Weekend Newsletter for February 29, 2004
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
$7 Trades at Scottrade.com with NO inactivity fees! FREE access to real-time streaming Dow Jones News, quotes & charts to manage your portfolio! Over 9000 NO transaction fee Mutual Funds. 177+ offices nationwide. Apply now!
http://www.investmenthouse2.com/cntdir.asp?name=Scottrade
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Read this report online in full color with graphs at
http://www.investmenthouse.com/weekend/022904.htm
1) MARKET SUMMARY
NASDAQ clears 50 day MVA, at least for an hour.
– Market continues its character as NASDAQ, SOX fail 50 day MVA test.
– GDP revisions starting higher, manufacturing employment improving.
– Volume rises as NASDAQ churns, MVA crossover on SOX.
– Subscriber Questions.
http://www.investmenthouse.com/1weekendmarketsummary.htm?123 “> Click here or on link for our full Weekend Market Summary
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Try “The Daily” with no risk for 2 weeks!
http://www.investmenthouse.com/1daily1.htm
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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.
EXC (Exelon–$67.14; +0.64; optionable): Utility holding company. Splits 2:1 on 3-11-04.
STATUS: Flat base. Volume is jumping as EXC moves to break from its 8 week lateral move over the 50 day MVA (65.55). Accumulation is excellent at 3 to 0 (3 up price weeks on rising volume to 1 down price week on rising volume). That accumulation with the base holding over the 50 day shows there is some big money support. Money flow is strong as well, and we are looking for the volume to continue and EXC to break out from this base on another good surge. That is when we move in.
Volume: 1.656M Avg Volume: 1.118M
BUY POINT: $67.38 Volume=1.2M Target=$71.38 Stop=$65.88
POSITION: EXC GM – July $65c (77 delta).
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
3) Technical Play
MAXM (Maxim Pharmaceuticals–$9.56; +0.22; no options): Drugs
STATUS: 50 day MVA test. Another stock that has made us money in the past and is setting up to do so again. After a strong December and January run it peaked at 10.59 and has fallen back the past 5 weeks to the 50 day (9.04). Volume has surged the past three sessions as it starts up off the 50 day. Accumulation is 2 to 0 thus far in the base; very good for this early in the base.
Volume: 317.723K Avg Volume: 144.889K
BUY POINT: $9.94 Volume=300K Target=$11.95 Stop=$9.38
POSITION: – Stock (no option chain).
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Learn more about our Technical Trader Report!
http://www.investmenthouse.com/1tech1.htm
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
4) Covered Call Play
APCC – American Power Conversion Corp. is currently trading at $22.62. The April $22.5 Calls (PWQDX) are trading at $1.35. That provides a return of about 6% if APCC is above $22.5 on expiration Friday in April.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Learn more about our Covered Calls Service!
http://www.investmenthouse.com/1coveredcalls1.htm
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
$7 Trades, NO Inactivity Fees at Scottrade. Get started with just $500!
http://www.investmenthouse2.com/cntdir.asp?name=Scottrade$7a
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
BOOK STORE SPECIAL OFFERS!
We are now offering “Special Offers” each week in our Book Store! You will not find these specials on our web site. They are only available by clicking the link below in this Weekend Newsletter!
http://www.investmenthouse2.com/cntdir.asp?name=BookStoreSpecials
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 – 2004 by Online Investment Services, LP. – All Rights Reserved.
