Weekend Newsletter for December 12, 2004
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Weekend Newsletter for December 12, 2004
Table Of Contents 1) MARKET SUMMARY 2) PRE-SPLIT PLAY 3) TECHNICAL PLAY 4) COVERED CALL PLAY
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http://www.investmenthouse.com/1splitnotification.htm”>Stock Split Notices http://www.investmenthouse.com/1questions.htm”>Investing Q & As http://www.investmenthouse.com/1glossary.htm”>Glossary
1) MARKET SUMMARY
Investors leave stocks status quo into the weekend.
– Stocks remain mired in the mud after falling back into the range midweek.
– OPEC promises production cut, oil price falls.
– Producer prices still climbing but consumer sentiment higher.
– Layoffs continue in large corporate America.
– Resting for the next move higher versus running out of gas.
– Christmas run part two or epilogue?
http://www.investmenthouse.com/1weekendmarketsummary.htm”>Read Full Weekend Summaryhttp://www.investmenthouse.com/1daily1.htm”>Learn more about our Daily Newsletter with Stock Picks! – Issued 5 Times Per Week
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.http://www.investmenthouse.com/1stocksplits1.htm” target=”_top”>http://www.investmenthouse.com/images2/cnbc.gif” width=”39″ height=”31″ border=”0″ alt=”CNBC Interview”>
Listen to Stock Split Report Editor Jon Johnson’s stock split interview on CNBC-TV![ http://www.investmenthouse2.com/cntdir.asp?name=JonJohnson-B” target=”_new”>Broadband | http://www.investmenthouse2.com/cntdir.asp?name=JonJohnson-D” target=”_new”>Dial-up ]
Chart by http://www.stockcharts.com”>StockCharts.com
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http://investmenthouse.com/quote/stkquote.php3?smbl=
LCAV”>
LCAV (LCA-Vision–$34.70; +0.54; optionable): Laser vision clinics. Splits 3:2 on 12-16-04.
http://biz.yahoo.com/p/l/lcav.html”>Company Profile
STATUS: Breakout test. Taking another run at LCAV as it has set up well for its run into the split. It is making the first test of the breakout from its 24 week reverse head and shoulders base. A nice lateral move above the 18 day EMA (33.29) is narrowing as LCAV moves higher up that support below a constant top the past week at 34.95. It splits next week, and the pattern looks good to get some upside momentum to break it out moving in to the split.
Volume: 163.605K Avg Volume: 276.103K
BUY POINT: $35.11 Volume=350K Target=$41 Stop=$33.82
POSITION: JVQ CG – Mar. $35c (54 delta) &/or Stock.
http://www.investmenthouse.com/1stocksplits1.htm”>Learn more about our Stock Split Report – Issued 5 Times Per Week
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3) Technical Playhttp://investmenthouse.com/quote/stkquote.php3?smbl=
SGMS”>
SGMS (Scientific Games–$23.81; +0.43; optionable): Hardware for insta-ticket lotteries and pari-mutuel wagering industry.
http://biz.yahoo.com/p/s/sgms.html”>Company Profile
After Hours: $23.81
STATUS: Breakout test. SGMS is moving in a 6 week ascending triangle above the 18 day EMA (23.08) after the early November breakout from its 7 month reverse head and shoulders base. Excellent 10 to 4 accumulation in the base shows a lot of net buyers setting the foundation for the breakout move. It has made the breakout and is not giving back the gains, a sign of strength. Volume jumped back above average Friday as the stock rallied toward the breakout. Strong money flow and relative strength is ready to breakout as well, a good corroboration of the move. Ready to make the breakout, and the first breakout test is one of our favorite entry points.
Volume: 924.063K Avg Volume: 747.855K
BUY POINT: $24.25 Volume=1.1M Target=$29 Stop=$23.25
POSITION: TUJ DX – Apr. $22.50c (71 delta) &/or Stock.
http://www.investmenthouse.com/1tech1.htm”>Learn more about our Technical Traders Report – Issued 5 Times Per Week Chart by http://www.stockcharts.com”>StockCharts.com
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4) Covered Call Playhttp://investmenthouse.com/quote/stkquote.php3?smbl=
CRS”>
CRS – Carpenter Technology Corp. is currently trading at $55.04. The January $55 Calls (CRSAK) are trading at $3.20. That provides a return of about 6% if CRS is above $55 on expiration Friday in January.
http://biz.yahoo.com/p/c/crs.html”>Company Profile
http://www.investmenthouse.com/1coveredcalls1.htm”>Learn more about our Covered Call Tables – 8 Tables Updated 5 Times Per Week
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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 asscociated 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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