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us stock market, trend trading stock
Begin Part 2 of 2
SUBSCRIBER QUESTIONS
Q: How can we tell which stocks are for trades and which are for long term holds?
A: In the market that we have had we have been very reluctant to hang onto many positions longer term with breakouts racing up for a good gain and then turning over and giving it all back. Thus we are taking gains on nice moves on breakouts and the other moves we are investing in. We have been pretty ruthless in doing this regardless of the move. We have been taking at least part of our position off the table when our targets are hit. If the move is strong, we are letting part of the position ride, particularly in sectors that have been performing the best: health services, defense, retail. As the market improves, i.e., breakouts hold their tests with more frequency, we will hold positions longer, and we will advise specifically if we think it has long term hold potential as with JNC.
TEAM TRADES
Good moves again Friday on the target side as well as on new positions. SCIO, AEN, LEXR all made solid moves that we got in on. We hit a lot of targets and that freed up some cash to move on to some other great movers. There were many others made the moves we were looking for as well.
LEXR: An interesting bonus play on the SSR, we were watching the stock build toward the buy point all session. The stock formed a reverse head and shoulders over the past three months, so we were waiting for the breakout over the neckline before we got in. Volume was building but the stock could not get past 2.90. Volume is not huge on this stock, about 105,000 average. It was getting close when it exploded at 12:30. It then plateaued for an hour while volume moved over average. Right before 1:30 it hit the buy point and volume was huge. We issued the alert but missed it on the surge up to 3.15. Over the next 15 minutes it tested the breakout, hitting 3.05 quickly. We had entered an order with a limit of 3.08 to try and catch it on a test, and it worked out. The stock was volatile the rest of the session, but continued to climb up the 15 minute MVA, closing at 3.14. A very strong move. We have a target inside the recent high but we are most likely going to adjust that higher based on the strength of this move.
THE PLAYS:
Best Plays: Many of our stocks have made good moves!
1) OAKT: Ready to move on some good news.
2) ASCA: Nice pattern.
3) PDQ: Another good pattern.
4) RGBK: Nice consolidation.
5) NFB: Making the break now on huge volume.
6) NKE: A put that looks ready to fall some more.
7) AEN: Making the breakout on massive volume.
New Plays:
OAKT (Oak Technology--$15.69; +1.14; optionable): Semiconductor
http://biz.yahoo.com/p/o/oakt.html
STATUS: Double bottom. OAKT is still in a deep correction, but as with the better performing semiconductors, it has come off of the low and has formed a nice pattern, awaiting good news to break it out. The current pattern is a double bottom with handle riding above the 200 day MVA (11.50). Friday it move up over the handle high (which would be the buy point), but though volume rose, it was still below average (663K; avg. is 795K). Given the low volume on the move, we want to see it break over the closing high on the left side of the double bottom to take positions. Money flow ahs moved ahead of price, and relative strength is ready to breakout as well. Price/volume action is positive in the pattern.
BUY POINT: 16.50 on volume of 1.3 million ore better. Target=19.94. Stop=15.35
POSITION: Stock and/or July 12.50c to buy (KAU GV).
http://www.investmenthouse.com/ct/oakt.html
NWRE (Neoware--$10.18; +0.25; no options): Networking hardware
http://biz.yahoo.com/p/n/nwre.html
STATUS: Throwing flag poles. Taking a look at this stock again. It continues to bound up its 50 day MVA, making strong moves when it does bounce. It jumped up Monday on huge volume and then moved laterally the rest of the week, continually tapping at 9.85 on the intraday lows as volume dropped dramatically (81,200 Friday; avg. is 231K). We like that it is tapping the low and bouncing up each session. With the great money flow we are looking for it to hold near 9.85 and deliver a solid bounce higher for a move to an all-time high and a nice, quick gain.
BUY POINT: 10.45 on volume of 230K or more. Target=12.54 Stop=9.50
POSITION: Stock
http://www.investmenthouse.com/ct/nwre.html
NFB (North Fork Bancorp--$36.42; +0.84; optionable): Northeastern bank
http://biz.yahoo.com/p/n/nfb.html
STATUS: Another regional bank moving to a new high, NFB blasted off Friday on huge volume (1.38 million; avg. is 560K). It tapped its 50 day MVA last week, then Thursday pulled back before the big volume Friday. We are looking to pick it up here with the excellent money flow and volume.
BUY POINT: Up to 37 on continued strong volume. Target=43.50. Stop=34.25.
