| |
Email Version, Section 1, Wednesday, 08/31/2000
The SplitTrader.com Newsletter Thursday 08/31/2000 1 of 1
Copyright 2000, All rights reserved.
Redistribution in any form is strictly prohibited.
- Your World Leader for Trading Stock Splits on the Internet -
Posted online for members at: http://www.SplitTrader.com
================================================================
Contact Us!
Send questions or comments to: stcomments@splittrader.com
To stop receiving this SplitTrader Update,
send email to: removeST@splittrader.com
=================================================================
In This Newsletter:
===================
Market Commentary Enthusiasm High in Front of Labor Report
Definition of the Day
Thursday's Split Announcements LSCC
Sector Watch - Breakdown by sector of market performance.
Friday's Expirations
Friday's Play-of-the-Day - RIMM
Stock Plays - New - Updates - Drops
==================================================================
Market Commentary
=================
Enthusiasm High in Front of Labor Report
Mid-caps, Big caps, Small Caps, heck, nearly ALL CAPS had a great
day Thursday. Most sectors enjoyed gains on solid volume after
Thursday's economic reports came in market-friendly.
Stocks seem to be moving on macroeconomic factors and the most
recent reports are indicating that the economy is growing at a
steady but slower rate. Before the market open, weekly jobless
claims, Chicago PMI and July Factory Orders were reported. Each
came in below consensus expectations. Since perceptions are
fleeting, today's news effectively cancelled out the memory of
the strong New Home Sales report of Tuesday.
Buyers repeated a pattern we have seen before: a strong day in
front of Friday's bi-weekly Labor Report. This time the buying
was amplified because we have other things going on the end of
the month, a three-day weekend, and the unofficial kickoff to the
fall trading season. Now if we can just get a 4.1% reading on
the unemployment report, things might really get cracking!
Otherwise, the reaction to Friday's report may be a bit muted, as
many traders will be leaving early for their vacation.
If we can point to any leadership in this rally, it's been the
financials, as it has been for the past two months. The
continued strength of this sector is pushing most boats higher
and is including most of the old economy stocks. By that I mean
anything outside of the tech sector (techs rally if the wind
blows a real rally includes all stocks). I'm encouraged to see
the rally broaden to include Mid-cap stocks. During August
alone, the Mid-cap SPYDR (MDY) has increased 10%. Of course,
techs were no slouch either, as CNBC pointed out it was the
best August performance for the NASDAQ in 10 years.
Friday's Data:
The NASDAQ Composite (COMPX) rallied 102 points to close at 4206.
Volume was almost exciting at 1.87 billion shares traded. Could
it be that traders are placing bets for more gains, or were they
just taking care of business before the holiday? Either way,
I'll take it! It was the best volume we've seen in a long time.
Breadth was solid at 25 to 16.
Dow Industrial (INDU) stocks had a great day, lead by the
financials, but other big caps joined in as well. The average
put on 112 points to close at 11215. NYSE volume was heavy at
1.06 billion shares. Advancers on the exchange lead decliners 17
to 11.
S&P 500 stocks (SPX) moved their collective average to a high of
1525, before backing off to close at 1517, a 1% increase. 1525
has been a sticking point for the index several times in the
past, with the all time high at 1552.
Treasuries had a strong day in response to the light economic
reports. The ten-year note gained 13/32 to close at $100.06.
The yield is now at 5.74%.
In specific sector news, a returning cast of favorites lead all
others: Banks, Biotechs and Semiconductors. The BKX was up 3.15%,
the BTK up 3.43% and the SOX up 3.10%.
It has been interesting to note during the past week that sector
rotation has provided strength to the market. In contrast to
mid-Summer trading, when one sector gained while another sold
off, we are now seeing the strong sectors gain, then pause, while
another takes on the leadership role. Wednesday's leader the
Internets, took a small break Thursday, but the Amex Internet
Index (IIX) still managed to post a 1.35% increase.
Biotechs enjoyed a big day on the strength of an announcement
from Millennium Pharmaceuticals (MLNM). The company has
developed a new drug in partnership with Eli Lilly to treat
congestive heart failure. The result of today's news: MLNM
+13.12, the BTK index +25.68.
But alas, not all sectors are participating. Retail stocks lost
2.3% amid further concerns about weak sales. Interestingly, the
downgrades are coming in waves, similar to the way upgrades seem
to come at the same time on particular sectors. Anyhow,
disparaging remarks were made about Target (TGT), The Gap, (GPS),
Ross Stores (ROST), Intimate Brands (IBI) Pacific Sunwear (PSUN)
and the Limited (LTD). As one analyst put it, "expect things to
get worse before they get better".
Also showing some weakness today were the oil and oil service
stocks, in response to a price slide in the crude oil futures
contract, which fell off $1.25 per barrel to close at $31.22.
