Weekend Newsletter for November 7, 2004
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Weekend Newsletter for November 7, 2004
Table Of Contents 1) MARKET SUMMARY 2) PRE-SPLIT PLAY 3) TECHNICAL PLAY 4) COVERED CALL PLAY
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http://www.investmenthouse.com/1splitnotification.htm”>Stock Split Notices http://www.investmenthouse.com/1questions.htm”>Investing Q & As http://www.investmenthouse.com/1glossary.htm”>Glossary
1) MARKET SUMMARY
Jobs provide additional good news to stocks.
– Jobs surge sends stocks higher once more to cap a very strong two weeks.
– Traditional jobs turn sharply higher on hurricane recovery.
– Consumers keep the credit cards smoldering.
– SP500 tests very important resistance, retreats to regroup as the quality of the move weakens.
– Stocks in another confirmed rally, but you still have to pick your entry points, particularly after such a spectacular move.
http://www.investmenthouse.com/1weekendmarketsummary.htm”>Read Full Weekend Summaryhttp://www.investmenthouse.com/1daily1.htm”>Learn more about our Daily Newsletter with Stock Picks! – Issued 5 Times Per Week
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.http://www.investmenthouse.com/1stocksplits1.htm” target=”_top”>http://www.investmenthouse.com/images2/cnbc.gif” width=”39″ height=”31″ border=”0″ alt=”CNBC Interview”>
Listen to Stock Split Report Editor Jon Johnson’s stock split interview on CNBC-TV![ http://www.investmenthouse2.com/cntdir.asp?name=JonJohnson-B” target=”_new”>Broadband | http://www.investmenthouse2.com/cntdir.asp?name=JonJohnson-D” target=”_new”>Dial-up ]
Chart by http://www.stockcharts.com”>StockCharts.com
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http://investmenthouse.com/quote/stkquote.php3?smbl=
TASR”>
TASR (Taser–$46.49; -0.32; optionable): Stun guns. Splits 2:1 on 11/30.
http://biz.yahoo.com/p/t/tasr.html”>Company Profile
STATUS: Ascending triangle. TASR was one of the latest examples of a blow off top when it screamed higher October 2003 to April 2004 in a frenzied scramble higher that saw the stock rise over 600%. It gave back almost two-thirds of its value at the peak in about three weeks. From there it has worked laterally, holding a constant top near 45 as it made higher and higher lows, first using the 200 day SMA (33.07) and most recently the 18 day EMA (41.60). It tried to move higher through resistance to end October, but faded. It managed to hold and make a higher low, however, and then broke higher Thursday on news of a split. Friday it held steady on lower volume, but with solid 9 to 5 accumulation in the base (9 up price weeks on rising volume to 5 down price weeks on rising volume) we see net buyers, quietly accumulating the stock. Looking for volume to remain strong as it breaks higher through the buy point in a pre-split run.
Volume: 14.236M Avg Volume: 6.783M
BUY POINT: $47.24 Volume=10M Target=$57.95 Stop=$44.88
POSITION: QUR CW – Mar. $47.50c (58 delta) &/or Stock.
http://www.investmenthouse.com/1stocksplits1.htm”>Learn more about our Stock Split Report – Issued 5 Times Per Week
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Chart by http://www.stockcharts.com”>StockCharts.com
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3) Technical Playhttp://investmenthouse.com/quote/stkquote.php3?smbl=
AVO”>
AVO (Advanced Medical Optics–$41.28; +1.28; optionable): Medical instruments.
http://biz.yahoo.com/p/a/avo.html”>Company Profile
STATUS: Double bottom. Volume started higher to end last week as AVO started toward the breakout from its 17 week base that formed at the 50 day EMA (38.40). Accumulation in the base is a strong 7 to 3 (7 up price weeks on rising volume to 3 down price weeks on rising volume), showing many more buyers than sellers and setting the foundation for the next breakout and run. Money flow is strong as well, rallying higher ahead of price. Looking to move in on a continued volume rise from here.
Volume: 580K Avg Volume: 443.12K
BUY POINT: $41.55 Volume=665K Target=$49.88 Stop=$39.24
POSITION: AVO DH – Apr. $40c (64 delta) &/or Stock.
http://www.investmenthouse.com/1tech1.htm”>Learn more about our Technical Traders Report – Issued 5 Times Per Week Chart by http://www.stockcharts.com”>StockCharts.com
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4) Covered Call Playhttp://investmenthouse.com/quote/stkquote.php3?smbl=
ANF”>
ANF – Abercrombie & Fitch Co. is currently trading at $42.67. The December $42.5 Calls (ANFLV) are trading at $2.05. That provides a return of about 5% if ANF is above $42.5 on expiration Friday in December.
http://biz.yahoo.com/p/a/anf.html”>Company Profile
http://www.investmenthouse.com/1coveredcalls1.htm”>Learn more about our Covered Call Tables – 8 Tables Updated 5 Times Per Week
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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 asscociated herewith receives compensation in any manner from any of the companies that are discussed in this newsletter or on the related websites.
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