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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).

For post-splits, we can play them as we would pre-splits (very short term), but we prefer to stretch our horizons, playing the trend. When playing options, we look further out, 2 or more months at least. We let the trend carry us along if there is one, but we will also take profits if the technical pattern degenerates, e.g., breaks a trendline. The main difference between post-splits and pre-splits plays is that we really have to like the pattern. Pre-splits can run right before their splits even with poor technical indicators. For post-splits, we are looking at the stocks from more of a longer term "would I buy this stock at this juncture?" position. Now there are times when a hot stock splits and investors pile in to get in while the stock is 'cheaper.' We play those, but with more of a short-term, pre-splits mentality in that we will be ready to get out fast if the momentum fades.

Remember, everything we do has to pass muster with the market that day ... don't fight the market on these plays. Here's a post-split play to watch and our current analysis.

Chart by StockCharts.com

BYS (Bay State Bancorp--$24.55; 0; no options): Savings and loan.
Company Profile
STATUS: Testing the breakout. Literally no change from Thursday. BYS is attracting no volume as it moves laterally over the 10 day MVA. This tight action can precede major moves. We are being patient and we are ready to move.
Volume: 3.4K Avg Volume: 124.227K
BUY POINT: $25.45 Volume=194K Target=$30.45 Stop=$23.67
POSITION: - Stock (no option chain).

Click here for more information on our Stock Split Report!

Safety Insurance Group Inc. (SAFT.O) raised $72 million in an initial public offering, completing the sale after the insurer delayed it for a week and reduced the offer price.

Boston-based Safety sold 6 million shares for $12 each, in line with the expected price, said an official at Credit Suisse First Boston (CSGZn.VX),the investment bank which managed the sale.

(This IPO story is continued on our website in the IPO Forum.)