|
|
us stock market, trade stock
Begin Part 2 of 2
Dow: Closed at 9910.72
Resistance: 10,100 held for many tests before breaking. The March down trendline at 10,130, a key point on any relief bounce. The 18 day MVA is at 10,166.02, another point of resistance in downtrends. 10,300 blocked the move the last time it made to that level, and the up trendline from September is right there at 10,350. After that is 10,400, the barrier to the upper half of the March trading range. The top of the June, July, and August 2001 trading range at 10,600 (10,679 intraday high) marks the top half of the March trading range.
Support: The 200 day MVA (9933.08) was undercut, but it still has not been definitively broken. After that it could drop to 9500 as it has entered into that shelf of support from 9500 to 10,100.
Weekly Economic Calendar (All times Eastern). The figures are the consensus expectations, not ours.
4-29-02
Personal Income, March (8:30): 0.5% versus 0.6% prior
Personal Spending, March (8:30): 0.4% versus 0.6% prior
4-30-02
Chicago PMI, April (10:00): 55.50 versus 55.7 prior
Consumer Confidence, April (10:00): 108.0 versus 110.2 prior
5-1-02
Auto Sales, April (00:00): 6.0M versus 6.0M prior
Truck Sales, April (00:00): 7.3M versus 7.3M prior
ISM Index, April (10:00): 54.6 versus 55.6
Construction Spending, March (10:00): -0.1% versus 1.1% prior
5-2-02
Initial Claims, 4/27 (8:30): NA versus 421K prior
Factory Orders, March (10:00): 0.7% versus 0.3% prior
5-3-02
Nonfarm Payrolls, April (8:30): 60K versus 58K prior
Unemployment Rate, April (8:30): 5.8% versus 5.7% prior
Hourly Earnings, April (8:30): 0.3% versus 0.3% prior
Average Workweek, April (8:30): 34.3 versus 34.2 prior
ISM Services, April (10:00): 57.5 versus 57.3 prior
SUBSCRIBER QUESTIONS
Q: In the current environment stops of 7% seem quite wide and it would seem if the entry is close to the pivot point these could be much tighter. Myself I use much tighter stops and although whipsawed occasionally, losses are kept to a minimum. Of course, I have the luxury of watching the market all day.
A: In this market we agree that keeping loss cutting points tight is wise. When breakouts fail or moves reverse, preserving as much capital as possible is important. That is why we are keeping tight trailing stop losses following moves higher. Not too tight; we often use the 18 day or 10 day MVA on breakouts because stocks tend to use these as support on uptrends after breakouts. Stocks can undercut them intraday, however, so we put our stop points below the exact levels if we feel it is going to give normal pullbacks and want to allow the stock to continue bouncing higher. If it gets closer to our target and shows topping signs and we want to preserve the gain, we will move them up further or just go ahead and take the gain. Still, when we take a position we want to give it a chance to work for us without an immediate undercut of our stop. After it makes that initial move we then have latitude to raise the stop level up tighter, again usually using the 18 or 10 day MVA. These points usually keep us well less than 7% stops, and if the stock continues to run of course, we are looking then at preserving gains and not simply cutting losses short.
Good movers: OEX put is rocking. WOOF was a highlighted watchlist stock Thursday and made the move! ULAB is moving, but it needs the volume. Puts all had good down sessions Friday.
THE PLAYS:
Best Plays: Many of our stocks have made good moves!
1) ARW: Put. Breaking down on big volume.
2) BVF: Put. Breaking down hard.
3) GWW: Put. Low volume test of the 50 day MVA; the kiss goodbye.
4) FIX: Very nice pattern.
5) JILL: Nice test of earlier breakout.
6) AMGP: Very nice pullback to the 10 day MVA.
NEW PLAYS:
New Puts:
ARW (Arrow Electronics--$25.96; -0.55; optionable): Wholesale electronics
http://biz.yahoo.com/p/a/arw.html
STATUS: Put. Downtrending since January, ARW formed a descending wedge with the bottom of the wedge riding the 200 day MVA (26.73) as it rode down with lower and lower highs. Wednesday it broke below the 200 day MVA, tested it Thursday, and then tanked below again on Friday on very strong volume (884K; avg. is 595K). Volume has been ratcheting up on down days, showing distribution. Money flow has been dropping.
BUY POINT: 25.70 on volume of 700K or better. Target=22. Stop=27.50.
