Weekend Newsletter for March 14, 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/031404.htm
1) MARKET SUMMARY
Stocks surge higher but fail to attract real buying volume.
– Ferocious relief rally answers 5 straight distribution sessions.
– Michigan sentiment falls but not as much as feared, inventories edge higher.
– Still working on that bottom as SOX approaches its most important test.
– 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.
FOSL (Fossil–$33.50; +1.43; optionable): Watches, accessories, etc. Splits 3:2 on 4-9-04.
STATUS: Breakout test. FOSL exploded out of a 6 month flat base in late February, rallying to 35 in a tremendous surge. It has spent the past two weeks coming back to test the move, holding at near support on the 18 day MVA (32.41). Volume was low on the pullback until the end of the week when it hit support and rebounded. Excellent money flow leading higher and a relative strength breakout.
Volume: 299.062K Avg Volume: 228.468K
BUY POINT: $33.82 Volume=310K Target=$39 Stop=$32.35
POSITION: FUA FF – June $30c (83 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
STG (Stonepath Group–$3.91; +0.16; no options): Supply chain solutions
STATUS: Test 18 day MVA. STG broke out from a 7.5 month double bottom with handle base in late February and soared higher to 4.38. It is now coming back to test the breakout, holding over the 18 day MVA (3.73) on lower, below average volume. Accumulation is a solid 5 to 3 in the base and money flow is excellent, surging up ahead of price even as the stock pulled back on the test. Friday the stock was moving up off the 18 day MVA, following that money flow. Looking for the stock to follow the money and continue the breakout move.
Volume: 361.5K Avg Volume: 375.374K
BUY POINT: $4.04 Volume=563K Target=$5 Stop=$3.76
POSITION: – Stock (no option chain).
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Learn more about our Technical Trader Report!
http://www.investmenthouse.com/1tech1.htm
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
4) Covered Call Play
ISIL – Intersil Holding Corp. is currently trading at $22.63. The April $22.5 Calls (UFHDX) are trading at $1.50. That provides a return of about 6% if ISIL 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.
