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us stock market, stock recommendation
Begin part 3 of 3
THE PLAYS:
Upside:
Play Date: 10/22/2008
NUE (Nucor--$34.36; -1.70; optionable): Steel and iron
http://biz.yahoo.com/p/n/nue.html
EARNINGS: Announced 10-16-08
STATUS: Double bottom w/handle. Held up very well for a down day in commodities. Nice to have earnings already out of the way. Eased back to the 10 day EMA on the close, working on a handle to a short 5 week base. Solid volume on the bounce up last week off the second leg of the double bottom. We can look to play this as a straight upside play buying some stock and some options or we can look at selling some puts on it, taking in the premium and see if it gets put to us. It has a good dividend yield at 5.9% at this level. Not bad as it looks to have some upside ahead of it if the market bottoms at the prior lows. We get some appreciation and some dividend as well though it will have to be the next go round as they have already paid out the latest dividend.
Volume: 12.705M Avg Volume: 9.253M
BUY POINT: $35.84 Volume=14M Target=$42.75 Stop=$33.33
POSITION: NLV AG - Jan. $35c (51 delta) &/or Stock or NLV WG - Nov. $35p to sell
http://www.investmenthouse.com/ci/nue.html
Continuing upside play:
Play Date: 10/18/2008
ALK (Alaska Air--$23.50; -0.25; optionable): Regional airline
http://biz.yahoo.com/p/a/alk.html
EARNINGS: 10-23-08 before the open
STATUS: Reverse head and shoulders. Getting some great upside volume as ALK bumps against the breakout point. Airlines are the best looking upside group right now. Hold the nose and buy if it breaks out. To recap: ALK has formed a short but deep reverse head and shoulders pattern the past 6 weeks. As oil prices are falling, ALK is setting up to break higher with some very strong above average volume sessions on the upside the past two weeks. This base has formed at the tail end of a larger 8 month base that is part of a larger base . . . suffice it to say airline stocks have suffered as oil rose. Plenty of basing under ALK's belt, and this strong upside volume and surging money flow tell us that ALK is ready to make the break higher. Earnings are Thursday and it looks as if it is going to make the breakout before then.
Volume: 1.702M Avg Volume: 1.083M
BUY POINT: New: Needs to clear 24 on continued solid volume (orig. $23.11) Volume=1.6M Target=$27.85 Stop=$21.49
POSITION: ALK AX - Jan. $22.50c (49 delta) &/or Stock
http://www.investmenthouse.com/ci/alk.html
Downside: We can ride some of these index plays down to the test of the prior low and make a nice gain without having to break into new low territory.
Play Date: 10/22/2008
DIA (Diamonds Trust (DJ30 EFT)--$85.50; -4.88; optionable)
STATUS: Put. Gapped lower on higher, above average volume, checking up just above the low for the year at 84.87. The higher volume indicates DIA may try and head down to the prior low at 78.94. A move to the target lands a 35%ish gain.
Volume: 37.46M Avg Volume: 29.841M
BUY POINT: $85.24 Volume=40M Target=$79.05 Stop=$86.15
POSITION: DAV XG - Dec. $85p (-43 delta)
http://www.investmenthouse.com/ci/dia.html
Play Date: 10/22/2008
EXPD (Expeditors Intl.--$30.00; -1.08; optionable): Air delivery, freight
http://biz.yahoo.com/p/e/expd.html
EARNINGS: 11-4-08
STATUS: Put. Broke lower sharply in late July, tried to hold a lateral consolidation into September, then tumbled in that early October selling. Rebounded up to near resistance at the 10 and 18 day EMA (30.58, 31.31), showing a pair of dojis there the past two sessions. Big volume Wednesday indicating some churn at resistance. Money flow is low and turning down again ahead of price. Looking for EXPD to follow it lower. A move to the initial target, above the October low at 24, lands a 35%ish gain. Can likely get more out of this one.
Volume: 3.954M Avg Volume: 3.368M
BUY POINT: $29.89 Volume=3.5M Target=$26.15 Stop=$31.41
POSITION: URP MF - Jan. $30p (-41 delta)
http://www.investmenthouse.com/ci/expd.html
Play Date: 10/22/2008
NSC (Norfolk Southern--$54.54; +0.67; optionable): Railroads
http://biz.yahoo.com/p/n/nsc.html
EARNINGS: 10-21-08
STATUS: Put. Announced earnings but couldn't move Wednesday, showing a tight doji at the 10 day EMA on the strongest volume in over a week. NSC broke sharply lower to star the month, falling below the 200 day SMA and unable to recover, sliding down the 10 day EMA (54.71). Money flow is heading down ahead of price. Looks ripe for another fall. A move to the initial target lands a 35% gain. The October low is at 45 so we can likely get more out of this play.
Volume: 7.351M Avg Volume: 4.956M
BUY POINT: $54.22 Volume=5.5M Target=$49.05 Stop=$65.65
POSITION: NSC XK - Dec. $55p (-45 delta)
http://www.investmenthouse.com/ci/nsc.html
Play Date: 10/22/2008
SPY (S&P Depository Receipts--$90.64; -5.22; optionable)
STATUS: Put. As with DIA, some high volume selling as SPY closed just over the October closing low (90.02). Looking for a turn down to test the prior low (83.58).
Volume: 515.498M Avg Volume: 343.006M
BUY POINT: $90.32 Volume=450M Target=$84.11 Stop=$92.11
POSITION: SWG XL - Dec. $90p (-41 delta)
http://www.investmenthouse.com/ci/spy.html
Good Investing!
Jon L. Johnson and the Stock Split Report 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
stock recommendation
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