly updates - energize your portfolio! Tech Traders: Breakouts, wedges, pennants etc...focusing on stocks ready to move now! The Daily: "The Daily" is a must read for all investors -- learn what is really going on in the market! Taped Seminars: Investing seminars on audio and video to help you profit. Book Store: Check-out the prices in our firesale section! Win $1,000: Enter our Investment Challenge -- $50,000 Portfolio for you to trade. Quote Tracker: A FREE Windows program that provides streaming real-time quotes, Level II and more. Live Seminars: NEW! Investing seminars live on the net! | ||
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