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Begin Part 2 of 2
THE PLAYS:
Best Plays:
1) SCS: Very nice flat base
2) IRM: Ready to breakout of the wedge
3) ODSY: Looks ready to bounce.
4) LPNT: Took a pause today.
5) JILL: Just needs volume.
6) Puts: TROW, AAPL, ARW, GWW
NEW PLAYS:
SCS (Steelcase--$17.20; +0.50; optionable): Business equipment
http://biz.yahoo.com/p/s/scs.html
STATUS: Flat base. SCS is in a current 2-month flat base that has been riding the 50 day MVA on the low (16.17). This is part of a larger 20-month cup base where this flat base is serving as the handle. Buying and money flow are excellent, and relative strength is already breaking out on this move. Volume has been predominantly lower the past three weeks, and today SCS exploded higher on very strong, above average volume (304K; avg. is 168K). After the base it looks ready.
BUY POINT: 18.10 on volume of 250K+. Target=22.25 (initial). Stop=17
POSITION: Stock and/or July 15c to buy (SCS GC; delta 83).
http://www.investmenthouse.com/cd/scs.html
IRM (Iron Mountain--$32.09; +1.29; optionable): Management services (storage).
http://biz.yahoo.com/p/i/irm.html
STATUS: Ascending wedge. In a wedge for the past 4 months, IRM has been tightening the range, making higher lows all the way up. Money flow is super as is relative strength (already breaking out on this move. Price/volume action has been great during this base with accumulation weeks outnumbering distribution weeks 4 to 1. Today it made a strong breakout move on huge volume (748K; avg. is 205K). It has early January highs to clear (32.50), but it looks as if it is going to beat those and move to that new high after a good base.
BUY POINT: 32.60 on volume of 500K or more. Target=39.25. Stop=30.75
POSITION: Stock and/or July 30c to buy (IRM GF; delta 70).
http://www.investmenthouse.com/cd/irm.html
New plays from Tuesday:
LPNT (Lifepoint Hospitals--$42.28; +0.28; optionable): Health care plans
http://biz.yahoo.com/p/l/lpnt.html
STATUS: Cup w/handle. Broke out of an 8-month cup with handle base Tuesday on solid volume and tried to add to the move today. It started up but did not take advantage of the market rally. It hit 42.77 on the high but fell off. Volume continued to increase, rising to 663K; avg. is 450K). Looking for another run over 42.50 on continued strong volume after today's pause.
BUY POINT: Up to 44, but we are looking at 42.50 on continued above average volume in excess of 700K. Target=51. Stop=39.50.
POSITION: Stock and/or August 35c to buy (PUN HG; delta 79; low OI).
http://www.investmenthouse.com/cd/lpnt.html
CAND (Candies, Inc.--$3.90; +0.34; no options): Footwear
http://biz.yahoo.com/p/c/cand.html
STATUS: Cup w/handle. Continued the breakout of the pattern today on continued powerful volume (896K; avg. is 110K). After ballistic moves such as this the stock can run out of steam and have to pullback for another rest. It gave no indication of that today so we are riding positions up toward the target.
BUY POINT: Target=4.95. Stop=3.35.
POSITION: Stock
http://www.investmenthouse.com/cd/cand.html
ODSY (Odyssey Healthcare--$34.22; +0.20; no options): Long-term care
http://biz.yahoo.com/p/o/odsy.html
STATUS: Test Breakout. New issue in December. Bounced a bit higher off the 18 day MVA today, but had no volume and the move just stalled (26,200; avg. is 135K). The pattern was a hanging man doji, but we don't put much into this as the stock has not made a run up to indicate a change in direction. We still like the play very much. Money flow and buying are solid, and price/volume action in the recent base showed very good accumulation.
BUY POINT: 34.60 on volume of 150K or more. Target=40 (initial). Stop=32.50
POSITION: Stock (no option chain yet).
http://www.investmenthouse.com/cd/odsy.html
GISX (Global Imaging--$18.65; -0.43; no options): Specialty retail
http://biz.yahoo.com/p/g/gisx.html
STATUS: Double bottom. Since peaking in January near 22, GISX has moved laterally between 16 and 20, setting up a double bottom and now forming a handle on volume that has settled down into quiet, boring below average trade. Just what we want to see in a handle, today at 107k (avg. is 245K). In addition the intraday lows have been lower, acting to shake out the last weak holders. Price/volume action shows accumulation weeks leading 5 to 1, a very nice ratio.