That is likely to be a temporary setback though, as most analysts
expect high prices for the remaining quarter of 2000. In fact,
just before the close, ABN Ambro upgrade Schlumberger (SLB) and
Halliburton (HAL) while Lehman Brothers spoke positively about
Oceaneering International (OII).
And finally, I would be remiss if I didn't mention that the FBI
believes it has caught the perpetrator in the Emulex hoax. It
was a brash hoax, but a ridiculously sloppy crime. Details at
eleven.
Friday's Trading:
Earnings will be light for a Friday, so we turn to economic
reports, which will be very important as we head into September.
Before the open, the Jobs Report will be issued. Unemployment is
expected at 4.0%, Hourly Earnings at a 0.3% increase, and Non-
Farm payrolls at a 20k decrease. Also on the schedule are Auto
Sales and Construction Spending.
Technically, resistance was broken on today's charts.
Specifically, resistance on the NASDAQ 100 chart, which closed
over the 4000 level. The COMPX scored a victory as well, with a
close over 4200. The next challenge is the July 17th high at
4289. The oscillators are moving into the overbought area as
they are known to do in a trending market. As long as the volume
can back us up, this rally could continue. As for support, a
floor at 4000 seems to be well established at this point, as a
psychological level, but also a technical support, because the
200-dma is now at 3989 and climbing.
Chart of the NASDAQ Composite:
Over on the INDU chart, the index topped out at 11300 before
sliding back to close at 11215. The immediate trading range is
11300 on the topside, 11100 for support. A break above
resistance will be challenged at 11500; a break below support
could move 11000.
Chart of the Dow Jones Industrial:
Looking at Friday's trading, we may have some carry-through from
today's action, but I wouldn't be surprised to see a rather flat
market on low volume because of the holiday. Keep in mind that
stocks look strong right now, but if volume doesn't come in right
away after the holiday, traders may become worried and take
profits.
Have a safe and happy Labor Day!
Steve Pekarek
Editor
************************Advertisement*************************
Attention Online Traders:
NobleTrading.com has become the first online trading firm to
offer both Direct Access Trading, and web based trading to its
customers. Trade Direct using any ECN, SOES, and SelectNet, or
trade right through your browser using our web based trading
application. FREE DSL service for active traders.
Visit our website and sign up for a Free real-time demonstration!
http://www.sungrp.com/tracking.asp?campaignid=381
**************************************************************
*********************
FALL SEMINAR SCHEDULE
*********************
Here we go again! Here is your chance to learn from the
pros. The three day Technical Analysis Stock and Option
Fall Seminar Series. Three days of indepth education.
Don't miss it!
Some comments from recent attenders:
Chris & Steve, I would like to thank both of you for a great
experience at the Atlanta Workshop. I learned more in the
three days of the workshop about investing and trading than
all of my undergraduate and graduate courses combined. It
was a lot of information in a short time and I hope to put
it to use very soon. Mike
I attended the Atlanta seminar and wanted to forward my positive
comments. The seminar "really lit my fire". I have been a trader
for 20 years and often go to seminars and this was the first one
that really taught me the most. Dr Lloyd
Jim, I had the good fortune of attending the meeting in Orlando.
Like your newsletter, it was a CLASS ACT. Chris and the others did
a great job. Chris was by far the best performer but the gentlemen
beside me was an option trader with several seminars under his
belt and almost freaked out when Chris finished his Index
Presentation. JC
I am writing this note to compliment you and your staff on the
great job they did in Atlanta. But more importantly I would like
to single out Steve Rhoades as one of the finest speaker/teacher
on technical analysis that I have ever had the pleasure of
hearing.I am doing my best to persuade other members of the two
investment clubs that I belong to, to attend the Detroit seminar.
Sincerely, ML
We guarantee you will not be disappointed. The class size
is small so you will get plenty of individual attention
from Chris Verhaegh, Steve Rhoads and staff.
At less than the cost of a bad trade you can learn how
to analyze stocks and trade options like the pros.
Don't wait, do it now.
Date City
Sep 14-16 Chicago
Sep 21-23 Austin Tx.
Sep 28-30 Boston
Oct 05-07 Portland
Oct 12-14 Charlotte NC
Oct 19-21 San Francisco
Nov 02-05 Phoenix
Nov 09-12 Miami FL
Dec 07-09 Philadelphia
Dec 14-16 San Antonio
Australia coming soon!
Has the market been beating you up? Did you give back
your gains from April? Would you like to understand
all the technical indicators our writers use? Does
the alphabet soup of technical terms like RSI, DMA,
MACD, ROC, Stochastics, Bollinger bands, sound like
Greek to you?