POSITION: June or July 30p to buy (ARW RF (74 delta) or ARW UF (60 delta), respectively).
http://www.investmenthouse.com/cd/arw.html
BVF (Biovail--$46.45; -2.05; optionable): Drug delivery systems
http://biz.yahoo.com/p/b/bvf.html
STATUS: Put. Low volume double top in March and April gave way to heavy selling last week. Broke below the 200 day MVA (48.03) Thursday, but recovered in a massive reversal. Friday BVF gapped below the 200 day MVA and sold hard again on above average volume (2.55 million; avg. is 1.4 million). What we are looking for is a test of the 200 day MVA to give the kiss goodbye, and then we will take positions on the fall from there. Poor price/volume action, and money flow is tanking as heavy selling is underway in the stock.
BUY POINT: After a test of 48, a move below 47.25 on continued above average volume. Target=42. Stop=49.
POSITION: July 55p to buy (BVF SK; low OI; 65 delta)
http://www.investmenthouse.com/cd/bvf.html
ETM (Entercom Communications--$53.82; -1.18; optionable): Radio broadcasting
http://biz.yahoo.com/p/e/etm.html
STATUS: Put. Another weak double top in March and April has given way to higher volume selling. Friday ETM undercut its 50 day MVA (54.30) on its second straight day of above average volume (363K; avg. is 325K). It has been a strong performer, but the low volume double top has been the hallmark of the beginning of selling in this market.
BUY POINT: 53.45 on 375K+. Target=47.50. Stop=56.
POSITION: June 60p (ETM RL; low OI; 71 delta) or September 60p (ETM UL; low OI; 58 delta- - more time, lower delta).
http://www.investmenthouse.com/cd/etm.html
INTC (Intel--$28.12; -0.97; optionable): Semiconductors
http://biz.yahoo.com/p/i/intc.html
STATUS: Put. INTC is hanging around in a bad neighborhood, trading below the 200 day MVA (29.63) more in April than it is trading above it. Now there is support at 28 where the stock closed Friday. There is a November consolidation there and then another test of that level in early April for several days. Volume has not been huge on the selling, trading off between strong up days and strong down days. Friday volume was below average on the selling (39 million; avg. is 45 million). If the stock breaks 28, it is pretty much a cinch down to 24. What we will probably get is a test of the 200 day MVA once again on a bounce on the Nasdaq, but then if there is no volume it will turn back down.
BUY POINT: 27.65 on volume of 45 million or better. Target=24. Stop=31.
POSITION: July 32.50p (INQ AZ; 69 delta) or July 35p (INQ SG; 79 delta) to buy.
http://www.investmenthouse.com/cd/intc.html
OMC (Omnicom Group--$89.60; -3.29; optionable): Advertising agency
http://biz.yahoo.com/p/o/omc.html
STATUS: It was a tough day for advertising. OMC was forming a 2-month pennant, showing a doji on the 50 day MVA (92.20), but then tanked below the 50 day Friday on sharply higher, above average volume (2.25 million; avg. is 1.3 million). What we will look for here is the test of the 50 day MVA on lower volume, and then the resumption of selling. When the pattern has been a decent one and we see a breakdown below key support, we prefer to see the stock test the breakdown and fail. That is the safest entry point.
BUY POINT: After a test of 92 on lower volume (1 million or less), a resumption of selling and a move below 91 on rising volume. Target=85. Stop=93.50.
POSITION: July 95p to buy (OMC SS; delta 60).
http://www.investmenthouse.com/cd/omc.html
New upside plays:
FIX (Comfort Systems USA--$4.85; +0.01; no options): Construction contractor
http://biz.yahoo.com/p/f/fix.html
STATUS: Cup w/handle. FIX is in a 4-month cup with handle after and recently hit a 52-week high after a nice move off of its 2001 low starting back in September. The stock broke out of the cup in early April on massive volume, but for the past two weeks volume has tapered off to well below average levels other than two above average volume spikes, the last occurring on Friday as the stock moved up in the handle off of the 18 day MVA (4.73) (164K; avg. is 145K). Excellent buying and huge money flow complement excellent price/volume action that shows 6 accumulation weeks to one distribution week during this handle.
