Jobs Report Sports Solid Gain
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INVESTMENT HOUSE.COMTM
Informing Investors Around The World
Read In All 50 States And Over 100 Countries
Weekend Newsletter for
December 4, 2005
Table Of Contents 1) MARKET SUMMARY 2) PRE-SPLIT PLAY 3) TECHNICAL PLAY 4) COVERED CALL PLAY
http://ichart.yahoo.com/v?s=^ixic”> http://ichart.yahoo.com/v?s=^dji”>
http://www.investmenthouse.com/1splitnotification.htm”>Stock Split Notices http://www.investmenthouse.com/1questions.htm”>Investing Q & As http://www.investmenthouse.com/1glossary.htm”>Glossary
1) MARKET SUMMARY > >From “The Daily” at InvestmentHouse.com
Market lulls after strong Thursday break higher, aided by our friends at the Fed.
– Thursday advance quelled by Greenspan, FOMC member comments.
– Jobs report sports solid gain in keeping with recent economic data.
– Greenspan and company hit the road to dispel notion the Fed is packing its bags.
– One week at a time heading into the new year as technical action is good but sentiment hitting extreme levels.
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Market Summary (continued)
It is not unusual for the market to take a pause after a strong move, and Friday started out softer, helped by some solid jobs numbers that signaled a further recovery from the Gulf storms and also that the Fed is likely to be sitting on the market’s shoulder longer than most want. That softer start gave way to a budding move higher to continue the Thursday surge, but it was hit by an early frost in the form of a couple of Greenspan speeches where he waxed very political once more. He also unleashed his cohorts to further spread the word that despite the FOMC minutes released last month the Fed was still in the game because there are just so many issues that require its vigilance. The pinball president of the Dallas Fed was a case in point, echoing Greenspan’s warnings about deficits, braying the Fed was not going to ‘monetize’ the deficits, whatever the hell that means. Man, talk about a broken man; he showed a little independence in the summer with his ‘eighth inning’ analogy, but got slapped down. Since then he has been Greenspan’s puppy, echoing everything Greenspan says, even going further with his ‘colorful’ analogies.
With that overhang, the early rebound attempt foundered and stocks slogged around through lunch and most of the afternoon. Then once more the upside bias took over and stocks spent the last 45 minutes rebounding. SOX led the way with NASDAQ following. By the close they were back to positive, closing at new highs for the year. Volume was low and breadth was poor, but when it came to the end of the day the upside bias asserted itself once again.
Chips led the way on reports that chip prices are up due to chip shortages such as Intel’s mobile chips. Other chips for electronics are in high demand as well, and there are shortages pushing up prices. Thus, there may be fewer chips sold due to shortages, but overall sales are up because of price increases. NASDAQ was not too far behind, and SP600, though basically flat, posted another new high for the year as well.
http://www.investmenthouse.com/1weekendmarketsummary.htm”>Read “The Daily” Entire Weekend Summary
Here’s a trade from “The Daily” and insights into our trading strategy:
Chart by http://www.stockcharts.com”>StockCharts.com
http://www.investmenthouse.com/cc/sirfsm.gif” width=”360″ height=”208″ border=”1″>
http://investmenthouse.com/indexq.php?smbl=
SIRF”>
SIRF (Sirf Tech Holdings–$29.05; -0.43; optionable): Scientific & technical instruments.
http://finance.yahoo.com/q/pr?s=sirf”>Company Profile
After Hours: $28.65
STATUS: Ascending base. SIRF is preparing for a break to a new all-time high, nearing the breakout of a 9 week base that formed roughly along the 50 day EMA (27.02). Good volume Thursday as SIRF jumped up to the breakout point, easing back some Friday on lower trade similar to the overall market. Strong fundamentals to go along with the pattern that is setting it up to take it higher.
