Weekend Newsletter for March 23, 2002
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Read this report online in full color with graphs at
http://www.investmenthouse.com/weekend/032303.htm
1) MARKET SUMMARY
Market ramps higher as oil fires limited, ground troops advance, and missiles pound Iraq.
– Market rise shocking in awe over US military success.
– Consumer prices rise on energy spike, but that won’t last from the look of it.
– Indexes surge higher on expiration, war success, reaching the 200 day MVA.
– Team Trades.
http://www.investmenthouse.com/1weekendmarketsummary.htm?123 “> Click here or on link for our full Weekend Market Summary
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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.
FCN (FTI Consulting–$44.02; +0.02; optionable): Management services. Splits 3:2 on 5-7-03.
STATUS: Ascending triangle. FCN started moving out of its consolidation of the past three weeks, rallying Friday on much stronger, above average volume as this stock hit an all-time high on the action. It gave back a third of the move, so it was not a clean breakaway move. Still solid action and we are looking for FCN to kick off the next leg from here. Solid 10 to 6 accumulation in the bigger base. Still a buy at this point on a continued volume move.
Volume: 205.9K Avg Volume: 242.409K
BUY POINT: New: $44.88 (orig. $44.55; $42.96) Volume=400K Target=$48.38 Stop=$40.15
POSITION: FCN FH – June $40c (66 delta, low OI) &/or Stock.
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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
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3) Technical Play
SRNA (Serena Software–$16.35; +0.58; optionable): Business software
STATUS: Cup. SRNA has not progressed to the breakout point in its 3.5 month base, just now starting to surge up off the bottom that more or less used the 200 day MVA (14.40) as support. While we like breakouts, this stock is showing excellent accumulation at this point (5 to 1) as it starts to move higher and form the right side of the base. Volume has swelled to above average the past week. Friday volume shot higher as the stock cleared some interim resistance at 16. Money flow is shooting up ahead of the stock, leading it higher. We are looking to get on board as it continues its move higher.
Volume: 1.068M Avg Volume: 386.136K
BUY POINT: $16.48 Volume=700K Target=$19.75 Stop=$15.28
POSITION: NHU HC – Aug. $15c (67 delta) &/or Stock.
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Learn more about our Technical Trader Report!
http://www.investmenthouse.com/1tech1.htm
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4) Covered Call Play
NCEN – New Century Financial Corp. is currently trading at $30.65. The April $30 Calls (UREDF) are trading at $2.30. That provides a return of about 6% if NCEN is above $30 on expiration Friday in April.
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Learn more about our Covered Calls Service!
http://www.investmenthouse.com/1coveredcalls1.htm
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5) IPOs
J.P. Morgan Chase & Co. Inc. said on Wednesday the Securities and Exchange Commission has advised that it may bring disciplinary action against one of the company’s units related to initial public offering allocations.
J.P. Morgan said it sent the SEC staff a letter disputing the need for action against its J.P. Morgan Securities Inc. unit and the two sides were in talks, according to the No. 2 U.S. banking company’s annual report filed with the SEC.
This IPO column is continued at:
http://www.investmenthouse.com/1ipo.htm
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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 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.