You can learn from the experts how to interpret all
these indicators, read charts, pick stocks and which
option strategies to use on those stocks for less than
the cost of one bad trade.
Reserve your seat now for one of our regional seminars.
Click here for more info:
http://www.optioninvestor.com/seminar/seminar.asp
Definition of the Day
=====================
Saucers
This is a technical chart pattern that indicates a trend reversal.
When a stock has formed a bottom and shows signs of reversing its
trend by gradually ascending, this is known as a saucer.
For the complete definition, please go to:
http://www.splittrader.com/glossary/viewglossary.asp?glossaryid=326
===================
Split Announcements
===================
Thursday, August 31, 2000, During the Market
Lattice Semiconductor Ignites Hardware Stocks With 2:1 Split
During market hours today, Lattice Semiconductor (Nasdaq: LSCC)
announced approval of a two-for-one stock split by the Company's
Board of Directors. The stock split will be issued in the form of
a 100% stock dividend, payable to eligible shareholders on October
11, 2000.
For the complete announcement, please go to:
http://www.splittrader.com/announcements/083100_2.asp
============
Sector Watch
============
As of Market Close - Thursday, 08/31/2000
Key Benchmarks
Broad Market Last Support/Resistance Alert
****************************************************************
DOW Industrials 11,215 11,000 11,400
SPX S&P 500 1,517 1,485 1,550
COMPX NASD Composite 4,206 4,000 4,300 **
OEX S&P 100 827 814 845
RUT Russell 2000 537 485 540
NDX NASD 100 4,077 3,900 4,300 **
MSH High Tech 1,116 1,080 1,170 **
BTK Biotech 773 690 800 **
XCI Hardware 1,637 1,500 1,680
GSO.X Software 481 450 500 **
SOX Semiconductor 1,153 1,000 1,200
NWX Networking 1,368 1,325 1,390 **
INX Internet 579 495 600
BIX Banking 608 550 610
XBD Brokerage 677 660 700 **
IUX Insurance 722 680 725
RLX Retail 784 770 815 **
DRG Drug 390 380 415
HCX Healthcare 811 795 855
XAL Airline 156 148 168
OIX Oil & Gas 305 280 320
Up, up and away. Double digit gains for both major indices
has put many alerts on the screen. Nasdaq, Software, Networking
and Brokerage to name a few.
This section of the investment advisory website highlights
SplitTrader.com's stated Sector Watch across broad market indices
and industry sectors. SplitTrader.com is the only website that
states and regularly updates its Sector Watch across industry
sectors. Investors who reference this section first before
planning their trades will gain a decided advantage. The time
horizon of our stated Sector Watch is generally 2-3 weeks and is
based upon a number of fundamental, technical and sentiment
indicators.
An important feature to our stated Sector Watch is the key
benchmark levels. These levels represent important near-term
support and resistance points. By viewing the sliding bar for
each index, investors can quickly view the relative strength of
our position and better anticipate when we are likely to change
our Sector Watch. These benchmarks are determined using technical
and sentiment indicators. It's important to realize that our
Sector Watch may be contrary to the overall trend when compared
to longer-term moving averages. This is because our stated Sector
Watch is designed to help investors take positions before others
see major trend reversals. For each sector, we highlight the index
symbol, key benchmarks, last level, stated Sector Watch and the
date we changed our position (since).
For industry sectors signaling BULLISH, investors may want to
consider long/call positions. For sectors signaling BEARISH,
investors may want to explore short/put positions. For sectors
flashing Neutral, investors may want to develop hedge positions.
As investors allocate capital, we encourage BULLISH traders to
pursue industry sectors that are trending higher and trading above
moving averages and BEARISH traders to pursue sectors trading
below declining moving averages. Investors can view these moving
averages over a six-month chart by double clicking on the industry
indexes links within the matrix.
====================================
Friday's Expirations by Payable Date
====================================
Netegrity, Inc. (NETE) splits 3:2
Rational Software (RATL) splits 2:1
************************Advertisement*************************
Tired of waiting on trades to execute?
Does your broker offer Stop Losses on Options?
Trade instantly with Stop Losses at Preferred Capital Markets
Stop Losses based on the option price or the stock price.
Move your trading into the next millennium with Preferred Capital
Anything else is too slow!
http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN
**************************************************************
=====================
SplitTrader.com Plays
=====================
The PLAY LEGEND:
SplitTrader.com Play Recommendations.
Play-of-the-Day is our number one play recommendation for the
following trading day.
Updates are just that - updates on continuing plays.
New plays are brand new for the newsletter.
Drops are closing plays that we feel have lost the advantage.