BUY POINT: 19.60 on volume of 350K+. Target=24.50. Stop=18.22.
POSITION: Stock.
FIX (Comfort Systems USA--$4.45; -0.25; no options): Construction contractor
http://biz.yahoo.com/p/f/fix.html
STATUS: Fell hard today. FIX has been in a 4-month cup with handle 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, then FIX showed a nice consolidation. However, a mild drop the last couple of sessions turned into a strong fall as FIX broke support (18 day at 4.69). Volume was up on the selling (190,500; avg. 134k), and FIX closed just above the 50 day (4.40). Could need some time to set up again.
http://www.investmenthouse.com/cd/fix.html
THER (Therasense--$24.43; -0.57; 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 now in a handle. After a high volume move up from the bottom of the cup on strong volume, trade has backed off as it should, and today THER dipped on low volume of 118,700 (avg. 295k). 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--$33.00; +1.46; optionable): Catalog retail
http://biz.yahoo.com/p/j/jill.html
STATUS: Solid move up today. JILL has been in a lateral consolidation, testing its recent breakout from a 14-month cup with handle base. It has shown quite a bit of volume of late while holding support, and today shot up on decreased, but still strong volume of 387,500 (avg. 256k). Hit the buy point, and it is a bit tight with the target for new positions (rising $4 to $5 on each bounce). 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).
BUY POINT: Riding existing positions. Target=36. Stop=29.95.
http://www.investmenthouse.com/cd/jill.html
AMGP (Amerigroup--$28.70; -1.85; no options, new issue): Health care plans
http://biz.yahoo.com/p/a/amgp.html
STATUS: Was testing its breakout, but got hammered on earnings and a valuation downgrade.
http://www.investmenthouse.com/cd/amgp.html
PLCE (Children's Place--$34.90; +0.28; optionable): Children's apparel
http://biz.yahoo.com/p/p/plce.html
STATUS: Ascending wedge. Dipped back again Tuesday, but is trying to hold the 18 day MVA (34.82), today showing a doji at that level with much stronger volume of 400,300 (avg. 256k). PLCE is trying to break over long-term resistance at 35 to 36, and made a strong move off of the 50 day MVA last week. It stalled and the selling Tuesday, although on low volume, was concerning with respect to a near-term breakout. We will look for a hold here, waiting patiently for the break over resistance on strong volume. Buying has surged in the past week. A breakout could 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
New Puts from the Weekend Report:
TROW (T. Rowe Price--$35.27; +0.20; optionable): Asset Management
http://biz.yahoo.com/p/t/trow.html
STATUS: Put. TROW broke back over the 200 day MVA (35.08) today, but on very low volume (404K; avg. is 625K). On the high (35.59) it tested the 10 day MVA and pulled back. The move was very weak. If the indexes turn back down at the down trendlines, we expect TROW to continue its fall after such a weak move. It is still below the neckline of the head and shoulders pattern (36), and it is faltering at that level.
BUY POINT: 34.40 on volume of 700K or more. Target=30. Stop=36.
POSITION: July 40p to buy (RQW SH).
http://www.investmenthouse.com/cd/trow.html
AAPL (Apple Computer--$23.98; -0.29; optionable): Personal computers
http://biz.yahoo.com/p/a/aapl.html
STATUS: Put. Apple is in a long base, and tried to make a move out of its bottom reaches two weeks back when it hit 26, but was pushed right back down. It gave up the 50 day MVA (24.11) last week, but has hung around. After hitting down to 23 last Friday, AAPL has bounced back to test the 50 day, and today hit down to 23.36 but managed to recover, although closing below the 50 day. Volume was down today (3.83m; avg. 5.54m), but volume has been tame for the past couple of weeks. In a weak Nasdaq we can still look at put positions, but we want to see more volume on the selling. We are looking at the 200 day MVA at 21 down to 20 as the target.
BUY POINT: 23.25 on volume of 5 million+. Target=20. Stop=24.50.
POSITION: July 27.50p to buy (AAQ SA).
http://www.investmenthouse.com/cd/aapl.html
ARW (Arrow Electronics--$26.30; -0.10; optionable): Wholesale electronics
http://biz.yahoo.com/p/a/arw.html
STATUS: Put. A put play that started down but swept back up a bit in the market rally. It made a fairly strong bounce Tuesday, but is not looking like it will hammer back through resistance (200 day at 26.78). Today ARW tapped up to 26.60 but showed a doji on lighter volume of 487k (avg. 564k). Looking for resistance to prevail and for ARW to turn back down and head toward the target with higher selling volume.
