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Begin Part 2 of 2
TEAM TRADES
NTBK: A play that was downside became upside as it turned back up from its breach of the 50 day MVA and vaulted on higher volume. Friday we were waiting until later in the session to determine if volume was going to be solid and the moves were going to hold. NTBK looked solid with very strong volume once again. We decided to enter positions as it cleared the recent March highs on that strong volume. We saw the stock trade in a range from 17.90 to 18 for several hours after the early morning surge. It sold back in the last hour, but made an immediate rebound to 18. It pulled back again on lighter volume to 17.83 and held. When it started back up we were ready to enter positions. We issued the alert. The stock was trading 17.92 by 17.94. Optionable, but Friday we were picking this one up for longer term. With the narrow spread we dropped in a limit order at the ask. It did not take long to fill. The stock moved back up to 18, but again it ran into a wall of resistance. In the last 10 minutes it turned and sold down on some heavier volume to close at 17.86; late session selling put us a bit underwater, but that is no problem. We look for it to hold above 17 on some rest and then kick off the move higher once again.
THE PLAYS:
Best Plays:
1) SOTR: Ready for the breakout.
2) LTR: Another one ready to move higher.
3) KROL: Looks like a new high coming.
4) HZO: Starting the bounce on huge volume.
5) GCI: Kiss goodbye
6) BRCD: Descending wedge.
7) GNTA: Biotech falling.
8) ARW: Falling harder now.
9) ETM: Now it is ready to drop.
10) GWW: Ready to fall as well.
11) Watchlist: CMH, BRO, GMP, SCS, WL
NEW PLAYS:
Upside:
HZO (Marinemax--$14.45; +0.43; no options): Boats
http://biz.yahoo.com/p/h/hzo.html
STATUS: Flags. Summer is almost here and HZO has been stepping up since early in the year. It is a flag thrower, i.e., it shoots up, moves laterally for a few weeks, then shoots back up. It has thrown three flags, and is looking as if it wants to throw one more. We want to get in on this action as it tends to move about $3 per leg up. No options, but it can give us a good percentage gain given the size of its runs. Friday, after four very tight doji's on the 18 day MVA (13.98) it started up on a volume surge (130,400; avg. is 60K). We want to pick it off here and let it run up to 17.40 or so and take the gain.
BUY POINT: 17.50 on volume of 125K or more. Target=17.40. Stop=13.75.
POSITION: Stock.
http://www.investmenthouse.com/cd/hzo.html
KROL (Kroll, Inc.--$19.74; +0.86; optionable): Security and protection services
http://biz.yahoo.com/p/k/krol.html
STATUS: All-time high. KROL recently broke out of a reverse head and shoulders pattern, ran to 20, and then took a quick breather Thursday on very low volume. Friday it surged back up close to 20 on once again massive volume (874K; avg. is 195K). Money flow is very strong as is buying. We are looking for the break over 20 to give us a strong, fast move to 24.
BUY POINT: 20.20 on volume of 500K or more. Target=24. Stop=18.75.
POSITION: September 15c to buy (KRQ IC; delta 83). We can use stock as well.
http://www.investmenthouse.com/cd/krol.html
LTR (Loews Corp.--$61.81; +0.76; optionable): Property & Casualty Insurance
http://biz.yahoo.com/p/l/ltr.html
STATUS: Flat base. Insurance is hot, and LTR is ready to breakout of a 13-week flat base ranging from 57 to 62. The past four sessions its has rallied from the 50 day MVA (59.25) and Friday it surged toward a breakout on a sharp increase in volume (793K; avg. is 550K). Relative strength is already breaking out on the move. Weeks of accumulation handily outpace distribution weeks in the pattern at 4 to 1. That is very good price/volume action. LTR looks ready to make the break for us.
BUY POINT: 62.38 on volume of 660K or more. Target=71. Stop=60.
POSITION: We can use stock, but we are looking primarily at September 55c to buy (LTR IK; delta 80; low OI).
http://www.investmenthouse.com/cd/ltr.html
Downside:
GCI (Gannett--$74.13; -0.73; optionable): Newspapers
http://biz.yahoo.com/p/g/gci.html
STATUS: Put. Kiss goodbye. After a prosperous run, GCI is in trouble. It formed a head and shoulders in late March to April and then broke below the 50 day MVA Monday. It rallied back Wednesday and Thursday only to meet resistance at that point Friday and sell back on slightly rising volume (887K; avg. is 1.05 million). This looks just like the breach, the struggle back up, and then the kiss goodbye. We want to blow it a kiss on the way down as well.
BUY POINT: 73.62 on volume of 1 million or better. Target=69. Stop=75.50.
