Weekend Issue for November 3, 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/110302.htm
1) MARKET SUMMARY
Fourth up week ends with the start of a breakout.
– Working toward a very important breakout as a confluence of events is changing the landscape.
– Economic reports show little life, but again there are some important features.
– The indexes are still giving mixed signals but the scales are tipping again to the upside.
– Team Trades.
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.
COH (Coach–$31.4; +1.65; optionable): Handbags, etc.
STATUS: Testing the breakout. This is the move we were looking for as COH tested the breakout, held the 18 day MVA on the test, and then started back up on sharply higher, above average volume. This is a picture perfect test and recovery, and a good point to enter into new positions.
Volume: 1.176M Avg Volume: 1.016M
BUY POINT: New positions: 31.55 (orig. $30.25). Volume=1.5M Target=$36.35 Stop=$29.85
POSITION: COH BY – Feb. $27.50c (65 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
ARTI (Artisan Components–$13.84; +0.81; no options): Semiconductors
STATUS: Cup w/handle breakout. ARTI formed a very short handle last week and then shot higher Friday on some continued solid volume. Showing a lot of life as the semiconductors improve with positive accumulation since March. Accumulation has really picked up in the latter part of the base and money flow is up ahead of the price.
Volume: 177.554K Avg Volume: 85.582K
BUY POINT: $14.05 Volume=150K Target=$16.94 Stop=$13.07
POSITION: Stock (no option chain).
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Learn more about our Technical Trader Report!
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4) Covered Call Play
HLT – Hilton Hotels Corp. is currently trading at $12.64. The December $12.5 Calls (HLTLV) are trading at $1.05. That provides a return of about 8% if HLT is above $12.5 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
China Telecom (0728.HK)(CHA.N) will likely set the revised terms of its huge, delayed initial public offering over the weekend, sources said on Friday.
Many market insiders expect the size of the IPO, which would have been the world’s third largest this year, to be slashed, and some fund managers are also clamouring for a lower price.
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.