BUY POINT: New or additional positions on a drop through 25.50 on volume of 700K or better. Target=22. Stop=27.50.
POSITION: June 30p to buy (ARW RF).
http://www.investmenthouse.com/cd/arw.html
ETM (Entercom Communications--$54.65; +2.40; optionable): Radio broadcasting
http://biz.yahoo.com/p/e/etm.html
STATUS: Put. Got the move down Monday, but ETM chased us on a big bounce over the last two sessions. After a reversal on above average volume Tuesday, today ETM closed back over the 50 day MVA (54.13), hitting over the stop point (54.50; today's high 55.25) as volume dipped to 349,400 (avg. 332k). We will see if it will hold over the 50 day.
http://www.investmenthouse.com/cd/etm.html
INTC (Intel--$28.63; +0.02; optionable): Semiconductors
http://biz.yahoo.com/p/i/intc.html
STATUS: Put. Hit the buy point but recovered Monday, and has tested back up the last couple of sessions. Volume has been edging up, today at 46 million (avg. 45m), and INTC closed with a doji after again testing as low at 27.54. Holding existing positions while INTC battles overhead support from moving averages and its down trendline (10 day at 28.90 and 200 day at 29.65), looking for a continuation of the drop in tech weakness. For new or additional positions, looking for market weakness and a drop through 27.50.
BUY POINT: A drop through 27.50 on increased volume. Target=24. Stop=31.
POSITION: July 32.50p (INQ AZ; 66 delta) or July 35p (INQ SG; 77 delta) to buy.
http://www.investmenthouse.com/cd/intc.html
OMC (Omnicom Group--$88.99; +1.57; optionable): Advertising agency
http://biz.yahoo.com/p/o/omc.html
STATUS: After the huge drop OMC touched close to the put target Tuesday (low 85.15, target 85), reversing on strong volume and bouncing with the market. For any remaining positions, watching carefully for any further move up for an exit.
http://www.investmenthouse.com/cd/omc.html
GWW (W.W. Grainger--$55.36; -0.71; optionable): Wholesale Electronics
http://biz.yahoo.com/p/g/gww.html
STATUS: Put: Breach of 50 day MVA. Pushed up again Tuesday and made it through the 50 day (55.51) to close, but although volume was up it was just about average. Today GWW fell back, selling on lighter volume of 355,200 (avg. 439k), closing just below the 50 day and short of its intraday low of 54.87. Still looking for the drop, but the market rally has made it a bit stubborn.
BUY POINT: 53.95 on volume of 500K or better. Target=50. Stop=56.
POSITION: July 60p to buy (GWW SL; low OI, Delta 74)
http://www.investmenthouse.com/cd/gww.html
WATCHLISTS:
Awaiting Breakout Watchlist: These plays have not reached the buy point yet. We were thinking of calling this the 'waiting on breakdown' watchlist, but that really applies to the second list where the selling got brutal on some plays today.
BRO (Brown & Brown--$32.90; -0.30; optionable): Surety and title insurance
STATUS: Cup w/handle turned reverse head and shoulders. Another tight doji on the 50 day MVA after trying to drop out of the picture Tuesday but recovered well. Volume has remained below average on recent action (263K; avg. is 340K). Still very much in the pattern.
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--$17.00; -0.10; optionable): Manufactured housing (mobile homes)
STATUS: Reverse head and shoulders. A tight doji right at the neckline, tapping the 10 day MVA on the low (16.85). Volume rose but remained below average (374K; avg. is 510K). Strong sector and patiently awaiting the breakout.
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 $26.13; +0.21; optionable): Specialized health services
STATUS: Flying plateau. Tuesday jumped and fell back on strong volume, and then held the move today on even stronger, above average volume (1.09 million).
BUY POINT: New positions over 26.30 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
ITRI ($35.68; +0.03): Running into headwinds at 36 once again, showing a doji on below average volume (364K). Needs a very strong move over 36 on very strong volume.
PDQ (Prime Hospitality--$13.28; +0.39): Still in the handle of the long base, and today it made a strong move off of the 50 day MVA on a tremendous jump in volume (348K). It is starting to look like it is ready to breakout of its 15 month cup with handle. Breakout is 14.02 on this level of volume. Relative strength is already breaking out.