You will see:
Stock Symbol, Company Name, Closing Price, (change for the week)
Picked at date and Change since picked
Terms:
BoD = Board of Directors meeting
ADV = Average Daily Volume
dma = daily moving average
On the SplitTrader.com website we have very detailed profiles
for the stocks we play. Please take the time to visit the site
and look up a stock's profile if you are interested in more
information.
================================================================
========================
Friday's Play-of-the-Day
========================
Thursday, August 31, 2000
=============================
RIMM - Research in Motion Ltd. $75.56 +4.19 (+11.88)
Thursday's Update:
Research in Motion Limited designs, manufacturers and markets
innovative wireless solutions for the mobile communications
market. We welcome this new split candidate to our play list
in advance of their upcoming earnings on September 28th.
Estimates are for a profit of $0.02 per share compared to a
profit of $0.03 cents in the same quarter last year. We see
RIMM as a split candidate at $100. Currently, the company has
64.3 million shares outstanding and has an unlimited amount of
shares authorized making a split authorization much easier.
The stock has recovered nicely from its May bottom of $25.
Recent news affecting the company include a new deal signed
earlier this week with Brience, Inc., a leading provider of
next-generation wireless and broadband solutions. RIMM and
Brience will work together to offer corporations wireless
access to a broad range of existing enterprise applications in
addition to corporate email systems. Investors reacted
positively to the news taking the stock higher by $9.00 on
Tuesday. We see further upside from here as very possible.
Switching to the technical indicators, we see the stock to
having established support at $72.00 and then the 5-dma at
$69.36. The stock is finding resistance at $76.00 and then
will likely hit resistance again at $80.00. Another technical
note is that the stock has now filled a gap that occurred in
April when the stock dropped from $85 to $55 over night. The
filling of a gap is something technical traders like to see.
Possible new plays opening might exist if good volume, over
1.1 million shares, takes the stock up through resistance. A
quick move off of a support level if prompted immediately by
good volume would also be worth considering. We will place a
protective stop just below support at $67.19. Check our IN
PLAY section daily for updates on our stop positions.
Picked on August 31st @ $75.56
Change since picked 0.00
Chart = 
NEW SPLIT RUN PLAYS 08/31/00
============================
NONE
NEW SPLIT CANDIDATE PLAYS 08/31/00
==================================
LLTC - Linear Technology Corporation $71.94 +2.44 (+3.31)
Linear (or analog) circuits, unlike their digital counterparts,
are not considered commodities, especially in the high-performance
market where Linear Technology (LLTC) primarily markets.
Applications for the LLTC's products include telecommunications,
notebook and desktop computers, computer peripherals, cellular
telephones, network and factory automation products, and
satellites. Analysts are expecting the company to grow revenues by
40% next year. Currently, the company has 313.1 million shares
outstanding with 480 million shares authorized, not enough shares
to split 2:1. Still, we think the stock can run, anyway. Advancing
sharply above a major resistance point at $70, LLTC may be on the
verge of advancing to its all-time high of $74.75. Good volume,
which came in at 2.8 million shares today, is a strong indication
that the advance has some strength behind it. If shares do in fact
run higher, we'll anticipate additional opposition to come at the
$80 mark. However, if shares do pullback prior to advancing, then
look for immediate support to come at previous resistance ($70).
The $70 mark is also bolstered by the 10-dma of $69.12 and could
present a good intra-day buy level. Secondary support will likely
follow at $67, which comprises the lower end of the recent
congestion zone. Keep firm stops below support at $65 and use
strength/weakness in the NASDAQ composite to confirm entry points.
With earnings not until October, we'll plan on using the above
listed support/resistance levels to trigger our entries/exits.
Picked on August 31st @ $71.94
Change since picked 0.00
===
RIMM - Research in Motion Ltd. $75.56 +4.19 (+11.88)
Research in Motion Limited designs, manufacturers and markets
innovative wireless solutions for the mobile communications
market. We welcome this new split candidate to our play list in
advance of their upcoming earnings on September 28th. Estimates
are for a profit of $0.02 per share compared to a profit of $0.03
cents in the same quarter last year. We see RIMM as a split
candidate at $100. Currently, the company has 64.3 million shares
outstanding and has an unlimited amount of shares authorized
making a split authorization much easier. The stock has recovered
nicely from its May bottom of $25. Recent news affecting the
company include a new deal signed earlier this week with Brience,
Inc., a leading provider of next-generation wireless and broadband
solutions. RIMM and Brience will work together to offer
corporations wireless access to a broad range of existing
enterprise applications in addition to corporate email systems.
