Weekend Newsletter for October 5, 2003

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Free Weekend Newsletter for October 5, 2003

TABLE Of Contents 1) MARKET SUMMARY 2) PRE-SPLIT PLAY 3) TECHNICAL PLAY 4) COVERED CALL PLAY http://www.investmenthouse.com/cgibin/banners2/ads.pl?banner=NonSSI;page=31″ target=”_top”>http://www.investmenthouse.com/cgibin/banners2/ads.pl?page=31″border=”0″ ALT=”$7 Trades!”>
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http://www.investmenthouse.com/1splitnotification.htm”>Free Stock Split Notices http://www.investmenthouse.com/1questions.htm”>Investing Q & As http://www.investmenthouse.com/1glossary.htm”>Glossary

1) MARKET SUMMARY
Economy beats the odds, starts growing jobs ahead of schedule.

– Jobs surprise comes 3 months early, spikes the market.
– Can we put any faith in the jobs report given all of the other indicators?
– Market accumulates again but the finish was disappointing.
– Looking for another follow through session this week.
– Subscriber questions.

http://www.investmenthouse.com/1weekendmarketsummary.htm”>Click Here To Read Full Story.http://www.investmenthouse.com/1daily1.htm”>Try “The Daily” with no risk for 2 weeks!

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. Chart by http://www.stockcharts.com”>StockCharts.com
http://www.investmenthouse.com/cc/pscsm.gif”>
http://investmenthouse.com/quote/stkquote.php3?smbl=
PSC”>
PSC (Philadelphia Suburban–$24.73; +0.24; optionable): Water utility. Splits 5:4 on 12-2-03.
http://biz.yahoo.com/p/p/psc.html”>Company Profile
STATUS: Cup w/handle. Not really sexy, but utilities of all types have been setting up good patterns. PSC is in the process of breaking out of a 3.5 month base sporting excellent 5 to 1 accumulation. Friday it was moving well but there was not breakout caliber volume. On pre-splits we don’t worry too much about that, but as this is a pattern that proves itself with a volume breakout, we want to see the volume spike up on a further move.
Volume: 141.7K Avg Volume: 210.3K
BUY POINT: $24.94 Volume=210K Target=$28.75 Stop=$24.26
POSITION: PSC LX – Dec. $22.50c (99 delta) &/or Stock.
http://www.investmenthouse.com/1stocksplits1.htm”>Click here for more information on our Stock Split Report!

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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=
BRCM”>
BRCM (Broadcom–$28.79; +1.79; optionable): Semiconductor integrated circuits.
http://biz.yahoo.com/p/b/brcm.html”>Company Profile
STATUS: Cup w/handle. We saw BRCM Thursday and considered it for the report but decided to wait another session. The news Friday broke it higher with a big gap on strong, above average volume. That was a good compliment to the solid 4 to 2 accumulation in the base (4 up weeks on rising volume to 2 down weeks on rising volume). Even with the strong move it is well within the buy range on this move, having come back from the session high (29.20) to close, though still maintaining much of the gain. Solid action in the 12 week base, and looking for positions on a further move higher on this breakout.
Volume: 13.948M Avg Volume: 13.125M
BUY POINT: $29.25 Volume=20M Target=$35.12 Stop=$27.15
POSITION: RCQ AY – Jan. $27.50c (63 delta) &/or Stock.
http://www.investmenthouse.com/1tech1.htm”>Click here for more information on our Technical Traders Report! Chart by http://www.stockcharts.com”>StockCharts.com

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4) Covered Call Playhttp://investmenthouse.com/quote/stkquote.php3?smbl=
MIK”>
MIK – Michaels Stores, Inc. is currently trading at $43.03. The November $42.5 Calls (MIKKV) are trading at $2.65. That provides a return of about 5% if MIK is above $42.5 on expiration Friday in November.
http://biz.yahoo.com/p/m/mik.html”>Company Profile
http://www.investmenthouse.com/1coveredcalls1.htm”>Click here for more information on our Covered Calls Service!

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