Volume: 1.178M Avg Volume: 1.069M
BUY POINT: $30.11 Volume=1.6M Target=$36 Stop=$28
POSITION: QIR CF – Mar. $30c (54 delta) &/or Stock.
http://www.investmenthouse.com/1daily1.htm”>Learn more about “The Daily” with Stock Picks! – Issued 5 Times Per Week
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.
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.
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Listen to Stock Split Report Editor Jon Johnson’sstock split interview on CNBC-TV! [ http://www.investmenthouse2.com/cntdir.asp?name=JonJohnson-B” target=”_new”>Broadband | http://www.investmenthouse2.com/cntdir.asp?name=JonJohnson-D” target=”_new”>Dial-up ]
Here’s a pre-split play to watch and our current analysis.
Chart by http://www.stockcharts.com”>StockCharts.com
http://www.investmenthouse.com/cc/rrcsm.gif” width=”360″ height=”208″ border=”1″>
http://investmenthouse.com/indexq.php?smbl=
RRC”>
RRC (Range Resources–$38.02; -0.42; optionable): Oil and gas. Splits 3:2 on 12-5-05.
http://finance.yahoo.com/q/pr?s=rrc”>Company Profile
STATUS: Double bottom w/handle. Setting up nicely for a run this week as it moves into its split. Nice 9 week base has formed roughly using the 50 day EMA (35.64) as support, setting up for a breakout to a new all-time high. Has quietly set up during the recent pullback in oil, and now ready to show us a move similar to what CAM has showed us in its pre-split run.
Volume: 1.156M Avg Volume: 1.097M
BUY POINT: $38.88 Volume=1.6M Target=$44.95 Stop=$37.08
POSITION: RRC CG – Mar. $35c (80 delta) &/or Stock.
Learn more about our Stock Split Report and how we have made gains of 321% with our powerful stock split plays!
http://www.investmenthouse.com/a/StockSplitReport.html”>Details Here.
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Chart by http://www.stockcharts.com”>StockCharts.com
http://www.investmenthouse.com/cc/brcmsm.gif” width=”360″ height=”208″ border=”1″>
3) TECHNICAL PLAYhttp://investmenthouse.com/indexq.php?smbl=
BRCM”>
BRCM (Broadcom–$48.77; +1.18; optionable): Semiconductor integrated circuits
http://finance.yahoo.com/q/pr?s=brcm”>Company Profile
After Hours: $48.72
STATUS: Cup w/handle. BRCM is breaking out from a 9 week base formed using the 50 day EMA (45.18) as support. Has moved to a 4 year high and looking for more. Solid 4 to 2 accumulation in the base (4 up price weeks on rising volume to 2 down price weeks on rising volume) shows net buying by the big money, setting up the breakout and run. Good move Friday on below average volume. Looking for more trade as it continues higher to step in and take positions. Nice leader ready to run into the close of the year.
Volume: 8.194M Avg Volume: 8.025M
BUY POINT: $49.12 Volume=10M Target=$56.95 Stop=$46.55
POSITION: RCQ EJ – May $50c (53 delta) &/or Stock.
http://www.investmenthouse.com/1tech1.htm”>Learn more about our Technical Traders Report – Issued 5 Times Per Week Chart by http://www.stockcharts.com”>StockCharts.com
http://www.investmenthouse.com/cc/stldsm.gif” width=”360″ height=”208″ border=”1″>
4) COVERED CALL PLAYhttp://investmenthouse.com/indexq.php?smbl=
STLD”>
STLD – Steel Dynamics, Inc. is currently trading at $35.53. The January $35 Calls (RQLAG) are trading at $2.35. That provides a return of about 6% if STLD is above $35 on expiration Friday in January.
http://finance.yahoo.com/q/pr?s=stld”>Company Profile
http://www.investmenthouse.com/1coveredcalls1.htm”>Learn more about our Covered Call Tables – 8 Tables Updated 5 Times Per Week
* * * SCOTTRADE * * *
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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.
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