December 16, 2001 Weekend Issue
http://www.investmenthouse.com/weekend/121601.htm “> click here or on link for full report with graphs on our website
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1) MARKET SUMMARY
Market bounces back up off lows Friday, but still down for the week.
– Market is a picture of indecision with bullish and bearish tones.
– The big picture: the reason for the rally still exists, but new concerns arise with LU, CIEN and Q and wonders about a stimulus package.
– Economic news is mixed as well, but again many signs pointing to the bottom as well.
– Subscriber Questions.
– Team Trades.
http://www.investmenthouse.com/1weekendmarketsummary.htm “> Click here or on link for our full Weekend Market Summary
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http://www.investmenthouse.com/1daily1.htm “> Try “The Daily” with no risk for 2 weeks!
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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.
SASR (Sandy Springs Bancorp–$45.21; +0.85; no options): Splits 3:2 on 12-21-01.
STATUS: SASR made a very nice breakout last week, and after making a nice, lower volume test back all of this week that held support at the 10 day MVA (43.70; over prior pattern highs at 43), SASR made the move back up today. A solid move with sharply higher volume (14,600; average 17,950), we are now looking for a move over the high to continue the pre-split run. As always, we look carefully at the chart for topping signs that signal a time to exit a pre-split run; stocks can be volatile during this period, and we are quick to take profits when the stock shows it is about to drop and then starts to do so. Because of the volatility, we often will get a chance to play another move before the split (although SASR is now just a week away from the split). With that in mind, targeting 49.
PLAY: Over the high: 45.80 on above average volume, with stock. Stop: 43.
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http://www.investmenthouse.com/1stocksplits1.htm “> Click here to learn more about our Stock Split Report – Forbes.com Best of the Web Online Edition says: “. . . seek out the Stock Split Report . . .”
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3) Technical Play
TUNE (Microtune–$24.00; +0.55; optionable): Consumer Durables
STATUS: The stock was up Friday on huge volume, trying to break to a new high after testing the recent breakout from a 5-month v-bottomed base. The company announced a secondary public offering of stock on the 10th, then announced pricing Friday. Volume was through the roof at 5.1 million (avg. 933,000) and we are looking for that to blast TUNE over the recent highs (24.42 and the December high 25.69). TUNE first tested the 18 day MVA Monday, then the higher 10 day MVA on Thursday. Money flow and buying are huge. This stock is off the lows (below 10) in a 16-month base. Target: 30
BUY POINT: Aggressive: 24.50 on continued strong volume. Stop: 22.79 (7%).
POSITION: Stock and/or April $20 calls to buy (TUF DD).
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http://www.investmenthouse.com/1tech1.htm “> Click here to learn more about our Technical Trader Report
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4) Covered Call Play
ADSK – Autodesk Inc. is currently trading at $35.72. The January $35 Calls (ADQAG) are trading at $4.60. That provides a return of about 12% if ADSK is above $35 on expiration Friday in January.
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http://www.investmenthouse.com/1coveredcalls1.htm “> Click here to learn more about our Covered Calls Service
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5) IPOs
Monday should be a big day for the Nomura name.
Firstly, Nomura Research Institute Ltd (NRI), the influential research arm of Japan’s number one brokerage house, Nomura Holdings (8604.T), is set to list on the Tokyo Stock Exchange in the biggest initial public offering (IPO) in Japan this year.
On the other side of the Pacific, Nomura Holdings will become the first Japanese securities house to float its shares on the New York Stock Exchange (NYSE).
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http://www.investmenthouse.com/1ipo.htm “> This story continued in our IPO Forum
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The foregoing is commentary for informational purposes only. All statements and expressions are the opinions of Online Investment Services, LP., or Split Ventures, Ltd. This information is not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on the related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolios of writers for this issue may, in some instances, include securities mentioned herein and on the related web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors. No one associated herewith receives compensation in any manner from any of the companies that are discussed in this newsletter or on the related websites.
Copyright 1997, 1998, 1999, 2000, 2001 by Online Investment Services, LP. – All Rights Reserved.