Investors reacted positively to the news taking the stock higher
by $9.00 on Tuesday. We see further upside from here as very
possible. Switching to the technical indicators, we see the stock
to having established support at $72.00 and then the 5-dma at
$69.36. The stock is finding resistance at $76.00 and then will
likely hit resistance again at $80.00. Another technical note is
that the stock has now filled a gap that occurred in April when
the stock dropped from $85 to $55 over night. The filling of a gap
is something technical traders like to see. Possible new plays
opening might exist if good volume, over 1.1 million shares, takes
the stock up through resistance. A quick move off of a support
level if prompted immediately by good volume would also be worth
considering. We will place a protective stop just below support at
$67.19. Check our IN PLAY section daily for updates on our stop
positions.
Picked on August 31st @ $75.56
Change since picked 0.00
SPLIT RUN PLAY UPDATES 08/31/00
===============================
NONE
SPLIT CANDIDATE PLAY UPDATES 08/31/00
=====================================
AHP - American Home Products $54.38 -0.19 (-0.19)
With favorable demographics reflecting a significant aspect of
future growth for drug companies, analysts are confirming that AHP
will grow their earnings by at least 15% this year. Behind much of
this growth, net increases should be bolstered by the company's
recent alliance with Elan Corporation to jointly develop a vaccine
for the treatment of Alzheimer's. Currently, the stock has
remained flat this week, gaining just 0.38 points. This tight
range has held close to the $55 resistance level. We'll be
watching this level carefully for a sharp advance on good volume
(3.2 million shares or better), as an opportunity to open new
positions. However, if we get a strong pullback, then we'll look
for support to come at the recent lows of $53.56. For additional
declines we'll look to our stop of $53.13 to help minimize losses.
When good volume confirms an advance through resistance at $55 and
$60 (previous high), we'll look to open positions. Also, look to
confirm these positions with strength or weakness in the AMEX
Pharmaceutical Index (DRG).
Picked on August 24th @ $55.25
Change since picked -0.88
===
BEAS - BEA Systems $68.06 +4.56 ($8.44)
Internet infastructure provider BEA Systems continued to extend
its upward trend today. Over the past eight sessions, the stock
has steadily added nearly $15 of value. Because of the recent
ascent, BEA's is fast approaching resistance at the $70 level,
which was its March high. The stock now appears to have decent
support at its 10-dma of $59.35 (Granted, that's nearly nine
points lower from today's close, so that would be quite a fall).
After today's strong gains, it's possible traders may be looking
to take some money off the table. For that reason, we've raised
our stops to $64 to lock in our gains. Still, BEA's rally might
still have some legs. A rising MACD and a decent RSI signal there
may be some upside potential that could send the stock over $70.
If it does, there's a good chance we will again raise our trailing
stop.
Picked on August 27th @ $59.63
Change since picked +8.43
===
COHR - Coherent Incorporated $80.50 +1.25 (+6.56)
Staying ahead of the curve in laser technology, COHR's newer
applications include selective lasers for glaucoma. This
technology uses light to stimulate a filter in the eye and induce
an actual biological change in the treated tissue. By targeting
key diseases the company has been able to successfully market
their technologies. For the stock, COHR continued to run higher
and closed above the next major resistance at $80. This was the
second buy signal for the week, which did come on fairly good
volume of 175 thousands shares. To create a sustained run, we
would like to see improved volume of 240 thousand shares accompany
higher prices. With this in mind, we'll now be looking for
resistance to come at the $85 mark, which could be followed by
stiff opposition at $90 (near previously highs). Keep in mind that
these resistance levels may present a good level for profit
taking, since the stock has rallied for nearly a month. On the
downside, COHR will now find its initial support base at $80
(previous resistance). Just lower, the 5-dma of $77.80 has been
providing good trendline support and will be a good place to open
new positions should prices bounce sharply on good volume. With
the recent advance, we now recommend raising stops at $76 to lock
in profits. Use advances through resistance to signal potential
entry points, when good volume is present. The NASDAQ should be
used to help indication of strength or weakness in the stock.
Picked on August 13th @ $68.94
Change since picked +11.56
===
CPTH - Critical Path Incorporated $77.25 -0.50 (+12.25)
Creating fully scalable end-to-end Internet messaging solutions,
CPTH enables customers to manage the technological complexities
associated with messaging and to stay competitive with the latest
features. By doing this, CPTH is more effectively able to manage
costs for its clients. With Wednesday's strong performance and
close above major resistance at the previous high of $73.31, CPTH
has brought the stock up to next major testing ground at $80.
Volume did remain fairly strong (1.50 million shares traded) over
the advance, and will likely need maintain this strength to fuel
additional advances. Although we got our original entry signal
from the close above $73.31, an increase in volume should signal
an extended advance. Beyond the $80 mark, we'll next look for $90
to present a tougher wall of resistance. A positive news
announcement could help to bolster any advances to these upper
levels. As for support, plan on the 5-dma of $72.58 to present a
near term support base for intra-day moves. Further down, the $70
level is likely to provide more support ahead of our stop at
$65.44. Use sharp bounces from support to trigger potential entry
points, but confirming the entry with another indicator may help
to improve the chances of a successful trade.
