Weekend Newsletter for June 1, 2003
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
$7 Online Market Orders at Scottrade, where there’s never pressure to
trade because there are NO Inactivity Fees. Get started with just $500!
Switch to Scottrade today and take advantage of these values and more!
http://www.investmenthouse2.com/cntdir.asp?name=Scottrade
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Read this report online in full color with graphs at
http://www.investmenthouse.com/weekend/060103.htm
1) MARKET SUMMARY
Volume surges as SP500 on the brink of a higher high.
– Strong surge caps strong week.
– Finally a business pickup even as the consumer wanes?
– Market surges in the face of growing concern about the rally.
– 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.
NCEN (New Century Financial–$46.8; +1.34; optionable): Mortgage investment. Splits 3:2 on 7-14-03.
STATUS: Flying plateau. NCEN broke out from a 2.5 month cup with handle base in April, rallied up the short term MVA 4 times, and then came back to test the 50 day MVA (38). From there it gapped higher two Thursday’s back on huge volume and has formed the current lateral move the past week as volume trailed off. The 10 day MVA (44.50) is coming up to meet the stock, and when it does we anticipate a new break higher for the next leg. After the 50 day MVA test, the slate is clean for another run up the short term MVA. Excellent money flow and a relative strength breakout.
Volume: 382.065K Avg Volume: 652.821K
BUY POINT: $47.25 Volume=700K Target=$54.35 Stop=$43.94
POSITION: URE HI – Aug. $45c (62 delta) &/or Stock.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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
ICOS (Icos Corp.–$31.65; +0.62; optionable): Drug manufacturer.
STATUS: Testing the breakout. ICOS broke out of a 6-month reverse head and shoulders 5 sessions back on a strong volume surge. The pattern showed solid accumulation, and this test is on lower volume as it should be, showing that those that just bought the stock are not eager to sell it on this pullback. It is holding well above the neckline at 28 and the 10 day MVA (30), a sign of its strength as it shows a very tight doji Friday. That indicates the pullback may be over, and we are looking for a higher volume move back up to enter.
Volume: 3.064M Avg Volume: 1.858M
BUY POINT: $32.05 Volume=2.8M Target=$38.38 Stop=$29.81
POSITION: IIQ JF – Oct. $30c (63 delta) &/or Stock.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Learn more about our Technical Trader Report!
http://www.investmenthouse.com/1tech1.htm
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
4) Covered Call Play
QCOM – Qualcomm, Inc. is currently trading at $33.53. The July $32.5 Calls (AAWGZ) are trading at $2.40. That provides a return of about 4% if QCOM is above $32.5 on expiration Friday in July.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Learn more about our Covered Calls Service!
http://www.investmenthouse.com/1coveredcalls1.htm
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
5) IPOs
Mark Twain gets the credit, whether he deserves it or not, for being fond of saying: “Reports of my death are premature.” The same can be said of the IPO market this year. It’s been quiet. But it’s not dead.
This IPO column is continued at:
http://www.investmenthouse.com/1ipo.htm
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Switch to Scottrade today and take advantage of savings and value!
$7 Online Market Orders at Scottrade. Trade when you’re ready:
there are NO Inactivity Fees. Get started with just $500! Apply now!
http://www.investmenthouse2.com/cntdir.asp?name=Scottrade$7
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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 – 2003 by Online Investment Services, LP. – All Rights Reserved.