POSITION: July 80p to buy (GCI SP; delta -71; low OI).
http://www.investmenthouse.com/cd/gci.html
GNTA (Genta--$12.10; -0.24; optionable): Biotechnology
http://biz.yahoo.com/p/g/gnta.html
STATUS: Breach 200 day MVA. The sector says it all as GNTA has suffered with its peers. It sold down to the 200 day MVA (13.10) in early April, but did not give it up. It breached it in some wild action late in the month, rallied back above it, and then fell Thursday. Friday it tested the 200 day on the open and then fell on much higher volume (2.5 million; avg. is 1.4 million). Six sessions back the stock plummeted to 9.39 intraday. In other words, it has the ability to fall fast. We are looking to catch that fast move and leverage our way in with options.
BUY POINT: 11.75 on volume of 200K or more. Target=9 (initial), then 8. Stop=13.25.
POSITION: June 15 puts to buy (GJU RW; delta -73).
http://www.investmenthouse.com/cd/gnta.html
BRCD (Brocade--$22.38; -1.07; optionable): Communication equipment
http://biz.yahoo.com/p/b/brcd.html
STATUS: Descending wedge. Double topped in December and January and broke below the 200 day MVA in February. Since then it has formed a descending wedge with decreasing highs and lows at 21.60. Friday it made a big step toward the breakdown, falling to 21.75 on rising, above average volume (18.7 million; average is 16.4 million). A big tech ready to break down some more.
BUY POINT: 21.50 on volume of 20 million. Target=15. Stop=23
POSITION: July 32puts to buy (UBF SZ; delta -71; low OI)
http://www.investmenthouse.com/cd/brcd.html
UVN (Univision--$40.20; -0.49; optionable): Broadcast TV
http://biz.yahoo.com/p/u/uvn.html
STATUS: Kiss goodbye. Breached the 50 day MVA (41.85) Monday, then crawled back up to test the level Wednesday and Thursday, but then turned back down Friday. Volume was not heavy Friday, something we did not necessarily like, but on further selling we should see it rise (621K; avg. is 1.11 million). We want to see UVN break below 40 on volume of 1 million or better.
BUY POINT: 39.85 on volume of 1 million or more. Target=35.50. Stop=42.
POSITION: June 45p to buy (UVN RI; delta -71; low OI)
http://www.investmenthouse.com/cd/uvn.html
POSS (Possis Medical--$13.97; -0.72; optionable): Medical appliances
http://biz.yahoo.com/p/p/poss.html
STATUS: Breakdown below 200 day MVA. In a strong sector, but POSS has tanked below the 200 day MVA, kissed it, and is now falling again. There is heavy selling ongoing and money flow is in a nose dive. We want to see more volume on the selling, but it is not bad (168K; avg. is 160K).
BUY POINT: 13.85 on volume of 185K or more. Target=10. Stop=16.
POSITION: July 20p to buy (UPQ SD; delta -80; low OI).
http://www.investmenthouse.com/cd/poss.html
CONTINUING PLAYS
Puts
OEX (S&P 100 530.52; -7.01; optionable): S&P 100
STATUS: Put. As expected the OEX fell from Thursday's doji below the down trendline, tumbling toward the target of 525 on lower volume (1.28 million, a hair below average). Whiel our initial target is 525, the OEX could slice through that on the way to the down channel at 515. We can add to positions on further selling from here and at a break below 525 on rising volume.
BUY POINT: Aggressive: Add to below 520. Break below 525: Additional positions. Target=525 initially. Then 515. Stop=533
POSITION: May 535p (OEB QG) or June 535p (OEB RG) to buy.
http://www.investmenthouse.com/cd/$oex.html
ARW (Arrow Electronics--$25.41; -0.36; optionable): Wholesale electronics
http://biz.yahoo.com/p/a/arw.html
STATUS: Put. After moving up following the initial downdraft ARW tapped the 200 day MVA (26.85) on Thursday's high and then rolled over. Friday it sold off harder on much stronger, above average volume (752K; avg. is 564K). A real kiss goodbye. It is still within the buy range for new positions and we are looking at adding on further selling this week.
BUY POINT: New or additional positions on a drop through 25.25 on volume of 700K or better. Target=22 (initial), then 20. Stop=27.50.
POSITION: June 30p to buy (ARW RF).
http://www.investmenthouse.com/cd/arw.html
ETM (Entercom Communications--$52.92; -1.00; optionable): Radio broadcasting
http://biz.yahoo.com/p/e/etm.html
STATUS: Put. ETM could not hold the 50 day MVA, reversing off the high Thursday and then tanking back below the 50 day Friday on surging, above average volume (473K; avg. is 332K). After the double tops in March and April, this is the exact move we are looking for as the volume on Friday's selling was the strongest yet. Excellent, and we are ready to try again on this one.
