Invest and Trade Profitably with Jon Johnson

March 10, 2002 Weekend Newsletter

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http://investmenthouse.com/weekend/031002.htm “> Read this report online in full color with graphs

1) MARKET SUMMARY

Employment data blows away the market and fuels further Nasdaq strength.

– Rally continues on better employment data.
– Friday the leaders did little in the rally indicating things are getting a bit extended.
– Lagging employment numbers quick improvement is a real positive.
– Inflation ahead? The sad irony if it is true.
– Senate passes stimulus as most forget about last year’s tax cut.
– No selling into rallies of late, but some leaders having a bit of trouble.
– Subscriber Questions.

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.

WRI (Weingarten Realty–$50.87; -0.04; no options): Splits 3:2 effective 4-16-02.

STATUS: WRI formed a saucer from early November, and last week tested its 50 day MVA (49.65) and made a strong bounce up to a new high of 51.65. It has dipped back but is holding the 10 day MVA (50.61), which is with its former saucer highs. WRI tapped that support Friday before pulling up to close with a doji. Looking for the stock to hold here and make another move.

PLAY: Over 51.20 on increased volume (94,300 Friday; average 80,000), with stock. Stop: 50.

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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

GPC (Genuine Parts–$37.10; -0.07; optionable): Auto Parts Wholesale.

STATUS: In the handle to a 10-week cup with handle base, formed after GPC broke out of a flat base in early December. The handle is showing decreasing volume (down Friday to 255,900; avg. 357,000) with the stock holding support at 37 the last four days and showing another doji Friday. The 10 day MVA is just below at 36.75. GPC shows strong money flow; we are looking for a breakout. Target: 45

BUY POINT: 37.71 on volume of 536,000 or higher. Stop Advisory (7%): 35.07

POSITION: Stock and/or May $30 calls to buy (GPC EF; low open interests).

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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

LOW – Lowes Companies Inc. is currently trading at $42.77. The April $42.5 Calls (LOWDV) are trading at $2.30. That provides a return of about 5% if LOW is above $42.5 on expiration Friday in April.

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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

Indonesia’s international phone operator PT Indosat wants a planned initial public offering (IPO) by its cellular unit PT Satelindo to go ahead despite a government request to delay the move, a government official said on Friday.

The cash-strapped government hopes to sell a batch of state assets, including Indosat, this year as part of its 6.5 trillion rupiah ($651 million) privatisation programme to help ease a yawning budget deficit.

http://www.investmenthouse.com/1ipo.htm “> . . . continued . . .
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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 – 2002 by Online Investment Services, LP. – All Rights Reserved.

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