Weekend Newsletter for March 9, 2003
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Read this report online in full color with graphs at
http://www.investmenthouse.com/weekend/030903.htm
1) MARKET SUMMARY
The news was bad but the market shrugged it off.
– Impressive recovery as investors sort through more news and cover ahead of any weekend surprises.
– Jobs report impressive in its weakness.
– Energy recession seems baked in the cake if no further stimulus for business investment.
– Indexes have set up a short double bottom to try and start something much bigger.
– Subscriber Questions.
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.
ANPI (Angiotech Pharmaceutical–$40.2; +1.81; optionable): Drug manufacturer
STATUS: Breakout. In a defensive market drug and medical stocks are considered safe havens, and we have seen these stocks form up and start good moves. ANPI had been in a serious downtrend for a year, but in late February it broke that downtrend, tested that break in early March with a move down to the 18 day MVA (37.90), and then blasting higher Friday on a big volume surge. We really like to see successful breakout tests as they show the stock has plenty of support to survive some selling on post-breakout profit taking as well as drive it back up. Solid move and we are looking to get on board.
Volume: 291.226K Avg Volume: 103.736K
BUY POINT: $40.33 Volume=156K Target=$45.85 Stop=$37.96
POSITION: AUJ FH – April $40c (55 delta) &/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
MME (Mid-Atlantic Medical–$37.35; -0.4; optionable): Health care plans
STATUS: Cup. MME made us some great money back in 2002, but after that strong run it has droopped back to work on the current 5-month cup base it is in the process of forming. Specifically MME has started to surge higher off the low near 30, forming the right side of the base. We know that this stock has a lot of pop to it and can run well. That is why we are looking at some positions here to take advantage of a strong run up to the high near 43 before MME forms a handle. That is why we are looking at options on this play for now, and when it forms a handle we can move in with some stock on a breakout. Accumulation is outstanding during the base at 5 up weeks on rising volume to just 1 down week on rising volume.
Volume: 551.2K Avg Volume: 483.811K
BUY POINT: $38.05 Volume=725K Target=$42.85 Stop=$35.74
POSITION: MME FG – June $35c (67 delta).
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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
FLR – Fluor Corp. is currently trading at $30.21. The April $30 Calls (FLRDF) are trading at $1.65. That provides a return of about 5% if FLR 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
Not too long ago, a leading online financial media provider carried the sub-headline to its IPO story: “If five big IPOs materialize, more than $1 billion in fees could be up for grabs on Wall Street.”
Now that’s enough to catch anybody’s eye.
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.
