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Begin Part 2 of 2
New plays from Monday:
DKWD (D&K Healthcare--$33.91; -1.13; optionable): Wholesale drugs
http://biz.yahoo.com/p/d/dkwd.html
STATUS: Test of breakout. Bounced up Tuesday after another test of the 18 day MVA but after tapping near resistance Wednesday (35.95 on the intraday high) was back down, selling on heavy volume. It held the 18 day MVA, level tested on the lows the last 4 days, bouncing back up but closing just under the 10 day MVA (33.95). Not looking for an immediate strong try again for the highs; after this selling it will need some time. Volume high at 598,200 (avg. 162K).
BUY POINT: Can hold for buys at 34.65 as long as it holds the 18 day MVA. Target= 38. Stop=32.50.
POSITION: Stock and/or August $30c to buy (QLD HF; low OI, delta 0.75).
http://www.investmenthouse.com/ct/dkwd.html
PCLE (Pinnacle Systems--$9.50; +0.58; optionable): Photographic equipment
http://biz.yahoo.com/p/p/pcle.html
STATUS: Cup with handle. Dipped on rising volume Tuesday below support in the handle, the 18 day MVA (9.12), which didn't look good, but today the stock was back over that support, volume blowing up to 941,400 (avg. 367K). Now it is looking ready to make a breakout move over the recent highs (9.52 from April). We like the money flow that is ahead of price, along with relative strength, and this is a base that shows good accumulation as noted Monday.
BUY POINT: Aggressive: 9.75 on volume in the range of 375K or higher. Breakout: 10.27 on volume of 560K or higher. Target=13. Stop=9.40.
POSITION: Stock and/or October $7.50c to buy (PUC JU; delta 0.77, low OI).
http://www.investmenthouse.com/ct/pcle.html
New plays from the weekend report:
Upside:
HZO (Marinemax--$14.05; -0.25; no options): Boats
http://biz.yahoo.com/p/h/hzo.html
STATUS: Flags. HZO has been throwing flags, moving laterally for a few weeks and then shooting higher again. After three flags the stock looks like it is pulling back in another, catching support at the 18 day MVA (14.04) where it closed Wednesday, moving lower on rising volume (87,500; avg. 75K). Volume is still below average, so we'll continue to look for the stock to hold here for a bounce back up; after the three flags thrown already we are looking for one more (HZO tends to move about $3 each time). Looking for a run up to 17.40 range once it gets going, where we will take the gain.
BUY POINT: 14.50 on volume of 125K or higher. Target=17.40. Stop=13.75
POSITION: Stock.
http://www.investmenthouse.com/ct/hzo.html
KROL (Kroll, Inc.--$21.44; +0.74; optionable): Security and protection services
http://biz.yahoo.com/p/k/krol.html
STATUS: All-time high. Headed higher Wednesday on a slight rise in volume to 461,700 (avg. 201K), much lower volume than what the stock mustered on Monday's breakout move after testing the move out of its reverse head and shoulders pattern. It closed a cent below Tuesday's high, reached before it pulled back on lower volume. We are riding this one as long as volume continues to push it higher, but the stock may be ready for a bigger pullback (to the 19.80 range) if it cannot pull in higher volume. Money flow still moving up with the stock.
BUY POINT: A hold for buys at 20.20. Target=24. Stop=18.75.
POSITION: September 15c to buy (KRQ IC; delta 83). We can use stock as well.
http://www.investmenthouse.com/ct/krol.html
LTR (Loews Corp.--$60.06; +0.26; optionable): Property & Casualty Insurance
http://biz.yahoo.com/p/l/ltr.html
STATUS: Flat base. After moving up to the previous highs in the base by Friday, LTR commenced a pullback and by Tuesday had tested the 50 day MVA (59.40). Low volume continues to hold it down and the stock ended up trading Wednesday with a close just under the 18 day MVA (60.11). It is still a decent pattern so we will look for a move back over that resistance after further consolidation; we were expecting such action after Monday's pullback. Good accumulation; volume was down to 330,200 (avg. 515,400).
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/ct/ltr.html
Downside:
GCI (Gannett--$74.58; +3.08; optionable): Newspapers
http://biz.yahoo.com/p/g/gci.html
STATUS: Put. Kiss goodbye. Target for the play is at 69; the lowest the stock got on the first move down from its 50 day MVA was Tuesday's low at 71.12. On lighter volume GCI popped back up in the rally today but closed below the converged 18 and 50 day MVAs (just below 75), but it did move just over its short term down trendline. However, resistance could be even sturdier here. Volume was down to 929,300 (avg. 1.06 million).