BUY POINT: 5.07 on volume of 225K or more. Target=6.96. Stop=4.60
POSITION: Stock.
http://www.investmenthouse.com/cd/fix.html
THER (Therasense--$24.85; +0.25; no options): Medical instruments
http://biz.yahoo.com/p/t/ther.html
STATUS. Cup w/handle. A new issue in October 2001, THER has undergone a 4.5 months correction, forming a cup and the last four sessions the start of the handle. After a high volume move up from the bottom of the cup on strong volume, trade has backed off the past four sessions as it should (297K Friday; avg. is 283K). Money flow is excellent as is price/volume action which shows 6 accumulation weeks to just 2 distribution weeks during this base.
BUY POINT: 25.55 on volume of 450K or more. Target=30.66. Stop=23.75.
POSITION: Stock
http://www.investmenthouse.com/cd/ther.html
JILL (J. Jill Group--$31.64; +0.64; optionable): Catalog retail
http://biz.yahoo.com/p/j/jill.html
STATUS: Testing BO. JILL is currently testing its March breakout of a 14-months cup with handle base. The first test was in March and early April, and over the past two weeks the stock has pulled back again to the high on the left side of the handle (30.50), tapping the 18 day MVA Friday on the low (30.65) and rallying off of that level on huge volume (710K; avg. is 244K). Buying has been solid for two months and money flow is excellent. Price/volume action shows strong accumulation over distribution weeks (17 to 8 in the base). It looks ready for another rally off of the 18 day MVA, and it rises $4 to $5 on each such bounce.
BUY POINT: 32.25 on volume of 500K or more. Target=36. Stop=29.95.
POSITION: We are looking primarily at options to leverage the best return on the bounce. September 25c to buy (JUI IE; delta 82).
http://www.investmenthouse.com/cd/jill.html
CONTINUING PLAYS:
AMGP (Amerigroup--$33.50; 0.00; no options, new issue): Health care plans
http://biz.yahoo.com/p/a/amgp.html
STATUS: Testing breakout. A new issue in November 2001, AMGP formed its fist base from January to March, broke out, and is continuing its low volume pullback to the 10 day MVA (33.42). Friday's range was a mere 27 cents as the stock showed a tighter doji on volume that moved back above average (169K; avg. is 150K). Good buying and good money flow. Price/volume action is very good as volume surged on the rally and has pulled back handily on this test. Looks ready for a solid move higher. One of the better sectors.
BUY POINT: 34.25 on volume of 200K or better. Target=41.10 (initial). Stop=31.85.
POSITION: Stock (no option chain yet).
http://www.investmenthouse.com/cd/amgp.html
PLCE (Children's Place--$35.69; -0.33; optionable): Children's apparel
http://biz.yahoo.com/p/p/plce.html
STATUS: Ascending wedge. PLCE is trying to break over long-term resistance at 35 to 36, moving off of the 50 day MVA on very strong volume Tuesday and Wednesday. It stalled out Thursday and Friday on the market selling, but volume peeled way back as it did (190K; avg. is 230K). We need to wait patiently for the break over resistance on strong volume. Buying has surged in the past week. Again we are looking for a breakout to kick off a move that lets it work toward its old highs of 50 to 55.
BUY POINT: 37.45 on volume of 1 million or better. Target=49. Stop=34.83.
POSITION: Stock and/or September 30c to buy (TUY IF; 53 OI).
http://www.investmenthouse.com/cd/plce.html
Continued put:
GWW (W.W. Grainger--$55.05; +0.40; optionable): Wholesale Electronics
http://biz.yahoo.com/p/g/gww.html
STATUS: Put: Breach of 50 day MVA. Thursday and Friday GWW moved back up to make the test of the 50 day MVA (55.54) that we were looking for on the put play. It hit 55.84 on the high and fell back below the 50 day MVA, closing well off of its high. Volume fell on the test as it should (325K; avg. is 457K). This looks to be the 'kiss goodbye,' our favorite entry point on put plays.
BUY POINT: 53.95 on volume of 500K or better. Target=50. Stop=56.
POSITION: July 60p to buy (GWW SL; low OI, Delta 76)
http://www.investmenthouse.com/cd/gww.html
WATCHLISTS:
Awaiting Breakout Watchlist: These plays have not reached the buy point yet.
BRO (Brown & Brown--$33.11; -0.77; optionable): Surety and title insurance
STATUS: Cup w/handle. Still in the handle, but is pulling back to test the 50 day MVA (32.85) as the bottom of the handle. Volume is still below average.
BUY POINT: 35.63 on volume of 585K+. Target=42.75 (new high territory). Stop=32.95.
