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us stock market, trade stock
Begin part 3 of 3
THE PLAYS:
Upside: There are some good bases forming up out there as these plays show.
Play Date: 11/01/2008
CHK (Chesapeake Energy--$21.97; -0.10; optionable): Natural gas exploration and production
http://biz.yahoo.com/p/c/chk.html
EARNINGS: Announced 10-30-08
STATUS: Double bottom w/handle. Not much movement on earnings, but a very nice handle forming to its short 3 week pattern at the bottom of a 4 month selloff after peaking in early July. Rallied up to the 18 day EMA (22.51) to end last week, moving laterally at that level Friday. Nice clear buy point, i.e. through the 18 day EMA. Volume picked up on Friday, and looking for more trade as CHK makes the break through this near resistance.
Volume: 35.241M Avg Volume: 28.938M
BUY POINT: $22.65 Volume=40M Target=$28.54 Stop=$21.06
POSITION: CHK AQ - Jan. $22.50c (58 delta) &/or Stock
http://www.investmenthouse.com/ci/chk.html
DAL (Delta Air Lines--$10.98; +1.43; optionable): Airlines
http://biz.yahoo.com/p/d/dal.html
EARNINGS: Announced 10-15-08
STATUS: Reverse head and shoulder breakout. AMR crash landed on us but DAL is taking off, clearing a 3 month range, the last 2 months a reverse head and shoulders accumulation pattern that is part of an even larger 9 month base. Broke through the 200 day SMA (9.16) on very strong volume, also clearing the top of the range and base at 10. Strong move and willing to take some positions on a continued upside move or if it tests early this week, after it holds and starts back up.
Volume: 36.648M Avg Volume: 18.646M
BUY POINT: $11.22 Volume=20M Target=$14.45 Stop=$10.43
POSITION: DAL AB - Jan. $10c (70 delta) &/or Stock
http://www.investmenthouse.com/ci/dal.html
Play Date: 11/01/2008
DLTR (Dollar Tree--$38.02; -0.58; optionable): Discount retail
http://biz.yahoo.com/p/d/dltr.html
EARNINGS: 11-25-08
STATUS: Double bottom w/handle. DLTR formed this 7 week base using the 200 day SMA (33.24) as the support for the twin bottoms. Broke sharply higher Wednesday then faded to test Thursday and Friday on lower, below average volume, tapping at the 50 day SMA on the lows. Nice breakout, nice test, and ready to move higher after this handle forms over the next couple of sessions. This base is the tail end of a larger base formed the past 17 months; DLTR has put in its time and built a good foundation and it looks good to buy as it makes the breakout move.
Volume: 2.218M Avg Volume: 2.247M
BUY POINT: $40.08 Volume=3M Target=$47.95 Stop=$37.27
POSITION: DQO BH - Feb. $40c (52 delta) &/or Stock
http://www.investmenthouse.com/ci/dltr.html
Play Date: 11/01/2008
STE (Steris--$34.04; +1.01; optionable): Medical appliances
http://biz.yahoo.com/p/s/ste.html
EARNINGS: Announced 10-30-08 before the open
STATUS: Double bottom. STE surged on its earnings announcement Thursday, gapping higher and running to the August and September highs before reversing field and finishing with a so-so gain. Held support at the 18 day EMA (32.31) on the low and filled the gap as well on Friday on more solid volume. Well positioned to make the breakout and move to an all-time high; STE used the October selling to consolidate and set up a new foundation to rally from. Like that action and ready to move in as it continues the bounce higher though it might try to slide laterally for a couple of sessions and form a handle before it does.
Volume: 1.07M Avg Volume: 769.13K
BUY POINT: $34.92 Volume=1.2M Target=$41.95 Stop=$32.48
POSITION: STE CG - Mar. $35c (56 delta) &/or Stock
http://www.investmenthouse.com/ci/ste.html
Play Date: 11/01/2008
SYNA (Synaptics--$30.89; +0.79; optionable): Business software
http://biz.yahoo.com/p/s/syna.html
EARNINGS: Announced 10-23-08
STATUS: Reverse head and shoulders. A neat 8 week base has formed over the 200 day SMA (25.44), part of a base on base pattern. SYNA produced a nice 8 month cup with handle through July and broke higher to start August. It rolled over with the market, however, and sold off into the current base. Volatile, but it has come out with a nice base and indeed started higher to end last week with an upside gap Thursday on strong volume, continuing the move into Friday. Looking for some more good trade as SYNA makes the break higher. One of the few in the market with a solid base under it.
Volume: 1.331M Avg Volume: 1.651M
BUY POINT: $31.72 Volume=2.4M Target=$37.95 Stop=$29.54
POSITION: SXD AF - Jan. $30c (61 delta) &/or Stock
http://www.investmenthouse.com/ci/syna.html
Play Date: 11/01/2008
WBSN (Websense--$19.52; +0.27; optionable): Internet webinar, conferencing, etc.
http://biz.yahoo.com/p/w/wbsn.html
EARNINGS: Announced 10-28-08
STATUS: Double bottom w/handle. After a steep, nasty selloff to start October, reversing a nice breakout move in mid-September, WBSN caught itself near the early 2008 bottom and bounced. Formed the current 4 week double bottom pattern, and looks to be working on something of a handle to end the week. Tapping at the 50 day EMA (19.80) the past three sessions, setting that as the point to beat for a breakout move. Great volume Wednesday, nice below average volume to end the week showing no selling. Looking for that volume to kick in and send WBSN to a new breakout though it could take a couple of sessions to finish the handle shakeout/consolidation and then show us the breakout move.
Volume: 460.902K Avg Volume: 738.103K
BUY POINT: $19.94 Volume=1M Target=$23.95 Stop=$18.65
POSITION: DQH AD - Jan. $20c (54 delta) &/or Stock
http://www.investmenthouse.com/ci/wbsn.html
New buy point on current position:
Play Date: 11/01/2008
AAPL (Apple Computer--$107.59; -3.45; optionable)
http://biz.yahoo.com/p/a/aapl.html
EARNINGS: 10-21-08
STATUS: Double bottom w/handle. Looking at the Apple again as it tests back modestly after a nice break higher off the second low in its short 4 week pattern. Make a higher low on that move and surged nicely for us, already banking us some gain. Now it is fading back to form a handle to the pattern and after it bottoms and starts back up we will be ready to move in once more.
Volume: 58.823M Avg Volume: 42.866M
BUY POINT: $108.48 Volume=65M Target=$124.75 Stop=$103.11
POSITION: QAA AA - Jan. $105c (60 delta) &/or Stock
http://www.investmenthouse.com/ci/aapl.html
Downside: In the event the market stalls.
Play Date: 11/01/2008
SOX (Philly Semiconductor Index--$239.47; +4.42; optionable)
STATUS: Continuing downtrend. SOX rallied last week, managing to move through the 10 day EMA (232.43), making it up to the 18 day EMA (241.90) Friday before backing off some on the close. This is a rather typical upside bounce in SOX' 2.5 month downtrend. If the overall market breaks higher once more SOX will likely follow. If not, SOX is in prime position to roll back over and drop once more in its downtrend. A move to the target that is basically the prior closing low and thus somewhat conservative, lands a 57%ish gain.
BUY POINT: $238.97 Volume=0 Target=$211.00 Stop=$242.21
POSITION: SOO XH - Dec. $240p (-45 delta, low OI)
http://www.investmenthouse.com/ci/sox.html
Good Investing!
Jon L. Johnson and your IH Alerts Team
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 in 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. Good Investing!
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