BUY POINT: A hold for buys at 73.62, looking for rising volume on a fall back down. New buy point: Below 74 on stronger, above average volume. Target=69. Stop=75.50.
POSITION: July 80p to buy (GCI SP; delta -71; low OI).
http://www.investmenthouse.com/ct/gci.html
GNTA (Genta--$12.11; +0.56; optionable): Biotechnology
http://biz.yahoo.com/p/g/gnta.html
STATUS: Put after 200 day MVA breach. Tanked Monday though volume was light that day; the last 2 days GNTA bounced back up, Wednesday reaching resistance at the 10 day MVA (tested on the high of 12.45; the MVA is at 12.31). Volume was higher on the gap up (1.3 million; avg. 1.4 million), but the close with the doji suggests GNTA can move back down here since it could not hold the move over the 10 day. A hold for now.
BUY POINT: A hold for put buys at 11.75, looking for rising volume on a move back down. Target=9 (initial), then 8. Stop=13.25.
POSITION: June 15 puts to buy (GJU RW; delta -73).
http://www.investmenthouse.com/ct/gnta.html
BRCD (Brocade--$25.05; +5.15; optionable): Communication equipment
http://biz.yahoo.com/p/b/brcd.html
STATUS: Descending wedge (formerly). Blasted up through the stop loss point at 23 in the rally today, high volume pushing the stock (29.4 million; avg. 16.4 million) up through the 18 day MVA (23.89). However, BRCD closed under the 50 day MVA (25.71) after tapping the resistance on the high and pulling back down slightly. The 50 day has pushed BRCD back down since mid-February, so we are looking for it to fall back here again, despite the higher volume today. We won't look for new entry points for downside positions at this point.
BUY POINT: A hold for buys at 21.50. Target=15. Stop=23
POSITION: July 32puts to buy (UBF SZ; delta -71; low OI)
http://www.investmenthouse.com/cd/brcd.html
UVN (Univision--$42.07; +1.61; optionable): Broadcast TV
http://biz.yahoo.com/p/u/uvn.html
STATUS: Kiss goodbye (formerly). UVN is one stock that made it back over resistance in the rally (the 50 day MVA at 41.52), but it has not made it over the short term down trendline at 42.70. If the stock does break that resistance, time to exit positions. Volume strong at 1.9 million (avg. 1 million).
BUY POINT: A hold for positions, if taken, at 39.85. Target=35.50. Stop=42.80
http://www.investmenthouse.com/ct/uvn.html
POSS (Possis Medical--$14.72; +0.72; optionable): Medical appliances
http://biz.yahoo.com/p/p/poss.html
STATUS: Breakdown below 200 day MVA. Continued to fall through Monday after kissing the 200 day MVA (up at 15.68) several days ago, then bounced back up the last 2 days, though the low and decreasing volumes indicates a likely retreat from the 10 day MVA (14.92), just ahead. Volume was a low 58,600 (avg. 160K), and the stock isn't likely to continue higher if that trend continues.
BUY POINT: Hold for put buys at 13.85, looking for rising volume on a renewed fall back (150K or more). Target=10. Stop=16.
POSITION: July 20p to buy (UPQ SD; delta -80; low OI).
http://www.investmenthouse.com/ct/poss.html
CONTINUING PLAYS
Puts
ARW (Arrow Electronics--$26.06; +1.42; optionable): Wholesale electronics
http://biz.yahoo.com/p/a/arw.html
STATUS: Put on kiss good-bye. Slowed down the retreat with a Tuesday doji, then with the rally was back up to the 18 day MVA on strong volume (913,200; avg. 537K). Good price/volume action, but the stock will have to break the resistance, and then it has the 200 day MVA at 26.80, below the stop loss advisory point. May run out of steam before it gets there.
BUY POINT: A hold for buys at 25.55 and 25.25. Target=22 (initial), then 20. Stop=27.50.
POSITION: June 30p to buy (ARW RF; delta -0.81).
http://www.investmenthouse.com/ct/arw.html
ETM (Entercom Communications--$56.87; +3.00; optionable): Radio broadcasting
http://biz.yahoo.com/p/e/etm.html
STATUS: Put. Moved back over the 50 day and short term MVAs in the rally, though volume was lower and below average on the move (281,900; avg. 342K). The stock is still below the short term down trendline (58.50) but we won't hang around for it to go that far. On the low volume it will likely pull back to the 55 range, and we will take that opportunity to close out positions if it holds support. If not, a hold for current positions on another breach of support.
BUY POINT: A hold for buys at 52.50. Target=46.50. Stop=57.50.