Picked on August 28th @ $73.00
Change since picked +4.25
===
GMST - Gemstar-TV Guide International $90.25 +8.06 (+13.31)
Gemstar is no longer sneaky strong; it's now Arnold
Schwartzenegger strong. Over the past few sessions, this purveyor
of TV Guide magazine and video technology has been quietly adding
value in two and three dollar incremenents. Today, though, the
stock loudly blew ahead $8.06 to reach a new summertime high.
There was some double-top resistance at $79.25, but Gemstar easily
vanquished that today. Resistance now appears to be at $90. If
the stock should cleanly break this level, it's just a hop, a skip
and a jump to $100, and then on to its all-time high of $107.44
set back in March. But before we get ahead of ourselves, we'll
need to see continued strong volume; today's was twice the 3-month
average of 3.1 million. Additionally, we'll probably need to see
some improvement in a couple of important technical indicators.
The RSI is indicating an overbought condition, as is the
stochastic oscillator. On the plus side, though, the OBV and the
MACD still appear solid. Because of today's advance, we've moved
our stop up to $85 to protect our considerable profits. Looking
ahead, the most likely scenario is for us to exit this play
through the use of a stop (which we'll continue to raise as the
stock rises) because a split is unlikely at these prices.
Picked on August 15th @ $65.06
Change since picked +25.19
===
IBM - International Business Machines $132.00 +1.69 (+3.00)
On Thursday, shares of IBM came within 4 points of its 52-week
high. The stock has enjoyed a 35% appreciation in the last month
and continues to look strong. The company, renowned for its
information technology, announced it has completed phase one of
its goal to accelerate customer acceptance of open storage
networking. IBM entered into this alliance with Compaq Computers
(CPQ) in July and already both companies have yielded positive
results. Shifting over to the technical view, the stock achieved
its gains on volume of 5.4 million shares, down from the average
of 6.2 million. Currently, the stock is hitting resistance at
$134.00. Support is first measured at the 5-dma at $131.14 and
then at the 10-dma at $126.70. Possible new play opportunities
might exist if the stock were to retreat to a support level and
ricochet up on better than average volume. A decided move up on
good volume if accompanied by bullish activity in the INDU and the
sector would also warrant consideration for a new position. IBM is
at a critical juncture and will require careful watching if you
are in this play. A failed attempt at a new high could result in
some quick and decided selling as seen in late June and early
July. We therefore are keeping our stop at $125.00 to limit our
loss in the event of selling.
Picked on August 29th @ $132.88
Change since picked -0.88
===
IDTI - Integrated Device Technology $87.75 +10.50 (+9.50)
So much for semiconductor stocks looking tired. The PHLX
Semiconductor Index (SOX) throttled ahead 3.1 percent today. More
importantly, though, the index took IDTI along for the ride. The
company's shares soared ahead by $10.50 to its new all-time
closing high of $87.75. IDTI has had an amazing run over the past
month, adding nearly $45 to its share value. Admittedly, we
weren't so sure whether the stock was running out of gas, which is
why we thought it would meet resistance at $80. So much for
thinking, $80 now looks more like support than resistance, which
is why we ratcheted up our trailing stop to $85 today.
Technically, there's a lot to like about IDTI. Besides, blowing
through resistance today, the stock also traded at more than three
times its 10-day average volume of 2.15 million (it traded 7.61
million). Since IDTI is trading at a new high, it's difficult to
say were it will meet resistance, possibly at $90 because that is
where the stock met some resistance late in the session.
Psychological support for the stock is at $80, with secondary
support at the 10-dma of $76.91. The MACD looks exceptionally
strong. However, the stochastic oscillator is beginning to
suggest the stock is oversold. Look for entry points on strong
volume confirmed by strength in the Nasdaq Composite Index (CMPX)
and the SOX.
Picked on August 13th @ $65.44
Change since picked +22.31
===
ITWO - i2 Technologies $169.19 +0.44 (+2.69)
Developing new solutions for Business Process Optimization or BPO,
ITWO is creating a new band of decision intelligence for planning
and optimizing across multiple business fronts. BPO will allow
customers to connect front-end Web applications with back-end
processes for greater efficiency. For our play, Wednesday's $3.94
advance on good volume (3.3 million shares traded) was a
tremendous help in getting our play running. This advance managed
to close above the recent high of $166.50, which was are initial
buy signal. Additional buying was generated today, when ABN AMRO
said it had started coverage with a buy rating and a 12-month
price target of $200 on the stock. We'll now look to the $175 mark
for the first wall of resistance, followed by tougher opposition
at the previous high near $180. For support, we'll look for a
light foothold at the previous high of $166.50. Further down, the
recent low of $158, bolstered by the 10-dma of $157.14 should
provide a stronger support base. Good midday volume of 1.50
million shares could improve the chances of a reversal, should
shares bounce sharply from support. We'll set stops to $154 to
help minimize losses in a pullback. Confirm entries and exits with
strength or weakness in the NASDAQ Composite Index (COMPX).
