Weekend Newsletter for April 20, 2003
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http://www.investmenthouse.com/weekend/042003.htm
1) MARKET SUMMARY
Techs provide the strength as earnings provide more upside fuel.
– Market rebounds from distribution with techs and chips leading again.
– Jobless claims rise again, Philly manufacturing sinks further.
– Market recovers but faces the same challenge.
– Breakout ahead or will the market get ‘tired’ of earnings.
– Subscriber Questions.
http://www.investmenthouse.com/1weekendmarketsummary.htm?123 “> 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.
LIZ (Liz Claiborne–$31.92; +0.72; optionable): Clothes
STATUS: Cup w/handle. Good volume surge Friday as LIZ moved off the 10 day MVA (31.30) on rising though still below average trade. A nice 4.5 month base showing positive 4 to 3 accumulation. Money flow is running up ahead of the price as consumer stocks are anticipating a stronger economy. Want to see a strong volume surge on a break over 32.
Volume: 523.7K Avg Volume: 583.272K
BUY POINT: $32.12 Volume=883K Target=$26.85 Stop=$30.48
POSITION: LIZ GF – July $30c (69 delta) &/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
CYBX (Cybertronics–$21.5; +0.86; optionable): Medical equipment
STATUS: Test breakout. CYBX has completed what looks to be a successful test of the breakout from a 7-month saucer base supported by solid 6 to 3 acccumulation (6 up weeks on rising volume to 3 down weeks on rising volume). The breakout point was at 20, and CYBX came back to test that level last week on lower volume and then started higher on rising volume. Thursday CYBX jumped off the 18 day MVA on a massive volume surge. That is a sign that the breakout test was successful. We are looking to pick up positions as it clears its breakout high. Very nice action.
Volume: 858.676K Avg Volume: 212.181K
BUY POINT: $22.06 Volume=325K Target=$26 Stop=$20.52
POSITION: QAJ GD – July $20c (67 delta) &/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
SRNA – Serena Software, Inc. is currently trading at $15.19. The May $15 Calls (NHUEC) are trading at $1.05. That provides a return of about 6% if SRNA is above $15 on expiration Friday in May.
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Learn more about our Covered Calls Service!
http://www.investmenthouse.com/1coveredcalls1.htm
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5) IPOs
Yes, Virginia, there IS an IPO market.
NETGEAR (Nasdaq: NTGR proposed) filed for an IPO on April 10, 2003. That was 37 days since the last S-1 filing. It was the March 5, 2003, filing of AXIS Capital Holdings (NYSE: AXS proposed).
This IPO column is continued at:
http://www.investmenthouse.com/1ipo.htm
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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.
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