POSITION: June 60p to buy (ETM RL; delta -75; low OI).
http://www.investmenthouse.com/ct/etm.html
GWW (W.W. Grainger--$54.60; +0.60; optionable): Wholesale Electronics
http://biz.yahoo.com/p/g/gww.html
STATUS: Put: Breach of 50 day MVA. Did not participate in the rally in any dramatic way, making a small gain on lower, below average volume and closing below resistance, the 18 day MVA (55) and the 50 day MVA is at 55.23). Will look for it to fall back down. Volume 411,100 (avg. 418,363).
BUY POINT: A hold for put buys at 53.70. Target=50 (initial); then 48. Stop=55.75.
POSITION: July 60p to buy (GWW SL; low OI, Delta -74)
http://www.investmenthouse.com/ct/gww.html
Upside Plays:
GTRC (Guitar Centre--$20.20; +0.11; no options): Guitars
http://biz.yahoo.com/p/g/gtrc.html
STATUS: Test breakout. Made a nice bounce Monday from the 18 day MVA and has made it past the April high resistance (19.99) though the move hasn't had much punch behind it. Volume was higher Wednesday on the small gain (a doji at the close) but still below average at 161,800 (avg. 167K). Can pick up some strength on continued rising volume; support on a pullback possible at the 10 day MVA (19.42). Money flow continues to move higher.
BUY POINT: Aggressive: A hold for buys at 19.65 and 20.09. Target=24. Stop=18.50
POSITION: Stock
http://www.investmenthouse.com/ct/gtrc.html
LPNT (Lifepoint Hospitals--$40.89; +0.67; optionable): Health care plans
http://biz.yahoo.com/p/l/lpnt.html
STATUS: Cup w/handle. Used the rally into techs to settle out more in the handle to its 9-month base. Volume dropped back to 389,000 (avg. 404K) and the stock held the 18 day MVA (40.35) for a slight bounce. Continue to look for a breakout, with LPNT further developing this handle; after Tuesday's bit of selling it may need a few more days.
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/ct/lpnt.html
JILL (J. Jill Group--$32.19; -0.97; optionable): Catalog retail
http://biz.yahoo.com/p/j/jill.html
STATUS: Flat base post breakout of cup w/handle. Volume remained low up until Wednesday, when it shot above average (369,200; avg. 249K) and JILL moved to a high at 34.40, clearing the base. However, it couldn't hold and sold back down to the 18 day MVA (31.58). Not the best action, but we will see if the stock can hold support and settle back down. It has seen some volatility earlier in the base (late March) and continues to post higher lows. We are looking for a $4-5 move on a breakout.
BUY POINT: Aggressive: A hold for buys, if taken, at 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.--$26.63; +0.05; optionable): Regional southeast bank
http://biz.yahoo.com/p/s/sotr.html
STATUS: Cup w/handle. Still moving in the handle of an 8-month cup with handle/ascending wedge and closed right on support, the 18 day MVA. Volume was higher at 1.13 million (avg. 249K) on the recovery back over that support after Tuesday's lower closing price. Lows continue to test support at 26.50, and we like the hold above the short term up trendline that is just under the 18 day. The only troubling matter is the attempt to move down on the rising volume. We will see.
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--$24.37; +1.90; optionable): Personal computers
STATUS: Put. Moved back over resistance at the 50 day MVA (23.97) on strong volume of 7.9 million (avg. 5.1 million), still below our suggested stop advisory at 24.50. Tuesday the stock closed at its up trendline (connecting the December and January lows) and bounced from there. The move had some strength behind it, so we will be ready to exit if the strength continues. Double topped February and March, but is trying to keep that higher closing low trend going.
BUY POINT: A hold for put buys at 23.25. Target=20. Stop=24.50.
POSITION: July 27.50p to buy (AAQ SA).
http://www.investmenthouse.com/ct/aapl.html
TROW (T. Rowe Price--$36.32; +1.78; optionable): Asset Management
STATUS: Put. Fell back below the 200 day MVA Monday but on rising volume crossed back over that resistance and the 18 day MVA in today's rally. Volume was higher at 743,800 (avg. 578,400). The 50 day MVA is ahead at 37.05; we are letting it run and if the move runs out of steam, will assess the odds for a renewed retreat, if only for a better exit point on current positions. Financials enjoyed the day; a move over the 50 day and we are out.
BUY POINT: A hold for put buys at 34.40, looking for continued rising volume (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--$35.00; -0.25; optionable): Children's apparel
STATUS: Ascending wedge. Still looks good, showing a doji Monday at the 18 day MVA (34.95). Volume is still below average but was slightly higher at 189,200 (avg. 256K). Looking for a bounce back and breakout.
