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trade stock, stock recommendation
Begin part 3 of 3
THE PLAYS:
Upside: Looking at strong patterns to hold even through a bailout bounce
Play Date: 09/27/2008
CME (Chicago Merchantile Exchange--$399.00; +20.14; optionable)
http://biz.yahoo.com/p/c/cme.html
EARNINGS: 10-29-08
STATUS: Trend reversal. Peaked in December and trended lower below the 50 day EMA (358.68) until last week when it gapped over the 90 day SMA (368.32). It has tested, held on Wednesday and Thursday, and then surged back up Friday. Its time has come around again and looking to move in as CME rebounds. An exchange for commodities and the idea on the street is that commodities prices are moving up if the US floods the world with liquidity. A move to the target lands a 70%ish gain.
Volume: 869.254K Avg Volume: 1.4M
BUY POINT: $400.31 Volume=1.8M Target=$448.00 Stop=$391.88
POSITION: CME KT - Nov. $400c (55 delta)
http://www.investmenthouse.com/ci/cme.html
Play Date: 09/27/2008
GENZ (Genzyme--$81.16; +0.72; optionable): Biotechnology
http://biz.yahoo.com/p/g/genz.html
EARNINGS: 10-22-08
STATUS: Double bottom. GENZ formed this short 6 week base as part of a base on base pattern. Formed a larger double bottom with handle from January to August and broke out mid-August. It went nowhere from there, however, and formed the current volatile base. Nice recovery off the 200 day SMA on the pair of bottoms in the current base, breaking higher. Looking for stronger trade as it makes the breakout move. Half on the breakout, then we see how the test pans out and if it holds and bounces we can go for another half at that point.
Volume: 2.169M Avg Volume: 3.236M
BUY POINT: $81.57 Volume=4.5M Target=$91.95 Stop=$77.88
POSITION: GAA AP - Jan. $80c (56 delta) &/or Stock
http://www.investmenthouse.com/cd/genz.html
Play Date: 09/27/2008
GLD (Gold ETF--$86.64; +0.19; optionable): Gold
http://biz.yahoo.com/p/g/gld.html
STATUS: Double bottom w/handle. With the US ready to flood the world with more liquidity and double its debt overnight gold has started a run. It surged the second week of September off its second bottom in its 10 week base in a tremendous move. It tested last week, coming back to hold the 90 day SMA on the closes. Classic double bottom with handle base, and as it breaks higher through the 200 day SMA (88) it is ready for its next leg higher and a buy.
Volume: 21.985M Avg Volume: 17.32M
BUY POINT: $88.21 Volume=24M Target=$99.75 Stop=$86.08
POSITION: GLD LJ - Dec. $88c (54 delta) &/or Stock
http://www.investmenthouse.com/ci/gld.html
Play Date: 09/27/2008
TOL (Toll Brothers--$26.24; +0.36; optionable): Hombebuilder
http://biz.yahoo.com/p/t/tol.html
EARNINGS: First week of November
STATUS: Double bottom w/handle. Big rangy double bottom with lows in January and again in July. Tried to break higher two Fridays back but then fell right back down. Held the 50 day EMA on the low and bounced. Now knocking on the door of the breakout once more. Looking to move in as it makes the break higher on some strong trade. Homebuilders continue to set up for a new breakout.
Volume: 4.098M Avg Volume: 5.279M
BUY POINT: $26.55 Volume=6M Target=$30.95 Stop=$24.69
POSITION: TEP LEq - Dec. $25c (56 delta) &/or Stock
http://www.investmenthouse.com/ci/tol.html
Downside: A couple of plays that are still set for downside even after this selloff. After a bounce on the 'plan' we will have more to look at.
Play Date: 09/27/2008
ASIA (Asiainfo Hldgs--$9.80; -0.20; optionable): Chinese software
http://biz.yahoo.com/p/a/asia.html
EARNINGS: Third week October
STATUS: Put. Tried to form a cup with handle June through August, looking good, but it was just a pretty picture. When September came ASIA crumbled, falling through the 200 day SMA and the July low in a nasty 5 point plunge. It has rebounded to test, coming up to the 18 day EMA (10.46) to start last week. Fell back to the 10 day EMA (9.98) on low trade. Looks ready to start a second leg lower. A move to our initial target lands a 47%ish gain. It has room down to 7.25ish, so if it is falling hard at the initial target we take part and then let the rest fall.
Volume: 192.712K Avg Volume: 457.297K
BUY POINT: $9.52 Volume=465K Target=$8.00 Stop=$10.02
POSITION: EUJ WB - Nov. $10c (-44 delta)
http://www.investmenthouse.com/ci/asia.html
Play Date: 09/27/2008
SOHU (Sohu.com--$59.04; -3.36; optionable): Chinese internet
http://biz.yahoo.com/p/s/sohu.html
EARNINGS: Last week October
STATUS: Put. Similar to ASIA, SOHU tried to form a cup with handle through August but collapsed to start September. Broke below the 200 day SMA (62.40), rebounded to that level and stalled last week. Started lower Friday though no volume. Looking for it to bumble down near the April breakout point. A move to that level lands a 42%ish gain.
Volume: 1.243M Avg Volume: 1.978M
BUY POINT: $58.74 Volume=2M Target=$51.65 Stop=$61.22
POSITION: UZK WL - Nov. $60p (-45 delta)
http://www.investmenthouse.com/ci/sohu.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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