POSITION: Stock and/or August 30c to buy (NFB HF).
http://www.investmenthouse.com/ct/nfb.html
XL (XL Capital--$96.56; -0.09; optionable): P&C insurance
http://biz.yahoo.com/p/x/xl.html
STATUS: Run to $100. XL is in more or less a 6-month flat base, trading between 90 and 96 the past 2 months. It made a run to 98 in the middle of last week and has since pulled back on very low volume (426,500; avg. is 890K), showing a tight doji on Friday that tapped the 10 day MVA on the low (96.56). Relative strength is excellent. On this play we will pick it up as it bounced from here, letting it move up on the momentum to 100 and beyond.
BUY POINT: 97.25 on volume of 900K or better. Target: 102. Stop=94
POSITION: We are looking at options on this one as it is high priced and the move is limited. July 90c to buy (XL GR).
http://www.investmenthouse.com/ct/xl.html
ASCA (Ameristar Casinos--$29.85; +0.36; no options): Resorts & casinos
http://biz.yahoo.com/p/a/asca.html
STATUS: ASCA ran steadily to a new high in January (31.23), and after the solid trend up corrected back and formed a saucer. ASCA pulled back over its 50 day MVA (26.76) to end March, and then tested that level again before surging up the past week, challenging its high. It hit up to 30.80 Wednesday and is dipping back a bit, and we are looking for the continued formation of a handle, with more drift back on low volume. That action can set up a breakout move. Strong buying and relative strength.
BUY POINT: 30.90 on volume of 250,000 (average 169,000). Target: 37. Stop: 28.74
POSITION: Stock and/or June $25 calls to buy (UWT FE - 9 open interest)
http://www.investmenthouse.com/ct/asca.html
PDQ (Prime Hospitality--$13.53; +0.35; optionable): Lodging
http://biz.yahoo.com/p/p/pdq.html
STATUS: In a rough 15-month cup with handle base of sorts, interrupted by the events back in September. It has rallied well off of that low below 9, testing the 200 day MVA on the way up, and most recently the 50 day MVA (12.40). After pulling back late March an dearly April it started to rally this week on a volume surge all five days (268K Friday; avg. is 175K). Money flow is shooting through the rough, and relative strength has already broken out. Looks ready to make the breakout, not to an all-time high, but to a 3-year high.
BUY POINT: 13.99 on volume of 250K+. Target: 17.88. Stop=13.
POSITION: Stock and/or July 10c to buy (PDQ GB; low OI) or July 12.50c (PDQ GV; lower delta).
http://www.investmenthouse.com/ct/pdq.html
Puts:
NKE (Nike--$57.86; +0.31; optionable): Athletic apparel
http://biz.yahoo.com/p/n/nke.html
STATUS: NKE has been a strong performer for over 6 months, recently topping, then jumping up in March on good earnings. It gapped down, however, but could not hold the 50 day MVA on an attempted bounce from that level (now at 58.95). It breached the 50 day MVA, tested it last week, and started to sell harder Thursday on higher volume (1.05 million Friday; avg. is 1.37 million). The pattern is a head and shoulders with a weaker right shoulder; that means the drop could be a bit harsher. All the better for a put. Money flow has been tailing off and the price/volume action has turned negative.
BUY POINT: Below 57.40 on above average volume. Target=53. Stop=59.
POSITION: July 60c to buy (NKE SL); delta is 60, but you don't get much more if you buy deeper in the money and pay a lot more per option.
http://www.investmenthouse.com/ct/nke.html
Flipping a play:
VARI (Varian--$34.32; -1.46; optionable): Scientific & Technical Instruments
http://biz.yahoo.com/p/v/vari.html
STATUS: Did not deliver the bounce off the 18 day MVA, instead tanking below it Friday on some huge volume (602,800; avg. is 275K). Without the bounce, it has formed a head and shoulders pattern. Now the best play for us is a move up to test the 50 day MVA (35.05) and then a fall from there. That is the 'kiss goodbye,' and that is the safest entry point.
BUY POINT: A test of 35.05 on declining volume. Target=32. Stop=35.75.
POSITION: August $40p to buy (IUA TH). Delta is -58 and low open interest.
http://www.investmenthouse.com/ct/vari.html
CONTINUING PLAYS
Continued puts:
OEX (S&P 100--$553.74; +4.28; optionable): OEX options
STATUS: We were ready to sell Thursday if the OEX hit 58.50 again during the session, but a modest rally at the close kept it just above that level. Thought we would sell the next morning, but the low was right at 550. The index bounced. We will see if we get a drop over the next two sessions back to the 550 level, and that will be good enough to take the gain. Will play a loose stop as it may pop early and then fade.
