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Begin part 3 of 3
THE PLAYS
Upside:
Play Date: 08/26/2008
FAST (Fastenal Company--$50.75; +1.08; optionable): Fasteners, building materials
http://biz.yahoo.com/p/f/fast.html
EARNINGS: 7-11-08
STATUS: Reverse head and shoulders. Working laterally over the 18 day EMA (50.04) the past two weeks after breaking higher in early August from its 13 week base formed using the 200 day SMA as its main support at the bottom of the pattern. Solid break but then wandered laterally, not selling back but with the quiet market, not a lot of volume to drive it. It has worked its way laterally, and if the market is ready to break higher, FAST is set up very nicely to make the break to a new high with it.
Volume: 972.7K Avg Volume: 1.88M
BUY POINT: $51.91 Volume=2.8M Target=$59.95 Stop=$49.39
POSITION: FQA KJ - Nov. $50c (56 delta) &/or Stock
http://www.investmenthouse.com/ci/fast.html
Play Date: 08/26/2008
SUNH (Sun Healthcrea Group--$17.02; +0.65; optionable): Long term care facilities
http://biz.yahoo.com/p/s/sunh.html
EARNINGS: Announced 8-6-08
STATUS: Cup w/handle. Using the market muddling the past week or so to form the handle to its 8 month base, testing back to the 18 day EMA (16.46), bouncing off that level Tuesday after some selling Monday. After a great run higher from 2006 to early 2008, it needed a base, and this is a nice pattern that has formed a good foundation for the next great run. Very nice.
Volume: 214.951K Avg Volume: 362.594K
BUY POINT: $17.89 Volume=550K Target=$21.48 Stop=$16.64
POSITION: QUO LW - Dec. $17.50c (54 delta, 131 OI) &/or Stock
http://www.investmenthouse.com/ci/sunh.html
Play Date: 08/26/2008
TSCO (Tractor Supply--$41.29; +0.39; optionable): rural, semi-urban home depot
http://biz.yahoo.com/p/t/tsco.html
EARNINGS: Announced 7-23-08
STATUS: Double bottom w/handle. Well, well. TSCO was one of the first winners out of the 2008 lows as the market recovered, and we were all over it when it made its move along with stocks such as EBAY. Now TSCO has formed a double bottom at what looks to be the end of a 2.5 year pullback that consolidated a 5 year run. Big run needed a big base to set the new foundation for another strong move higher. Bottomed in July, just below the January lows. Surged higher, aided by solid earnings in July. It rallied up to the 'hump' in the pattern at the March high and has moved laterally the past three weeks along near support at the 10 day EMA (41.07), narrowing its trading range the past week. This is how a stock rests or shows the quiet before the storm, and we are simply going to wait for TSCO to show us the breakout on strong volume.
Volume: 481.684K Avg Volume: 889.269K
BUY POINT: $42.48 Volume=1.3M Target=$49.95 Stop=$40.08
POSITION: QTF AH - Jan. $40c (63 delta) &/or Stock
http://www.investmenthouse.com/ci/tsco.html
Downside:
Play Date: 08/26/2008
DXD (ProShares DJ30 UltraShort ETF--$62.41; -0.17; optionable)
http://biz.yahoo.com/p/d/dxd.html
STATUS: As the Dow struggles to hold its uptrend off the July lows we want to be ready to move in if it breaks down. DXD is the mirror of the Dow, rising when the Dow falls. You can play the downside with an upside vehicle so to speak. If the Dow breaks lower we move into DXD to the upside.
Volume: 4.075M Avg Volume: 7.358M
BUY POINT: $63.28 Volume=7.5M Target=$69.85 Stop=$62.15
POSITION: DXD JJ - Oct. $62c (59 delta)
http://www.investmenthouse.com/ci/dxd.html
Play Date: 08/26/2008
PRE (Partnerre Ltd.--$68.48; -0.98; optionable): P&C Insurance
http://biz.yahoo.com/p/p/pre.html
EARNINGS: Announced 7-28-08
STATUS: Put. Insurance is the next sector on the bubble with respect to the mortgage and credit crises. PRE showed some of that Tuesday as it bucked at the 50 day EMA (69.73), turning down on a big jump in volume up to average. PRE is a stock we loved to play to the upside, but it peaked in late 2007 and trended lower then tanked in July. It immediately rebounded to come up for air, moved up to the 90 day SMA, but stalled last week and slipped back below the 50 day EMA. Then the Tuesday drop on volume. Looks ready to dive, dive, dive once more. A move to the initial target lands a 40%ish gain, but it can go on down to 62 on this move and more than double that gain.
Volume: 586.516K Avg Volume: 555.972K
BUY POINT: $68.31 Volume=585K Target=$65.04 Stop=$69.88
POSITION: PRE WN - Nov. $70p (-58 delta)
http://www.investmenthouse.com/ci/pre.html
Good Investing!
Jon L. Johnson and The Daily Staff
All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP or its paid consultants and are 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 our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners of Online Investment Services, LP or its paid consultants may, in some instances, include securities mentioned herein and on our 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.
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