Weekend Newsletter for May 4, 2003
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Read this report online in full color with graphs at
http://www.investmenthouse.com/weekend/050403.htm
1) MARKET SUMMARY
Market was set to rally.
– Poor employment report fails to stall high volume gain.
– Job losses, non-government GDP smack of recession.
– DJ30 breakout follows Dow transports higher, fulfilling some Dow Theory bull market requirements.
– 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.
ZQK (Quicksilver–$33.22; +1.22; optionable): Youth sports clothing. Splits 2:1 on 5-9-03
STATUS: Testing the 18 day MVA. Up off the 18 day MVA (31.60) Friday on lower, below average volume. Starting the pre-split move, we are not too concerned about volume. Looking for more positions on a further move higher. Would like to see more volume.
Volume: 248.9K Avg Volume: 352.318K
BUY POINT: $33.55 (orig. $32.45) Volume=350K Target=$36.55 Stop=$31.25
POSITION: ZQK FF – June $30c (70 delta) or ZQK HF – Aug. $30c (67 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
CHINA (Chinadotcom–$5.01; +0.19; no options): Foreign internet
STATUS: Testing the breakout. Friday the smaller and foreign internets started back to life with CHINA moving up off of its 10 day MVA (4.75) on a strong shot of above average volume. These stocks have led in the market as it moved higher, and it looks as if they are ready to take the lead again.
Volume: 994.6K Avg Volume: 825K
BUY POINT: $5.06 Volume=1.1M Target=$6.12 Stop=$4.71
POSITION: – Stock (no option chain).
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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
DRL – Doral Financial Corp. is currently trading at $40.25. The June $40 Calls (DRLFH) are trading at $1.80. That provides a return of about 4% if DRL is above $40 on expiration Friday in June.
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Learn more about our Covered Calls Service!
http://www.investmenthouse.com/1coveredcalls1.htm
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5) IPOs
The answer to the question, “When is an IPO not an IPO?” is this: When investment bankers offer American Depositary Shares or common stock to U.S. investors of foreign-based companies whose shares are already trading in their home markets, those offerings in the United States are NOT IPOs.
This IPO column is continued at:
http://www.investmenthouse.com/1ipo.htm
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A legendary pulls back the curtain on stock options–the fastest path to life-changing wealth–and reveals the strategies of successful investors.
Click Here: http://www.investmenthouse2.com/cntdir.asp?name=ReadOn
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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
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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.
