Weekend Issue for October 12, 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/101202.htm
1) MARKET SUMMARY
Market scores first up week in six with back-to-back gains.
– Second day of rallying spreads out a bit more.
– Economic news not any better but market ignores it ala 1974.
– Indexes blow past 18 day MVA resistance on lower volume, but it is too early for claimed ‘follow through.’
– 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).
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.
CPBI (CPB, Inc.–$46.23; +0.59; no options): Regional bank. Splits 2:1 on 11-12-02.
STATUS: While most regional banks are in the trash heap, CPBI is finishing the handle to a 4-month cup. This is a very low volume stock with no options, but when it moves it can give $6 to $8 runs over a few weeks. It is building pressure in the pattern, and a breakout sends it to a new high with no overhead resistance.
Volume: 4.1K Avg Volume: 26.247K.
BUY POINT: $46.41 Volume=25K Target=$52.45 Stop=$43.16.
POSITION: Stock (no option chain).
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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
JOSB (Joseph A. Banks–$20.3; +0.78; no options): Apparel stores.
STATUS: Cup/testing the 50 day MVA (18.29). A rather wilder pattern over the past 5 months as it works through a cup that has had a few false starts. The most recent was in September where it peaked at 23 and fell back. It is now making another move up the right side of the base, garnering higher, above average volume Thursday and Friday as it moved off of the 50 day MVA. We are looking to pick the stock up on further gains and ride it to the former high at 24 as a first target, but will let it work for us from there as well. Accumulation is solid at 5 up weeks on rising volume to 3 down weeks on rising volume.
Volume: 121.791K Avg Volume: 102.782K.
BUY POINT: $20.75 Volume=157K Target=$24 Stop=$19.3.
POSITION: Stock (no option chain).
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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
PIR – Pier 1 Imports Inc. is currently trading at $18.45. The November $17.5 Calls (PIRKW) are trading at $1.70. That provides a return of about 4% if PIR is above $17.5 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
Hornbeck Offshore Services Inc., an owner and operator of deepwater offshore supply vessels serving the oil and gas industry, on Friday canceled its planned initial public offering, citing market conditions.
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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Bookstore FIRESALE!
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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.