BUY POINT: Below 52.50 on volume of 450K, preferably more. Target=46.50. Stop=54.50.
POSITION: June 60p to buy (ETM RL; delta -75; low OI).
http://www.investmenthouse.com/cd/etm.html
GWW (W.W. Grainger--$53.90; -1.07; optionable): Wholesale Electronics
http://biz.yahoo.com/p/g/gww.html
STATUS: Put: Breach of 50 day MVA. It too tried to move over the 50 day, not wanting to kiss but move right back in. Higher prices had nothing to do with it, however, and the stock turned and plunged Friday on rising, above average volume (499K; avg. is 439K). It just cleared our buy point, and it is ripe for new positions. This one could tank now.
BUY POINT: 53.70 on volume of 500K or better. Target=50 (initial); then 48. Stop=55.75.
POSITION: July 60p to buy (GWW SL; low OI, Delta -74)
http://www.investmenthouse.com/cd/gww.html
Upside Plays:
GTRC (Guitar Centre--$19.00; -0.55; no options): Guitars
http://biz.yahoo.com/p/g/gtrc.html
STATUS: Test breakout. Still pulling back after the breakout of its cup base in late April on massive volume. Friday continued the pullback on very light volume (97K; avg. is 185K). On the low it again held the 10 day MVA (18.95). Money flow remains strong and price/volume action was good in the 10-month base. We are looking for a nice, quick move up to 24.
BUY POINT: Aggressive: 19.65 on continued above average volume. Break resistance: 20.09 on 275K+. Target=24. Stop=18.50
POSITION: Stock
LPNT (Lifepoint Hospitals--$40.67; -0.66; optionable): Health care plans
http://biz.yahoo.com/p/l/lpnt.html
STATUS: Cup w/handle. Tuesday LPNT made an attempt at breaking out of its 8-month cup with handle base. Volume was solid, but not what we wanted on the breakout move. The stock pulled back the rest of the week, tapping at the 18 day MVA (40.20) on Friday's low as volume continued below average (353K; avg. is 450K). Its sector is a bit wobbly right now, taking a breather after a strong run. That is why we are going to give LPNT another shot at the breakout.
BUY POINT: 42.50 on volume 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
JILL (J. Jill Group--$31.65; -0.38; optionable): Catalog retail
http://biz.yahoo.com/p/j/jill.html
STATUS: Flat base post breakout of cup w/handle. After trying to break higher Wednesday on stronger volume, the stock pulled back Thursday and Friday on very low volume (140,200; avg. is 256K). Buying has been very good and money flow is very strong. We like the later move after the breakout with good price/volume action. As noted before, JILL tends to jump $4 to $5 on each bounce. Price/volume action shows strong accumulation over distribution weeks (17 to 8 in the base).
BUY POINT: Aggressive: 32 on above average volume. Breakout 33.70 on 350K or more. Target=36. Stop=29.95.
POSITION: September 25c to buy (JUI IE; delta 89; 65 OI).
http://www.investmenthouse.com/cd/jill.html
SOTR (Southtrust Corp.--$26.99; +0.05; optionable): Regional southeast bank
http://biz.yahoo.com/p/s/sotr.html
STATUS: Cup w/handle. Still moving in the handle of a 8-month cup with handle/ascending wedge and looking solid. The stock broke out in mid-March and rallied to 27 where it failed to take out the former high. After that it fell to the 50 day MVA and has moved up that support, forming the ascending wedge. As we said before, we really, really like this combination pattern. Thursday and Friday SOTR spent time at the breakout point on above average volume (1.5 million; avg. is 1.25 million). It may pull back toward 26.50 before it makes its move, but we think it is close to making the breakout. Money flow continues moving up ahead of price, and relative strength has already broken out. Price/volume action in the base favors accumulation with 7 rising weeks on rising volume versus 5 falling weeks on rising volume.
BUY POINT: 27.42 on volume of 1.87 million or more. Target=32.96 (initial). Stop=25.50.
POSITION: Stock and/or September 25c to buy (SHQ IE; delta 91).
http://www.investmenthouse.com/cd/sotr.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.
Puts:
AAPL (Apple Computer--$23.51; -0.18; optionable): Personal computers
STATUS: Put. Not dead yet, fighting to hang onto the 50 day MVA (24.05) but showing two doji's below that level Thursday and Friday. Volume was still below average, showing the stock did not have a lot of push when it tried to clear those levels (4 million; avg. is 5.54 million). Need to see more volume come in. 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
TROW (T. Rowe Price--$35.40; -0.12; optionable): Asset Management
STATUS: Put. Still back over the 200 day MVA, but on no volume and running out of steam. Looks ready to take the tumble back down. Volume 470K, avg. is 625K. It is still below the neckline of the head and shoulders pattern (36), and that is what is causing it to stumble.