BUY POINT: Target 547. Stop=570.
http://www.investmenthouse.com/ct/$oex.html
BASING/TRADING RANGES:
AH (Armor Holdings--$28.08; -0.35; optionable): Security and Protection
http://biz.yahoo.com/p/a/ah.html
STATUS: Broke out Wednesday, but volume did not jump. The volume really kicked in Thursday as the stock closed well off a nice intraday gain. Friday it continued fractionally lower on lower, below average volume (193,700; avg. is 215K). We never like the higher volume reversals on breakouts. It shows that sellers were too eager to jump on the stock and sell it. It needs to hold 27.75. We won't let it fall below 26 on current positions. Again, if it gets some volume from here, target still 33.45.
BUY POINT: Holding positions for now as we see how the Thursday reversal plays out. Stop=26.
POSITION: Nothing new right now
http://www.investmenthouse.com/ct/ah.html
ASTSF (ASE Test Limited--$15.00; +0.15; optionable): Semiconductor Mftr.
http://biz.yahoo.com/p/a/astsf.html
STATUS: Again, it is still working through the double bottom with handle. As with many small semiconductors, ASTSF is awaiting some good news on the earnings front for semiconductors to give it a breakout move. If it does not come, it may get a breakdown move. Friday volume was 139,600 (avg. is 306K).
BUY POINT: Breakout: 16.75 on volume of 450K or better. Aggressive: 15.95. Target=20.90. Stop=15.45.
POSITION: Stock and/or August 12.50c to buy (QDQ HV).
http://www.investmenthouse.com/ct/astsf.html
WEDGES, PENNANTS, FLYING PLATEAUS
AEN (AMC Entertainment--$14.43; +0.48; no options): Movie Theaters
http://biz.yahoo.com/p/a/aen.html
STATUS: Made the breakout move Friday on big volume (778K; avg. is 171K). A strong move though it closed off of its intraday high by a half point. Not a bad move at all. Money flow continues to pour in and relative strength broke out on the move. It is still a buy on this move as the buy point was 14.30. We do not want to wait too long to take positions on this move, however (limit is 15 on this breakout). Looking strong.
BUY POINT: A buy up to 15 on continued strong volume (300K or better). Target: 17.75. Stop=13.25
POSITION: Stock.
http://www.investmenthouse.com/ct/aen.html
RGBK (Regions Financial--$34.73; +0.37; optionable): Regional bank
http://biz.yahoo.com/p/r/rgbk.html
STATUS: RGBK has made a nice push over the last six months, breaking out in late February over 2001 highs, which were the highs in a large double bottom. It has pulled into a lateral consolidation over the last five weeks, moving roughly between 33.50 and 35. It is bumping against the breakout point the past three sessions, rising Friday on sharply lower, below average volume (378500; avg. is 550.5K). Close to that breakout. Money flow and relative strength are super.
BUY POINT: Breakout: 34.96 on continued strong volume (minimum 745,000). Target: 40.50. Stop: 33.
POSITION: Stock and/or July $30 calls to buy (GVQ GF).
http://www.investmenthouse.com/ct/rgbk.html
UPS (United Parcel Service--$60.71; +0.33; optionable): Delivery
http://biz.yahoo.com/p/u/ups.html
STATUS: Still in a flat consolidation following its strong move up in February and early March. The range is very tight with some good price/volume action as it moves sideways. It remains solid, and it is a game of patience. We cannot, however, move in too early; let the breakout occur and then we move in. Friday the stock rose on solid, above average volume (1.8 million; avg. is 1.5 million). Holding up very well and money flow remains strong.
BUY POINT: Breakout: 61.10 on volume of 2 million or higher. Target: 66.44 represents a former high and is the initial target. Stop Advisory: 58.05
POSITION: Stock and/or July $55 calls to buy (UPS GK).
http://www.investmenthouse.com/ct/ups.html
WATCHLIST: We have cycled some stocks to watchlists after making a solid move or continuing the pattern. We are continuing to watch them and follow our positions, but do not need full write-ups to do so.
AM (American Greetings--$17.93; +0.18; optionable): Cards
http://biz.yahoo.com/p/a/am.html
STATUS: Made the bounce higher we were looking for as volume came in the stock Friday. Good start to the move. Target 21.88. Stop=16.40.
ATAC (Aftermarket--$22.00; +0.58; no options): Auto Parts
http://biz.yahoo.com/p/a/atac.html
STATUS: Reached way down Friday, but recovered for a positive finish. Volume was rising but still below average. Good recover, now we will see if it can add to the gains.
CKP (Checkpoint Systems--$17.70; -0.55; optionable): Security & Protection Services
http://biz.yahoo.com/p/c/ckp.html
STATUS: Thursday the breakout reversed from a high just over 19 (target 20); it closed higher on the session, but did not like the turn. Friday it fell but volume was much lower. We will see if the test holds at 17.