POSITION: Stock and/or September 30c to buy (BRO IF; low OI for now, but delta of 80).
http://www.investmenthouse.com/cd/bro.html
CMH (Clayton Homes--$16.90; -0.31; optionable): Manufactured housing (mobile homes)
STATUS: Reverse head and shoulders. CMH is moving toward a new 52-week high as it works through a 4-month base that tested just below the 200 day MVA on the low (that formed the head). It is now working on moving past the neckline in the pattern that is represented by the December high at 17.62. That is the point to beat. Friday the stock moved back down on lower volume (388K; avg. is 510K).
BUY POINT: 17.72 on volume of 750K or more. Target=21.25. Stop=16.40.
POSITION: Stock and/or August 15c to buy (CMH HC; low OI, delta 81).
http://www.investmenthouse.com/cd/cmh.html
DVA (Davita $25.80; -0.09; optionable): Specialized health services
STATUS: Flying plateau. Still moving laterally after the break upward 6 sessions back.
BUY POINT: 26.05 on volume of 800K. Target=31.25 (initial). Stop=24.25.
POSITION: Stock and/or October 22.50c to buy (DVA JX).
http://www.investmenthouse.com/cd/dva.html
XL (XL Capital--$93.07; -0.30; optionable): P&C insurance
STATUS: Run to $100. Moved below the 50 day MVA Thursday, showing doji's on very low volume (444K; avg. is 850K). We have been waiting for that run to 100. Perhaps this is a low volume shakeout.
BUY POINT: 95.55 on volume of 1m 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
Current plays Watchlist: These are plays that have hit the buy point and we are currently monitoring.
AMMD (American Medical--$21.91; -2.34; optionable): Medical appliances
STATUS: Double bottom with handle. Broke out Tuesday on strong volume but was clobbered Friday, breaking below the 50 day MVA (22.26) on lower volume than the breakout, but still strong rising volume (471K; avg. is 360K). What was an orderly test of the breakout turned ugly. We are going to see if the stock will move back over the 50 day MVA Monday and give us a better exit point after the initial clubbing.
BUY POINT: No new positions as the high volume reversal changed the character of the play. We will look for a move over 22.26 on stronger volume to maintain positions, but if it does not move over that level on stronger volume, we will exit.
http://www.investmenthouse.com/cd/ammd.html
ESI (ITT Educational--$51.06; -0.74; optionable): Education and Training
STATUS: Successful test of breakout. Closed well off the high Thursday and sold lower Friday on lower, average volume (134K).
BUY POINT: Riding current positions. Want it to hold 50 on a further test.
http://www.investmenthouse.com/cd/esi.html
GMP (Green Mountain Power--$18.80; -0.10; no options): Electric utility
STATUS: Cup with handle. Hit the buy point Thursday on above average volume, but backed off Friday as volume fell (6100; avg. 6350). Waiting for more volume to come in
BUY POINT: 18.85 on volume of 15,000 or more. Target=22.62. Stop=17.75
http://www.investmenthouse.com/cd/gmp.html
MAR (Marriott--$45.59; -0.29; optionable): Lodging
STATUS: Ascending wedge. Hit the buy point Wednesday and held up well Thursday and Friday on low volume (740K; avg. is 1.15 million). Waiting for a better day to move again. Still a buy, but we are not chasing it past 46.75.
BUY POINT: 46.05 on volume of 1.5 million+. Target=55.25. Stop=42.80
POSITION: Stock and/or October 40c to buy (MAR JH).
http://www.investmenthouse.com/cd/mar.html
MVL (Marvel Enterprises--$7.99; -0.76; no options): Toys and Games
STATUS: Broke out Monday and rallied to Wednesday when it showed the tombstone doji. It has tanked on high volume since then. Another breakout gone bad. Looking for a bounce back over 8 to exit positions if volume remains light on a recovery (1.33 million Friday; avg. is 344K; heavy selling).
BUY POINT: Looking for a bounce up over 8 toward 9.25 to give us an exit point.
http://www.investmenthouse.com/cd/mvl.html
QFAB (Quaker Fabric--$13.98; +0.18; no options): Textile maker
STATUS: Breakout test. Not sexy, but it is something investors understand, and it has a solid business. Hit the buy point Friday but could not hold the gain as volume backed off again (169K; avg. is 115K). Looking for it to try again on stronger volume.
