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us stock market, trend trading stock
Begin part 3 of 3
THE PLAYS:
Given the selling to end the week we are looking at upside for the first part of next week versus chasing the downside other than with existing plays if it starts out weaker. If Asia looks very weak on Sunday we will look at some more downside and see if we can drum up any thing that is not too oversold already to send out; that is a difficult proposition.
Upside: Financials and a few that could run if the market bottoms here. Have to see the moves by the stocks and the market.
Play Date: 10/04/2008
BXS (Bancorpsouth--$28.59; +1.24; optionable): Southeast regional banks
http://biz.yahoo.com/p/b/bxs.html
EARNINGS: Mid-October
STATUS: Test breakout. After BSX fell out of a 20 month base from June through July, it bottomed and recovered to form something of an 18 week cup with handle. Blasted off just over two weeks back on strong volume with all of the bailout excitement. Spent last week moving laterally, using the 18 day EMA (27.08) on very low, below average volume. Setting up nicely to continue the breakout after tapping the 18 day EMA on the Friday low and rebounding to post a gain. Strong money flow is leading higher. Broke to a new high on the move, has tested, and looking to continue the run higher.
Volume: 656.395K Avg Volume: 1.282M
BUY POINT: $29.31 Volume=1.4M Target=$34.95 Stop=$27.26
POSITION: BXS AF - Jan. $30c (44 delta) &/or Stock
http://www.investmenthouse.com/ci/bxs.html
Play Date: 10/04/2008
MSFT (Microsoft--$26.32; +0.07; optionable): Software
http://biz.yahoo.com/p/m/msft.html
EARNINGS: 10-23-08
STATUS: Trading range. It has been a long time since we have looked at MSFT, but in examining patterns from 2002 and comparing with today's patterns MSFT stuck out. It peaked in late 2007 with a double top and sold off. It has formed something of a 15 week double bottom base, now working on a modest handle. Tried to make the break on Friday over the April to August down trendline, but fading back. Solid volume on the session and indeed on the upside for the past month. That shows accumulation. If the Dow can bottom MSFT is in position to move higher with it as it has put in its time and has formed up well.
Volume: 116.068M Avg Volume: 75.139M
BUY POINT: $26.94 Volume=115M Target=$31.95 Stop=$25.57
POSITION: MSQ AR - Jan. $26c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/msft.html
Play Date: 10/04/2008
MU (Micron Technology--$4.44; -0.04; optionable): Memory chips
http://biz.yahoo.com/p/m/mu.html
EARNINGS: Announced 10-1-08
STATUS: Trend reversal. MU did not scare anyone short the stock with its earnings report last week, but it bounced modestly on the news as it continues working on hammering out a bottom after a long, long decline. Very solid upside volume the past three weeks as MU bounced up and down in a range from 4 to 5. It tapped at the breakout Friday but faded. In excellent position to make the reversal and break higher, following some newly rejuvenated money flow. A longer shot, but if this market is ready to bottom here then MU is one of the few chips forming up and in position to make a nice break higher.
Volume: 24.054M Avg Volume: 21.817M
BUY POINT: $4.95 Volume=30M Target=$7.94 Stop=$4.60
POSITION: MU AH - Jan. $4.00 (73 delta) &/or Stock
http://www.investmenthouse.com/ci/mu.html
Play Date: 10/04/2008
NDN (99 Cents Only Stores--$10.65; -0.10; optionable): Discount variety stores
http://biz.yahoo.com/p/n/ndn.html
EARNINGS: Early November
STATUS: Double bottom w/handle. A nicely formed double bottom base with the first leg in January and the second in July. Nice rally higher through mid-September that pushed NDN to the March peak, the hump in the pattern. It has worked laterally the past two weeks with some intraday dips lower and rebounding, holding the 18 day EMA on the lows. Strong money flow is running higher ahead of price. Very solid and looking for a strong price and volume break higher to show us it is ready to make the run higher. Can take part of the position on the breakout and then after a successful test we can add to it as it has proven the breakout.
Volume: 1.53M Avg Volume: 1.659M
BUY POINT: $11.31 Volume=2.3M Target=$14.75 Stop=$10.42
POSITION: NDN AB - Jan. $10c (59 delta) &/or Stock
http://www.investmenthouse.com/cd/ndn.html
New buy point on a current position:
Play Date: 10/04/2008
JPM (JP Morgan--$45.90; -3.95; optionable): Big bank
http://biz.yahoo.com/p/j/jpm.html
EARNINGS: 10-15-08
STATUS: Breakout test. After a great move last week JPM sold back some Friday, tapping the 10 day EMA (45.34) on the low and bouncing modestly. Some gains taken off the table ahead of next week as the short sale ban expires Thursday. Expecting it to be renewed, however, and as JPM comes off of this test we will be ready to add to positions.
Volume: 68.633M Avg Volume: 52.985M
BUY POINT: $46.77 Volume=72M Target=$53.65 Stop=$45.11
POSITION: JPM AI - Jan. $45c (60 delta) &/or Stock
http://www.investmenthouse.com/ci/jpm.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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us stock market
trend trading stock
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