Weekend Issue for November 10, 2002
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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
http://www.investmenthouse.com/weekend/111002.htm
1) MARKET SUMMARY
Despite healthcare woes, market acts relatively tranquil.
– Healthcare gets whacked, but the rest of the market drifts toward support on lighter volume.
– Earnings mostly over but WMT, AMAT, DELL to report.
– Market setting up for the next move up.
– 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).
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.
ACDO (Accredo Health–$53.68; -1.75; optionable): Health services. Splits 3:2 on 12-3-02.
STATUS: Testing the breakout. ACDO announced the split and some good earnings and jumped over the 200 day MVA (51.01) Wednesday. Friday it started back, testing the 200 day MVA on the low and then rebounding. We think it will try to snug up toward the 200 day a bit more before it starts its next run.
Volume: 852.504K Avg Volume: 752.875K
BUY POINT: After a test down toward 51: 52.55 (aggressive). Then $54.25 Volume=1M Target=$62 Stop=$50.45
POSITION: DZU BK – Feb. $55c (55 delta) and/or Stock.
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Learn more about our Stock Split Report – Forbes.com Best of the Web Online Edition says: “. . . seek out the Stock Split Report . . .”
http://www.investmenthouse.com/1stocksplits1.htm
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3) Technical Play
MXIM (Maxim Integrated–$33.37; -0.82; optionable): Semiconductors.
STATUS: Testing the 10 day MVA. MXIM surged Monday and then spent Thursday and Friday filling the gap up, coming to rest Friday right on the 10 day MVA at the close. Volume spiked up to well above average as it showed a ‘hammer’ doji on the test lower. Money flow has shot up ahead of the stock, and is holding up well on this pullback. Accumulation leads 5 up weeks on rising volume to 3 down weeks on rising volume. Ready to move up with the Nasdaq.
Volume: 12.194M Avg Volume: 9.997M
BUY POINT: $34.25 Volume=12M Target=$41.25 Stop=$31.85
POSITION: XIQ BF – Feb. $30c (69 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
VZ – Verizon Wireless is currently trading at $38.68. The December $37.5 Calls (VZLU) are trading at $3.20. That provides a return of about 6% if VZ is above $37.5 on expiration Friday in December.
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Learn more about our Covered Calls Service!
http://www.investmenthouse.com/1coveredcalls1.htm
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5) IPOs
Shares of WellChoice Inc. (WC.N), the New York area provider of Blue Cross and Blue Shield health coverage, rose on Friday in its market debut after investors bid up the price of the insurance provider’s initial public stock offering.
Shares in the New York-based company rose as much as 10 percent to $27.50 in midday trade on the New York Stock Exchange. WellChoice raised $417 million in its IPO late Thursday, after selling more shares at a higher price per share than had been expected.
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.
