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stock recommendation, stock pick
Begin part 3 of 3
THE PLAYS:
Upside: After the big downdraft looking at the upside survivors. If you an survive that selling you have some stones. Just getting ready in the event the market bounces and these held the line along with other strong stocks on the report already. You don't have to buy them all; pick what you like and if they move we will issue an alert and give you our view as to why we are moving in.
Play Date: 09/29/2008
CEPH (Cephalon--$78.57; -1.31; optionable): Drug manufacturer
http://biz.yahoo.com/p/c/ceph.html
EARNINGS: 10-28-08
STATUS: You can call this pattern a 10 month cup with handle, a 15 month double bottom with handle, or even something of a reverse head and shoulders if you turn the chart sideways and squint a bit. In any event, no matter what you call it the stock is starting to make a breakout move. Volume jumped the past two weeks as CEPH traded up and down and then the stock broke higher Friday. You look for swelling volume as a stock trades near its buy point as that shows the buyers massing at the borders. After that Friday break higher CEPH bounced down intraday to the lows in the handle and then shot back up to post a modest loss. Volume jumped as it rebounded, showing buyers moved right back in. Perched near the all-time highs and ready to make the breakout. This is part of a large 2.75 year ascending base and it is ready to make the break judging by the volume rise. Looking for it to resume the breakout move and as it continues we will look to pick it up after this test.
Volume: 2.291M Avg Volume: 1.41M
BUY POINT: $79.08 Volume=1.8M Target=$88.95 Stop=$75.74
POSITION: CQE AO - Jan. $75c (66 delta) &/or Stock
http://www.investmenthouse.com/ci/ceph.html
Play Date: 09/29/2008
HELE (Helen of Troy--$23.16; -0.67; optionable): Appliances
http://biz.yahoo.com/p/h/hele.html
EARNINGS: 10-8-08
STATUS: Cup w/handle. Why is an appliance maker looking so good? Only the market knows. Nice 5 week handle to a very nicely formed 15 month base. HELE tried the breakout just over a week back, breaking over the handle highs on strong volume. It could not hold in the overall weak market, but it did not tank either, fading to the 18 day EMA (23.31) and holding that near support in the recent selling. and holding that near support in the recent selling. Excellent money flow is leading higher, well out ahead of price. May not make a lot of sense but hard to argue with what the pattern is showing us. If it shows the breakout we will look to pick up some positions, see how it holds, and if it has a successful test then we look at more as it continues off that test.
Volume: 236.655K Avg Volume: 295.714K
BUY POINT: $24.25 Volume=400K Target=$28.95 Stop=$22.55
POSITION: EHQ AX - Jan. $22.50c (62 delta, wide spread) &/or Stock
http://www.investmenthouse.com/ci/hele.html
Play Date: 09/29/2008
JPM (JP Morgan--$41.00; -7.24; optionable): Anointed bank
http://biz.yahoo.com/p/j/jpm.html
EARNINGS: 10-15-08
STATUS: Double bottom. JPM blasted higher Friday on its sweet WM deal. Monday it came right back down as the big banks were sold very late in the session. It is near the 200 day SMA (41.62) and the July/August highs, the hump in the 5 month base. Think this selling got overdone and looking for JPM, one of the anointed banks by the Fed and Treasury, rebounds.
Volume: 79.528M Avg Volume: 52.93M
BUY POINT: $42.31 Volume=80M Target=$49.88 Stop=$39.77
POSITION: JPM AV - Jan. $42.50 (60 delta) &/or Stock
http://www.investmenthouse.com/ci/jpm.html
Play Date: 09/29/2008
PNRA (Panera Bread--$51.00; -1.96; optionable): Specialty eateries
http://biz.yahoo.com/p/p/pnra.html
EARNINGS: 10-21-08
STATUS: Reverse head and shoulders. PNRA is testing back the past 7 sessions after a strong breakout move that took it out of a 5.5 month base. Didn't last. The bread didn't rise in the market selloff, but as noted, PNRA just tested back on low, below every session. The breakout did not hold but the pattern did and there was no dumping. Even in the Monday gutting PNRA tapped the 90 day SMA on the low and rebounded modestly. May take a few sessions but it is holding the line and quietly, on very low volume, setting up for another bounce higher. Willing to take a few positions at the buy point ahead of its break over 55 where it topped out in August and early September but want to see some volume return as it makes that move.
Volume: 900.045K Avg Volume: 1.073M
BUY POINT: $53.65 Volume=1.5M Target=$63.94 Stop=$50.11
POSITION: UPA AJ - Jan. $50c (54 delta) &/or Stock
http://www.investmenthouse.com/ci/pnra.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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stock recommendation
stock pick
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