BUY POINT: 14.31 on volume of 200,000 or more. Target=17.50. Stop=13.25
POSITION: Stock (no option chain)
http://www.investmenthouse.com/cd/qfab.html
Puts:
BRCD (Brocade--$23.26; -1.14; optionable): Telecom
STATUS: Put. Tried to rally Thursday, but reversed Friday, selling again on below average volume (10,4 million; avg. 16.6m). Riding positions to target: 21.75.
http://www.investmenthouse.com/cd/brcd.html
CUM (Cummins--$43.46; +0.07; optionable): Big engines
STATUS: Put. Very weak test of the 50 day MVA Friday (44.70), showing a doji on very low volume as it could not move up. Looks ready to fall some more.
BUY POINT: Can add to positions on a move below 43 on volume of 900K+. Target=39 to 40. Stop=45.50.
POSITION: September 50p to buy (CUM UJ; 100 OI)
http://www.investmenthouse.com/cd/cum.html
FDS (Factset Research--$36.26; +0.81; optionable): Information services
STATUS: Put. Hit the buy point Thursday but rallied Friday. Volume was lower and below average (141K; avg. is 145K).
BUY POINT: New positions can be taken on a move below 36 on volume of 150K+. Target=32. Stop=38.
POSITION: September 45p to buy (FDS UP; no OI at this point, but we like the time). June 45p (FDS RI) have no OI either.
http://www.investmenthouse.com/cd/fds.html
NAV (Navistar--$39.85; -0.05; optionable): Trucks
STATUS: Moved lower Thursday, but caught some support at 40, showing a doji but on very low volume (499K; avg. 625K). Still riding positions toward target of 37.75.
http://www.investmenthouse.com/cd/nav.html
WL (Wilmington Trust--$63.69; -0.55; optionable): Regional bank
STATUS: Put. Continuing to drop on above average volume (131K; avg. is 76K). Riding current positions.
BUY POINT: Riding current positions. Target=62 (200 day MVA); 60 if that breaks. Stop=67.
OEX (S&P 100--$532.37; -8.32; optionable): S&P 100 options
STATUS: Put. Tanking massively, we are now simply riding the positions lower toward the target at 525 though we are aware of a potential bounce. On further selling Monday, if it gets near 525 we will take profits to avoid a bounce.
BUY POINT: Target: 525 initial. Stop= 549.
POSITION: May 550p to buy (OEB QJ).
http://www.investmenthouse.com/cd/$oex.html
SYMC (Symantec--$34.15; -1.78; optionable): Internet software
STATUS: Put. Thursday's earnings pop was short lived as SYMC sold Friday, losing all ground it gained. Volume was lower but still above average (4.5 million; 3.77m avg.).
BUY POINT: Riding current positions. Target: 30. Stop=36.25.
http://www.investmenthouse.com/ct/symc.html
VARI (Varian--$32.-3; -0.97; optionable): Scientific & Technical Instruments
STATUS: Head and shoulders. Continued down Friday on a resumption of stronger volume (290K; avg. is 280K). Heading toward target at 31.50.
http://www.investmenthouse.com/ct/vari.html
Upside:
BYBI (Back Yard Burgers--$8.05; -0.35; no options): Restaurants
STATUS: Cup with handle. After the breakout attempt Tuesday that hit the aggressive buy point but not the breakout buy point, BYBI is in trouble, selling to the 18 day MVA Friday on rising volume (38K; avg. is 43K). We will look for a bounce off the 18 day MVA to exit if it cannot recover on higher volume. The pattern has not broken down, but it needs to recover here.
BUY POINT: Breakout: 9.55 on volume of 100K+. Target=11.50 (initial). Stop=8.15.
POSITION: Stock
http://www.investmenthouse.com/cd/bybi.html
ULAB (Unilab--$29.45; +0.50; optionable): Healthcare software & services
STATUS: Double bottom. Still rising in price, but not volume (204K; avg. is 466K). This makes the breakout suspect, and we need to move those stops up to the 28 level.
BUY POINT: Target: 35. Stop: 26.97 (7%)
http://www.investmenthouse.com/ct/ulab.html
UPS (United Parcel Service--$60.41; +0.19; optionable): Delivery
STATUS: Staying alive above the 50 day MVA on declining volume (1 million; avg. is 1.5m). Holding just above the stop at 59 for now.
BUY POINT: Target: 66.44 represents a former high and is the initial target. Stop Advisory: 59
http://www.investmenthouse.com/ct/ups.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.
|
us stock market
trade stock
|