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
Upside Plays:
PLCE (Children's Place--$35.25; -0.41; optionable): Children's apparel
STATUS: Ascending wedge. Fell again Friday but on very low volume (182K; avg. is 256K) as it shrank from the breakout again. Buying still very strong.
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).
ODSY (Odyssey Healthcare--$32.85; -0.75; no options): Long-term care
STATUS: Test Breakout. Still testing the breakout on very low volume (56,900; avg. is 135K). 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).
SCS (Steelcase--$17.15; +0.19; optionable): Business equipment
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. Taking a rest after the high volume move Wednesday. Still looks good.
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).
IRM (Iron Mountain--$31.72; -0.15; optionable): Management services (storage).
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. Friday IRM pulled back on very low volume after testing the breakout point. Resting before the move.
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).
BRO (Brown & Brown--$34.35; +0.47; optionable): Surety and title insurance
STATUS: Cup w/handle turned reverse head and shoulders. Inching closer to the breakout on rising volume (277K; avg. is 340K).
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).
CMH (Clayton Homes--$17.51; +0.47; optionable): Manufactured housing (mobile homes)
STATUS: Reverse head and shoulders. Strong move Friday on strong volume off the doji's (781K; avg. 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
PDQ (Prime Hospitality--$13.66; +0.01): Trying to make the breakout move from the handle in its long base. A doji Friday on low volume as it stalled at the breakout (100K).
Current plays Watchlist: These are plays that have hit the buy point and we are currently monitoring.
Puts:
INTC (Intel--$26.56; -1.31; optionable): Semiconductors
STATUS: Put. Took awhile, but started back down Thursday and really started tanking Friday on above average volume (50.9 million). INTC should give us the push down early this week to the target.
BUY POINT: Riding current positions. Target=24. Stop=31.
CUM (Cummins--$41.81; -0.29; optionable): Big engines
STATUS: Put. CUM just won't cave in, refusing to fall below 41. If it starts to bounce here we are going to take our money off the table. Target is 39, though there is some potential support at 40.
FDS (Factset Research--$32.00; -1.54; optionable): Information services
STATUS: Put. Hit our target Friday and we took profits. It may fall further however, toward 30 as it undercut the 200 day MVA.
NAV (Navistar--$38.89; -0.71; optionable): Trucks
STATUS: Could not hold the bounce and falling, but volume light. If it hits 37 we will close.
WL (Wilmington Trust--$63.90; +0.62; optionable): Regional bank
STATUS: Put. Bounced Friday on lower volume; if we get any weakness we will close out the position. Target=200 day MVA at 62.50; 60 if that breaks.
Upside:
CAND (Candies, Inc.--$3.74; -0.06; no options): Footwear
STATUS: Cup w/handle. The doji Thursday led to a bit more selling Friday, but volume spiked up, something we don't like to see (526K; avg. is 110K). Looking for 3.60 to hold on a pullback.
BUY POINT: Target=4.95. Stop=3.35.
GISX (Global Imaging--$20.37; +0.45; no options): Specialty retail
STATUS: Double bottom. Moving higher still but volume has not been impressive, falling Friday and still below average (145K; avg. is 245K). It is having a hard time clearing the middle of the pattern at 20.43. Without more volume it won't do it. Price/volume action shows accumulation weeks leading 5 to 1, a very nice ratio.
BUY POINT: New positions over 20.50 on volume of 350K+. Target=24.50. Stop=18.22.
POSITION: Stock.
ESI (ITT Educational--$52.49; +0.28; optionable): Education and Training
STATUS: Successful test of breakout. Still rising and volume has improved.
GMP (Green Mountain Power--$19.45; +0.18; no options): Electric utility
STATUS: Cup with handle. Still another solid move on the strongest volume yet (26,600; avg. 6350). Making the breakout work well.
ULAB (Unilab--$30.69; +0.17; optionable): Healthcare software & services
STATUS: Double bottom. Rising on very low volume, and that makes us doubt the move. Sliding stop points even higher to 29.
BUY POINT: Target: 35. Stop: 29
UPS (United Parcel Service--$60.10; +0.17; optionable): Delivery
STATUS: Hovering over the 50 day MVA on below average volume (1.1 million). Not nearly the move we wanted, but trucking is doing well and we will see if UPS can catch fire. We will not let it go below the 50 day MVA.
BUY POINT: Target: 66.44 represents a former high and is the initial target. Stop Advisory: 59
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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