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| Free Weekend Newsletter for October 12, 2003 | ||
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| 1) MARKET SUMMARY Market holds status quo for next week.- Market holds gains to close the week but misses a breakout opportunity.
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 10 day. JBLU has made a long, steady rally since breaking out to start the summer, using the 10 and 18 day MVA as support. It has yet to come back toward the 50 day MVA (56.94), though there are those who would like to see it there (downgraded to a sell by one brokerage on Friday). After the downgrade JBLU fell to the 10 day MVA (65.82) on the low and rebounded to recover some of the loss. Stronger stocks overcome downgrades. We expected JBLU to make a further move down toward the 10 day MVA again before it is ready to move back up. The upside trend has increased, always something to watch after a long run higher. Given that it is moving pre-split, however, this pullback is a good entry point if it can overcome the downgrade and rebound on solid trade. May not be another 30 point move like the pre-announcement play, but one that can make us some good money. Volume: 3.348M Avg Volume: 1.292M BUY POINT: Test the 10 day MVA at 65.82, then $66.12 on the way back up. Volume=1.9M Target=$76 Stop=$65.62 POSITION: JGQ AN - Jan. $70c (41 delta) &/or Stock. Click here for more information on our Stock Split Report!
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ANEN (Anaren--$14.18; +0.49; optionable): Microwave components for wireless communications.
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JCOM - j2 Global Communications, Inc. is currently trading at $45.25. The November $45 Calls (JQFKI) are trading at $4.60. That provides a return of about 11% if JCOM is above $45 on expiration Friday in November.
Click here for more information on our Covered Calls Service! | ||
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