COF - Capital One Financial $71.00 +0.50 (+0.94)

The pre-earnings run seems to be alive and well for Capital One Financial. COF is a holding company whose subsidiaries provide a variety of products and services to consumers using its proprietary information-based strategy. These services are offered through Capital One Bank, a limited-purpose state chartered credit card bank, which offers credit card products. On October 10th COF will report their earnings for the third quarter. Estimates are for a profit of 58 cents a share versus a profit of 39 cents a share in the same quarter last year. On Tuesday the investment firm of Legg Mason upgraded the stock to a "buy" rating. Just a couple weeks ago the folks at Robertson Stephens initiated coverage with a long-term attractive rating. Intra-day, the stock hit a new high at $73.50 on 70%-increased volume of 1.7 million shares. Currently the company has 300 million shares authorized and could announce a 3:2 split with earnings. Looking at the chart, we now see that resistance will be measured at Tuesday's high at $73.25. Support for this stock is noted at the 5-dma at $70.31 and then at the 10-dma at $67.90. This will be a short-term momentum driven play with earnings only 5 trading days away. As a reminder to our new subscribers, it is our policy to never hold a position through earnings. Thus we will be exiting this play ahead of next Tuesday. If you are considering opening a position on COF, possible entry points might include a quick bounce off one of the support levels or a decided move through resistance on good volume. Look for confirming momentum in the INDU as well as the NYSE Financial Index (NF). In the event of a pre-earnings sell-off we will place a protective stop at $66.38 to limit our losses.

Picked on October 3rd @ $71.00 Change since picked 0.00

SDC - Sante Fe International $45.19 -0.31 (+0.25)

Our departing President succumbed to political pressure and attempted to ease the oil price surge by tapping our strategic oil reserves. This knee-jerk reaction to the powerful global economic forces had the desired effect, briefly. Now that oil prices are again on the rise, due in part to concerns about renewed middle-eastern political tensions, oil service stocks are moving again. Sante Fe is an offshore and land driller and they contract their services to the major petroleum companies. There is a complete lack of split history for Sante Fe. However, if the Company does decide to split, it certainly has enough authorized shares to execute a split. Earnings are two weeks away and although current estimates for profits of $0.26 are actually lower than the profits of $0.37 reported last year, the stock should still trade positively if oil prices keep rising. The stock has rallied quite nicely ever since it bounced off the 50-DMA two weeks ago. Now the 50-DMA is at $40.03, which should provide some very nice support. When the market is reeling, it is a good idea to try and find a stock that is actually making a new high. SDC briefly traded in new high ground today before pulling back but the trend is decidedly bullish. The MACD just turned positive again but be forewarned, the momentum of this indicator appears to be waning. The RSI has a little more room before another overbought condition is signaled. Money Flow could be the strongest technical indicator right now. Our initial stop is at $42.00, which is right at an intraday low from last week. We expect that SDC will continue to make small new highs until its earnings report on October 18th. If we are not stopped out, we will exit this position right before the earnings release.

Picked on October 3rd @ $45.19 Change since picked +0.00