October 6, 2002 Weekend Issue
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THREE IN A ROW! Scottrade is proud to announce its THIRD CONSECUTIVE ranking as Highest in Investor Satisfaction with Online Trading Services by J.D. Power and Associates! Thank you, customers! Scottrade: Member SIPC.
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Read this report online in full color with graphs at
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1) MARKET SUMMARY
Early rally gives way to same result.
– Investors see through employment numbers as early rally fails.
– Employment numbers seem better, but not much substance.
– S&P 500 holds its low, teetering on a breakdown and not getting any help.
– Subscriber questions.
http://www.investmenthouse.com/1weekendmarketsummary.htm “> Click here or on link for our full Weekend Market Summary
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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.
XRAY (Dentsply–$41.51; -0.02; optionable): Dental supplies.
STATUS: cup. An old friend that made us excellent money before and after its split in February, XRAY is now trying to complete a 7-week cup base. Accumulation in the base is solid at 2 up weeks on rising volume to 0 down weeks on rising volume. This is a base sitting right on top of the base it broke out of in August after the trend lower from April that culminated in the July sell off. We expect that XRAY may try to form a short handle here near 42 as it closed off the high Thursday and moved laterally Friday. Holding up very well in the market selling, a breakout from XRAY puts the stock at an all-time high.
Volume: 867.106K Avg Volume: 631.728K.
BUY POINT: $42.28 Volume=900K Target=$48.75 Stop=$39.32.
POSITION: XEQ DH – April $40c (64 delta) and/or Stock.
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3) Technical Play
STN (Station Casinos–$16.92; -0.23; optionable): Resorts and casinos.
STATUS: Cup w/handle. Another stock holding onto its recent gains as the market sold last week. STN is in the handle of a 5-month base. Volume surged as STN ran up and formed the right side of its base in September, and now it has backed off the past two weeks as it has moved laterally and slightly lower as the 10 day MVA (16.64) comes up to meet it. Accumulation is excellent at 5 up weeks on rising volume to just 1 down week on rising volume. Outstanding base; we will now see if it can make the breakout for us.
Volume: 351.1K Avg Volume: 396.501K.
BUY POINT: $17.62 Volume=600K Target=$12.45 Stop=$16.39.
POSITION: STN DC – April $15c (86 delta) and/or Stock.
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Learn more about our Technical Trader Report!
http://www.investmenthouse.com/1tech1.htm
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4) Covered Call Play
FDX – Federal Express Corp. is currently trading at $51.06. The November $50 Calls (FDXKJ) are trading at $3.50. That provides a return of about 5% if FDX is above $50 on expiration Friday in November.
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Learn more about our Covered Calls Service!
http://www.investmenthouse.com/1coveredcalls1.htm
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5) IPOs
Plains Exploration and Production Co., an independent oil and gas company, on Friday said it plans to float 5 million shares to the public in a proposed initial stock offering.
The Houston-based company did not provide an estimated price range for the IPO but said assuming $13 per share, the company could raise $58.9 million in net proceeds.
This IPO column is continued at:
http://www.investmenthouse.com/1ipo.htm
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Scottrade: Ranked Highest in Customer Satisfaction 3 times! Apply now!
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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.
