Weekend Newsletter for October 12, 2003
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
$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/101203.htm
1) MARKET SUMMARY
Market holds status quo for next week.
– Market holds gains to close the week but misses a breakout opportunity.
– Retail upgrades abound Friday on heels of sales numbers as trade deficit shrinks.
– Resilient market holds its trend near September highs, looks ready for that near term higher low.
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.
JBLU (Jetblue Airways–$67.51; -2.75; optionable): Regional airlines. Splits 3:2 on 11-21-03.
STATUS: Testing the 10 day. JBLU has made a long, steady rally since breaking out to start the summer, using the 10 and 18 day MVA as support. It has yet to come back toward the 50 day MVA (56.94), though there are those who would like to see it there (downgraded to a sell by one brokerage on Friday). After the downgrade JBLU fell to the 10 day MVA (65.82) on the low and rebounded to recover some of the loss. Stronger stocks overcome downgrades. We expected JBLU to make a further move down toward the 10 day MVA again before it is ready to move back up. The upside trend has increased, always something to watch after a long run higher. Given that it is moving pre-split, however, this pullback is a good entry point if it can overcome the downgrade and rebound on solid trade. May not be another 30 point move like the pre-announcement play, but one that can make us some good money.
Volume: 3.348M Avg Volume: 1.292M
BUY POINT: Test the 10 day MVA at 65.82, then $66.12 on the way back up. Volume=1.9M Target=$76 Stop=$65.62
POSITION: JGQ AN – Jan. $70c (41 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
ANEN (Anaren–$14.18; +0.49; optionable): Microwave components for wireless communications.
STATUS: Ascending triangle. ANEN is showing great action, forming up a nice 5 week triangle, making higher and higher lows up the 18 day MVA (13.51). It is showing positive 2 to 1 accumulation in the pattern along with strong money flow and relative strength ready to deliver a breakout. Volume started to surge Thursday as it moved off the 18 day and then really jumped Friday as ANEN rose toward the breakout. Again, very good action; we really like the way it looks.
Volume: 250.46K Avg Volume: 94.745K
BUY POINT: $14.42 Volume=142K Target=$17.32 Stop=$13.41
POSITION: EVB AV – Jan. $12.50c (79 delta) &/or Stock.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Learn more about our Technical Trader Report!
http://www.investmenthouse.com/1tech1.htm
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
4) Covered Call Play
JCOM – j2 Global Communications, Inc. is currently trading at $45.25. The November $45 Calls (JQFKI) are trading at $4.60. That provides a return of about 11% if JCOM is above $45 on expiration Friday in November.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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 – 2003 by Online Investment Services, LP. – All Rights Reserved.