Picked on August 27th @ $166.50
Change since picked +2.69
===
LWIN - Leap Wireless International $79.38 -0.75 (+3.75)
On Thursday shares of Leap Wireless finished lower for the day on
half its normal volume. At the close of trading 161 thousand
shares had exchanged hands with the stock off by .75 cents. The
stock has taken a pause at this level hopefully getting ready for
a nice earnings run. The company is due to report earnings in a
few weeks on September 20th. Going forward, we'd like to see
volume increase in order to take the stock up and through
resistance. We now see support for LWIN at the 5-dma at $77.65 and
then the 10-dma at $76.71. Overhead resistance will first be
encountered at $80.00 and then $82.00. The holiday weekend may see
low volume trading on Friday, so don't be surprised if Thursday
volume levels are repeated. To consider new plays, we'd like to
see the stock conquer resistance on good volume. Confirmation
coming from the COMPX and the sector would also be a viable factor
for establishing a new position. Also, consider a move off a
support level if followed with strong bullish momentum as another
possible entry point. We will move our stop to $74.00 on this
play. Look at our IN PLAY section for any changes to this stop.
Picked on August 20th @ $73.44
Change since picked +5.94
===
NTAP - Network Appliance $117.00 +5.56 (+16.19)
Network Appliance moved up another 5% on Thursday. The data
storage giant continued its march with volume supporting the move.
The broad market rally extended into the tech sector and saw NTAP
and many of its brethren post decent gains. This week the stock
has aligned itself with some other companies in the field of
information application. Specifically, a deal announced earlier
this week with Zack Network aroused investors at the prospects of
future revenue streams generated from the alliance. Thursday's
gains came with the support of 5.7 million shares of volume,
better than the average by 500 thousand. We will need to see good
volume as the stock approaches its 52-week high at $124.00. Now
for a look at the technical indicators: Currently, NTAP has
immediate support at $112.00 and then the 5-dma at $108.50.
Resistance has been encountered at $120 and then the high at
$124.00. History has shown us that stocks making and keeping new
higher levels are achieved on good volume. Therefore, look for
resistance to be conquered on better than average volume as a
possible entry point for a new play. A bounce off support could
also make a nice entry point. Watch for sector news and
confirmation in the COMPX as your guide. Watch for profit takers
to come in at the former high of $124.00 if the volume is light.
We will guard our profit achieved on this play by tightening our
stop to $111.00. Watch for any changes to this at out IN PLAY
section.
Picked on August 24th @ $101.69
Change since picked +15.31
===
PCG - PG&E Corporation $28.94 +0.50 (+1.00)
PG&E Corp. posted a modest gain on the heels of a broad market
rally. On Thursday electric utility provider, gained half a buck
on better than average volume of 864 thousand shares. In addition
to a very cooperative market, legislation in California was passed
on Thursday to cut consumer power rates. Residents in the Southern
California City of San Diego have seen a tripling in rates this
summer. Thursday's legislative measure will keep those consumers
electric bills at a reasonable rate and thus helped boost investor
confidence, which took the stock higher. Those were the external
factors affecting the stock, now a look at the internal technical
indicators. Support is at the 5-dma at $28.55, then the 100-dma at
$27.90 and finally the 200-dma at $27.43. Resistance is right
above at $29.00 and then $29.50. Since the volume has spiked back
over the average, possible new entry points could be a jump over
resistance on good volume or a bounce off near term support if
immediately followed by a burst in volume. Lately the formation
has been for a bounce off support in the morning followed by some
fair volume. We will keep our stop at $27.00 on this play.
Picked on August 3rd @ $28.83
Change since picked +0.11
===
SEPR - Sepracor $110.00 +0.38 (+4.27)
Specialty pharmaceutical maker Sepracor continues to inch forward,
adding another $0.38 to $110.00. With any luck, the stock can
continue to move ahead to reach the next resistance level; it's
50-dma of $116.40. Since flaming out in early August (the stock
dropped nearly $40) on the news the company may not be allowed to
make a knock-off of Eli Lilly's mind-altering drug Prozac,
Sepracor has staged a decent effort to reclaim its losses. From
August 21 to the present, the company has reclaimed $20 of its
lost value. Hopefully, there are more gains to be had. The MACD
just turned positive, making it more likely that there is still
some room left for this comeback and the RSI has plenty of upside
potential. However, in case the stock peters out on us, we have
raised our stop to $107 to lock in our profit. Look for possible
entry points on good volume - 750 thousand shares, or better
confirmed by strength in the AMEX Pharmaceutical Index (DRG).
