Weekend Newsletter for September 7, 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/090703.htm
1) MARKET SUMMARY
Jobs report disappoints as anticipated, but market does not cave.
– Rally shows some wear, but holds up remarkably well given the employment report.
– Why the conventional wisdom is wrong and is missing the crucial and exciting dynamic emerging in the job market during this economic recovery. Structural job change? You bet and it is something fantastic.
– Market readies for a pullback as talk of valuation again emerges, but stocks are holding up well.
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.
SAFE (Invivo–$23.6; +1.29; no options): Medical appliances. Splits 3:2 on 9-29-03
STATUS: 10 day MVA bounce. A bit more thinly traded than we usually look for, but it is showing excellent momentum and volume. After a surge off the 18 day MVA two weeks back it has tested the 10 day MVA (22.27) and shot up Friday on a volume surge. These are momentum plays and we are looking to get in on the move. It is a good sector as well as the techs take a breather. Strong money flow and a relative strength breakout. Remember, the object of these plays is to see the move occurring, get in, let it work for you until it shows a topping sign (e.g., a doji after a run higher), then take the gain.
Volume: 40.03K Avg Volume: 22.272K
BUY POINT: $23.75 Volume=40K Target=$26.75 Stop=$22.25
POSITION: – Stock (no option chain).
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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
CBST (Cubist Pharmaceuticals–$13.51; +0.52; optionable): Drugs
STATUS: Ascending triangle. CBST is moving toward the breakout from its 11 week base showing excellent 4 to 1 accumulation (4 up price weeks on rising volume to 1 down price week on rising volume). It is making a series of higher and higher lows as the top of the range holds near 13.75; the characteristic action that builds pressure from below. Breakouts can be explosive. Friday CBST was attempting the move on a big volume blast, but it gave back much of the gain late in the sesion as the market stumbled. Just being patient and waiting for the next volume breakout move.
Volume: 1.055M Avg Volume: 459.09K
BUY POINT: $13.89 Volume=550K Target=$16.67 Stop=$12.88
POSITION: UTU AV – Jan. $12.50c (66 delta) &/or Stock.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Learn more about our Technical Trader Report!
http://www.investmenthouse.com/1tech1.htm
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
4) Covered Call Play
PETM – PetsMart, Inc. is currently trading at $22.81. The October $22.5 Calls (QPTJX) are trading at $1.30. That provides a return of about 5% if PETM is above $22.5 on expiration Friday in October.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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.
