Weekend Newsletter for February 20, 2005
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Weekend Newsletter for February 20, 2005
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
Stocks wade through tough week, giving up some ground but hold hanging in the pattern.
– Market closes the week quietly, holding the line for next week.
– Core PPI rattles stocks, sends bonds lower.
– How powerful are interest rate hikes?
– National sales tax or a flat income tax versus current system
– Price patterns set to rebound but volume, breadth and new highs have lagged.
– CPI will tell more about Fed as market deals with important level.
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=
VMSI”>
VMSI (Ventana Medical Sys.–$69.93; +0.07; optionable): Medical instruments. Splits 2:1 on 3-15-05.
http://finance.yahoo.com/q/pr?s=vmsi”>Company Profile
After Hours: $69.86
STATUS: Flying plateau. VMSI broke out from a 5 month flat base in late October and rallied to 65 before it needed a rest. It sold back to the 50 day EMA (65.42) to take the rest and then rebounded back for another move up the short term MA (10 and 18 day EMA); strong stocks show this kind of action when they make their breakouts. This is VMSI’s second test of the 18 day EMA (68.99) since testing the 50 day. Volume has been very low, indicating no selling in the shares as it consolidates at this near support. Looking for volume to jump as it makes a move out of this nice lateral consolidation.
Volume: 99.263K Avg Volume: 138.454K
BUY POINT: $71.12 Volume=150K Target=$77.45 Stop=$69.78
POSITION: UMI FN – June $70c (55 delta).
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=
AFFX”>
AFFX (Affymetrix–$41.23; -0.32; optionable): Genetic analysis systems.
http://finance.yahoo.com/q/pr?s=artc”>Company Profile
STATUS: Flying plateau. AFFX shot higher to end January on some excellent earnings. That move blasted it out of a 10 month cup with handle base, sending the stock up to 43 on the move. It has spent the past three weeks working laterally, consolidating the move but refusing to give much of it up as it holds the 18 day EMA (40.79) on the intraday lows. Accumulation in the base was an outstanding 13 to 3 (13 up price weeks on rising volume to 3 down price weeks on rising volume), showing solid buying and setting up the breakout and run higher. This first test of a breakout is one of our favorite entry points. Excellent money flow, and a relative strength breakout on the surge shows the stock has staying power. Looking for a break higher through the buy point on some good trade to move in. A perennial leader and it is doing just that once more.
Volume: 547.047K Avg Volume: 1.059M
BUY POINT: $42.65 Volume=1.6M Target=$50 Stop=$40.68
POSITION: FIQ HH – Aug. $40c (63 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=
SRNA”>
SRNA – Serena Software, Inc. is currently trading at $22.63. The March $22.5 Calls (NHUCX) are trading at $1.35. That provides a return of about 6% if SRNA is above $22.5 on expiration Friday in March.
http://finance.yahoo.com/q/pr?s=srna”>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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