DRXR (Drexler Technology--$24.95; +0.85; optionable): PC hardware: storage
http://biz.yahoo.com/p/d/drxr.html
STATUS: A doji on the 10 day MVA Thursday turned into a gain Friday. Volume was still above average but lower on the move, so not much conviction. Still looks solid here, however. Target: 29.10
FBC (Flagstar Bancorp--$26.17; +0.29; no options): Savings & Loan
http://biz.yahoo.com/p/f/fbc.html
STATUS: Continued the move higher Friday, but no volume. Still in good shape on the move. On a pullback we look for 25 range to hold. Target: 29.94 (initial). Stop=23.30.
FNF (Fidelity National--$29.19; +0.14; optionable): Title insurance
http://biz.yahoo.com/p/f/fnf.html
STATUS: Looks as if it might be ready for a pullback to test the breakout at 28. Target: 34. Stop=26.45.
HBAN ($19.95; +0.12): Still looking ready to break to that new high as volume rose on s tight doji.
ITRI (Itron--$34.26; +0.11; optionable): Scientific & Technical electronics
http://biz.yahoo.com/p/i/itri.html
STATUS: Continuing the breakout, but showed a doji Friday on rising volume. On a test we look for 32.50 to hold. Target: 38.88.
OSI (Outback Steakhouse--$37.39; +0.26; optionable): Bloomin' Onions
http://biz.yahoo.com/p/o/osi.html
STATUS: Looks ready to make the break out of its 2.5 months cup with handle.
BUY POINT: 37.75 on volume of 800K or better. Target=45.25 (some resistance at 40 from the old high). Stop=35.50
POSITION: Stock and/or August $30c to buy (OSI HF).
POT (Potash CP--$66.72; -0.99; optionable): Mining, non-metals
http://biz.yahoo.com/p/p/pot.html
STATUS: Thursday showed a tombstone doji on rising volume. Another breakout we have to be worried about as it reversed Friday and sold hard but on very light volume. Want it to hold at 65 or better on a test. Target=77. Stop=63.50.
PRGX (PRG-Schultz--$14.00; +0.35; optionable): Management services
http://biz.yahoo.com/p/p/prgx.html
STATUS: Moving toward the breakout from its 7.5 month cup with handle. Volume was great Thursday, but very light Friday as it toyed with a breakout (269K; avg. is 520K). Price/volume action is great with up weeks on higher volume outnumbering down weeks on higher volume. Money flow and buying are solid.
BUY POINT: 14.28 on volume of 750K minimum. Target=17.75 (initial). Stop=13.15.
POSITION: Stock and/or July $10c (FPQ GB) or October $10c (FPQ JB) to buy.
http://www.investmenthouse.com/ct/prgx.html
SMSC (Standard Microsystems--$26.95; +2.13; optionable): Computer Networking
http://biz.yahoo.com/p/s/smsc.html
STATUS: Powered higher Friday, pushing the breakout further, almost hitting the target at 28. Volume was lower but still above average. All week volume has been super.
http://www.investmenthouse.com/ct/smsc.html
SYPR (Sypris Solutions--$18.40; +0.25; no options): Printed circuit boards
http://biz.yahoo.com/p/s/sypr.html
STATUS: Testing the breakout, showing a doji Friday as the stock held above 18 on volume that equaled Thursday's trade. Great breakout and willing to let it work for us. Target=20.22 initial; then 24. Stop=15.50
TYL (Tyler Technologies--$5.63; +0.13; no options): Internet software
http://biz.yahoo.com/p/t/tyl.html
STATUS: Looked super but Thursday reversed on us. Friday it recovered to hold over the 10 day MVA on continued strong volume.
WOOF (Vca Antech--$13.94; +0.00; no options):
http://biz.yahoo.com/p/w/woof.html
STATUS: Edging toward the breakout to a new high, but not there yet. We are waiting patiently for it. (104,700; average 113,800).
BUY POINT: Breakout: 14.35 on volume of 170,000 or higher. Target: 17.10. Stop Advisory (7%): 13.28
POSITION: Stock.
http://www.investmenthouse.com/ct/woof.html
ZLC (Zale Corp--$40.23; +0.43; optionable): Jewelry Stores
http://biz.yahoo.com/p/z/zlc.html
STATUS: Put. Broke the 50 day MVA Thursday and then moved up slightly Friday on rising, above average volume (377K; average 373,600). Looking for the breakdown to continue.
BUY POINT: After a test back toward 41, a drop through 39.80 on above average volume. From here: Through 39.50 on above average volume. Target: 36. Stop=42.25.
POSITION: May $45 puts to buy (ZLC QI - no open interest as yet)
http://www.investmenthouse.com/ct/zlc.html
Good Investing!
Jon L. Johnson and your Technical Traders Report 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.
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us stock market
trend trading stock
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