XL (XL Capital--$93.79; -0.65; optionable): P&C insurance
STATUS: Run to $100. Up on Tuesday, down today on a wild ride with above average volume (1.24 million). It is a bit too wild. We like the plays to settle and show the moves. Again, we will keep an eye on it for a move over 95.
Current plays Watchlist: These are plays that have hit the buy point and we are currently monitoring.
ESI (ITT Educational--$51.43; +0.78; optionable): Education and Training
STATUS: Successful test of breakout. Now it is looking better, bouncing up off the 18 day MVA, today on rising, average volume (139,200). On a move over 52 on above average volume we will look at some additional positions.
http://www.investmenthouse.com/cd/esi.html
GMP (Green Mountain Power--$19.19; +0.19; no options): Electric utility
STATUS: Cup with handle. Making the breakout work now! Leaping higher on very strong volume (for this stock; 21,900; avg. 6350). Now we are going to let it work for us.
http://www.investmenthouse.com/cd/gmp.html
MTEC (Meridian Medical--$40.05; +1.70): Has recovered slightly and able to stay above 37.50. The rise today was on very low volume, however (83,700). Not much power on the move. If it gets back to 42.50 but volume does not increase, we will have to exit.
QFAB (Quaker Fabric--$13.39; -0.38; no options): Textile maker
STATUS: Breakout test. Holding above the 18 day MVA and showing a tight doji on very strong above average volume (273K). It looks ready to move back up from here, but it needs to break 14 on continued strong volume.
http://www.investmenthouse.com/cd/qfab.html
Puts:
BRCD (Brocade--$24.62; -0.97; optionable): Telecom
STATUS: Put. Two solid sessions Monday and Tuesday followed by some higher volume selling today (16.4 million). The stock closed well off of its low on the bounce back, but still finished the session below the 50 day MVA (25.50). We are staying with the puts as the pattern of the descending wedge is still in tact as well as the fall from the down trendline.
http://www.investmenthouse.com/cd/brcd.html
CUM (Cummins--$41.56; -0.99; optionable): Big engines
STATUS: Put. After a weak bounce Tuesday CUM continued down today with volume increasing on the selling (812k). We are going to ride current positions toward the target of 39, though there is some potential support at 40.
http://www.investmenthouse.com/cd/cum.html
FDS (Factset Research--$34.19; -0.64; optionable): Information services
STATUS: Put. Continues down, today tapping near the 200 day MVA (32.43) at the low of 32.78, but it recovered on strong volume (257,700; avg. 139k). Ready to take profits on a strong bounce up from here.
http://www.investmenthouse.com/cd/fds.html
NAV (Navistar--$39.75; -0.15; optionable): Trucks
STATUS: Bounced with some strength Tuesday, but we will see if it continues after today's doji on stronger volume. The target is 37.75, but wary of an upward move even after the doji.
http://www.investmenthouse.com/cd/nav.html
WL (Wilmington Trust--$62.86; -0.28; optionable): Regional bank
STATUS: Put. Did not take a bounce with the market, and we are still riding current positions but looking to take profits if we get a move up.
BUY POINT: Riding current positions but ready to take profits. Target=200 day MVA at 62.50; 60 if that breaks.
SYMC (Symantec--$35.51; +0.10; optionable): Internet software
STATUS: Put. made the bounce with the market and triggered trailing stops.
http://www.investmenthouse.com/ct/symc.html
VARI (Varian--$34.71; +0.97; optionable): Scientific & Technical Instruments
STATUS: Head and shoulders. After tapping near the 31.50 target Friday and Monday, a big bounce from VARI chased us out of positions.
http://www.investmenthouse.com/ct/vari.html
Upside:
BYBI (Back Yard Burgers--$7.64; +0.22; no options): Restaurants
STATUS: Has tanked out of its handle, and dropping for now.
http://www.investmenthouse.com/cd/bybi.html
ULAB (Unilab--$30.41; +0.44; optionable): Healthcare software & services
STATUS: Double bottom. Has moved up recently on weak volume, continuing up the last two sessions (today up to 214,700; avg. 471k). Cautious and keeping stops at 28.
BUY POINT: Target: 35. Stop: 28
http://www.investmenthouse.com/ct/ulab.html
UPS (United Parcel Service--$59.85; -0.19; optionable): Delivery
STATUS: Holding the 50 day after the failed attempt to spring from the lateral consolidation.
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.
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