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--$34.22; +1.37; no options): Long-term care
STATUS: Test Breakout. Still testing the breakout on very low volume (down to 44,400; avg. is 135K). Gapped down and recovered, holding over the 18 day MVA (32.84). 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--$16.90; -0.25; 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 (16.47). This is part of a larger 20-month cup base where this flat base is serving as the handle. Today it gapped up but pulled all the way back to test near the 50 day MVA (low today 16.40), recovering to close. Buying and money flow are excellent, and relative strength is already breaking out on this move. Needs to settle down and continue the move started last week.
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--$31.43; -0.29; 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. Monday IRM pulled back on higher volume, holding the 10 day MVA.
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--$35.71; +1.36; optionable): Surety and title insurance
STATUS: Cup w/handle turned reverse head and shoulders. Strong move today, hitting the buy point on increased volume (432k; avg. 340k).
BUY POINT: Still a buy up to 36.50 but we need 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; the 35's have a delta of 61, 131 OI).
CMH (Clayton Homes--$17.25; -0.26; optionable): Manufactured housing (mobile homes)
STATUS: Reverse head and shoulders. An immediate pullback off of the strong move on Friday. Not the best action, but volume was down a bit (594k) and it pulled up to close after tapping the 10 day. We will see if it can hold and try again.
BUY POINT: Target=21.25. Stop=16.40.
http://www.investmenthouse.com/cd/cmh.html
PDQ (Prime Hospitality--$13.24; -0.42): Tried to move again today but volume was not there, and it pulled back from a high of 13.98 to close on the 10 day MVA.
Current plays Watchlist: These are plays that have hit the buy point and we are currently monitoring.
Puts:
INTC (Intel--$25.78; -0.78; optionable): Semiconductors
STATUS: Put. After the hard fall Friday INTC continued down today, although volume fell back below the average (44.3m; avg. 45.4m). Looking for a continued push down toward the target.
BUY POINT: Riding current positions. Target=24. Pulling stops down to 29.
CUM (Cummins--$40.10; -1.71; optionable): Big engines
STATUS: Put. Finally made the drop, taking out recent support at 41. Volume was lighter at 606k, so we could get a bounce. Still targeting 39.
FDS (Factset Research--$30.15; -1.85; optionable): Information services
STATUS: Put. Hit our target Friday and we took profits, but it fell really hard today as well, hitting 30 as we thought it might. With any remaining positions we can continue to follow it down, protecting profits. We could get a relief bounce and an attempt to test the 200 day here.
NAV (Navistar--$38.34; -0.55; optionable): Trucks
STATUS: Continued down on light volume, near recent lows. If it hits 37 we will close.
WL (Wilmington Trust--$63.64; -0.26; optionable): Regional bank
STATUS: Put. Encountering resistance at the 10 day MVA, pulling back from a high of 64.42 and falling back on continued above average volume (96,600). Looking for a stronger drop back the 200 day MVA (62.55), the initial target (60 if that breaks). Will close out if its turns back up.
Upside:
CAND (Candies, Inc.--$4.15; +0.41; no options): Footwear
STATUS: Cup w/handle. Nice move on the test of the breakout! Volume was huge at 12.1m (avg. 155k).
BUY POINT: Target=4.95. Stop=3.50.
GISX (Global Imaging--$20.39; +0.02; no options): Specialty retail
STATUS: Double bottom. Holding up after its recent surge, but volume has been weak so we are skeptical, though volume was moving up close to average levels Monday. 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 20.75 on volume of 350K+. Target=24.50. Stop=18.22.
POSITION: Stock.
ESI (ITT Educational--$51.56; -0.93; optionable): Education and Training
STATUS: Doing fine after the successful test of the breakout. ESO dipped back today but on much lighter volume, and is holding the 10 day MVA.
GMP (Green Mountain Power--$19.20; -0.25; no options): Electric utility
STATUS: Cup with handle. Dropped back today on sharply lower volume, tapping through the 10 day MVA (19.04) but recovering a bit to close. Looking for a hold of the 10 day (18 day at 18.84), wanting lighter volume on an additional pullback.
ULAB (Unilab--$30.65; -0.04; optionable): Healthcare software & services
STATUS: Double bottom. Continues to rise on very low volume, and that makes us doubt the move. Showed a doji today. Have pulled stop points even higher to 29.
BUY POINT: Target: 35. Stop: 29
UPS (United Parcel Service--$59.58; -0.52; optionable): Delivery
STATUS: Closed below the 50 day MVA today, but volume continued to be low (768k; avg. 1.5m). Looking for the stock to hold the 50 day and give a bounce, but we are not riding on a continued drop.
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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