Picked on August 24th @ $102.94
change since picked +7.06
===
THC - Tenet Healthcare Corporation $31.00 +0.69 (+0.31)
Admittedly, Tenet Healthcare has been one of our more lugubrious
selections - the stock just won't get going. However, we're still
going to stick with it for a while longer. Healthcare issues have
been strong of late, so maybe it's only a matter of time before
traders light a fire under this issue. In the near-term, THC
looks decent (not great) because it has been in experiencing a
slow and steady uptrend since March, with the 50-dma providing
support the entire way. However, the stock has developed
resistance at $31, which it has had a stubborn time of breaking.
Then, above that, $32 could cause some trouble. But working in
Tenet's favor is the fact the Relative Strength Index (RSI) and
the stochastic oscillator aren't signaling oversold and volume has
remained steady. Nevertheless, to avoid a complete rollover, we
are keeping our stop at $28.00. We will exit this position if the
company announces a split, hits our stop or just continues to bore
us.
Picked on July 30th @ $31.19
Change since picked -0.19
===
TIBX - Tibco Software, Inc. $101.94 +3.06 (+5.69)
TIBCO Software Inc. (TIBX) a leading provider of real-time
infrastructure software for e-business, announced today the
opening of its new Korean Technical Learning Center in Seoul. The
Center will help TIBCO better serve its existing Asia Pacific
customers, including Samsung, Hyundai, LG Electronics and TriGem,
and meet the growing demand for its products and services. The
news was well received by Wall Street as investor took the stock
higher by 3% for the day. Additionally, the stock traded through
and closed above the psychologically important century mark for
the first time since early August. TIBX now seems poised to move
higher if investor confidence can bolster a bullish move from
here. We'd look for good volume over the average of 1.5 million
shares coupled with good sector and index movement. Technical
support levels are the 20-dma at $99.42, the 5-dma at $98.00 and
the 10-dma at $93.88. The stock will likely encounter resistance
at $104.13, the 50-dma. Possible new play opportunities might be a
bounce off of a support level on good volume or a charge up
through resistance also on good volume. Watch the COMPX and the
CBOE Computer Software Index (CWX) for confirmation and direction.
We will keep our stop loss on this play at $89.00. Check our IN
PLAY section daily for any changes to this stop.
Picked on August 27th @ $96.25
Change since picked +5.69
=====
DROPS
=====
SPLIT RUN PLAY DROPS 08/31/00
=============================
NONE
SPLIT CANDIDATE PLAY DROPS 08/31/00
===================================
GM - General Motors Corporation $72.63 +0.25 (+1.19)
Our GM play couldn't have gone better! Shares advanced 14% from
our original entry, giving very few pullbacks. Although we did
manage to capture a large portion of the gain, GM actually
advanced 27% from the beginning of the month. Keep in mind that an
early entry, without a confirming signal of a breakout, is
actually a risky and inconsistent way to earn profits. Our
trailing stop at $72 helped us to lock in the majority of gains of
what looks to be a near-term top at the 200-dma. Looking back,
it's interesting to note how light volume near the 200-dma may
have played a role in this week's pullback.
Picked on August 13th @ $63.25
Profit/Loss = +8.75 (+14%) (Stopped out Wednesday @ $72.00)
Best Profit = +11.63 (+18%)
===========
SHORT PLAYS
===========
NEW SHORT PLAYS 08/31/00
========================
NONE
SHORT PLAY UPDATES 08/31/00
===========================
NONE
SHORT PLAY DROPS 08/31/00
=========================
NONE
***********************ADVERTISEMENT************************
Save Up To 80% Off At Everything Wireless!
Click On The Link Below For Store Wide Discounts.
The largest range of accessories and products you use every
day including Cellular and PCS phones, batteries, chargers,
hands-free kits, wireless data products and more.
http://www.sungrp.com/tracking.asp?campaignid=345
************************************************************
==========
DISCLAIMER
==========
This newsletter is a publication dedicated to the education
of online stock traders. The newsletter is an information
service only. The information provided herein is not to be
construed as an offer to buy or sell securities of any kind.
The newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding how to trade stock
splits. It is possible at this or some subsequent date, the
editors and staff of SplitTrader.com may own, buy or sell
securities presented. All investors should consult a qualified
professional before trading in any security. The information
provided has been obtained from sources deemed reliable but is
not guaranteed as to accuracy or completeness. SplitTrader.com
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due
to factors beyond our control.
|
|
|
SplitTrader.com. 