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Begin part 3 of 3
THE PLAYS:
New Plays:
Upside:
Play Date: 08/29/2009
CMG (Chipotle Mexican Grill--$85.06; 0.00; optionable): McDonald's spinoff
http://biz.yahoo.com/p/c/cmg.html
After Hours: $85.48
EARNINGS: 07/22/2009
STATUS: Breakout test. CMG made us a lot of money in 2008 and earlier this year as well. It is now setting up to makes us more again. CMG broke out from a 12 week ascending base in July and rallied to 96. Ran out of gas on that move and came back to test mid-August. Now it undercut the 50 day EMA (86.57), but it held some price support at 85, a level that also coincides with the 61% Fibonacci retracement level of the July to early August rally higher. It is making a double bottom at the 61% level, just what you want to see (versus just a single test; not as reliable). CMG flashed a pair of doji to end the week, falling below 85 intraday but rebounding to hold it by the close. Nice action and if CMG can put together an upside session and hold it into the last hour that is when we want to start buying some positions.
Volume: 202.95K Avg Volume: 538.811K
BUY POINT: $86.68 Volume=700K Target=$99.85 Stop=$82.92
POSITION: CMG AQ - Jan. $85c (56 delta, low OI) &/or Stock
http://www.investmenthouse.com/ci/cmg.html
Play Date: 08/29/2009
COP (ConocoPhillips--$45.70; -0.03; optionable): Major integrated oil and gas company
http://biz.yahoo.com/p/c/cop.html
After Hours: $45.70
EARNINGS: 07/29/2009
STATUS: Ascending triangle. This is COP's first base off the March low when it rallied up to early June. That was the peak and this base started, a well-formed 11 week pattern preparing for the breakout. COP gapped over the 200 day SMA (44.38) that has kept the pattern in check since late July on Monday, moving on strong volume. It has slipped laterally since, tapping the 200 day on each session low and bouncing back up. Really good upside volume Wednesday and Thursday and then gapped higher on Friday but finished flat on very low volume. Looking for COP to continue higher this week and give us the buy.
Volume: 6.649M Avg Volume: 13.735M
BUY POINT: $45.96 Volume=17M Target=$55.95 Stop=$43.89
POSITION: COP AI - Jan. $45c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/cop.html
Play Date: 08/29/2009
HRZ (Horizon Lines--$5.71; -0.18; optionable): Shipping
http://biz.yahoo.com/p/h/hrz.html
EARNINGS: 07/24/2009
STATUS: Flag. HRZ finally broke higher two weeks back, clearing a 14 week base formed after this shipper finally pulled out of port from the November to April trading range. Flat as a board into the breakout, and a very nice, high volume surge. It started the test this past week, coming back to tap the 10 day EMA (5.62) Thursday and Friday, holding that near support level. Nice test/flag setting HRZ up for a continued breakout run.
Volume: 332.195K Avg Volume: 458.109K
BUY POINT: $5.87 Volume=645K Target=$7.94 Stop=$5.48
POSITION: HRZ AA - Jan. $5c (71 delta) &/or Stock
http://www.investmenthouse.com/ct/hrz.html
Play Date: 08/29/2009
SCHN (Schnitzer Steel--$54.91; +1.10; optionable): Steel and iron
http://biz.yahoo.com/p/s/schn.html
After Hours: $54.66
EARNINGS: 06/30/2009
STATUS: Ascending base. Strong March to June run (what is new there, eh?), a selloff into early July, and then the work on the current 7 week base. The pullback to early July was to a key level at 45 where SCHN peaked in February and held on the May low. It has built this base off that level, surging nicely last week and then testing that move this week. Similar to many in the commodities area, SCHN tested near support and bounced back Thursday, setting it up for a new break higher. Set up nicely to make the break higher from this higher low.
Volume: 261.998K Avg Volume: 780.153K
BUY POINT: $55.17 Volume=875K Target=$64.95 Stop=$51.84
POSITION: SQQ AK - Jan. $55c (49 delta) or SQQ KJ - Nov. $50c (66 delta) &/or Stock
http://www.investmenthouse.com/ct/schn.html
Play Date: 08/29/2009
SGI (Silicon Graphics--$5.58; +0.09; optionable): PC hardware
http://biz.yahoo.com/p/s/sgi.html
After Hours: $5.57
EARNINGS: 08/06/2009
STATUS: Breakout test. SGI cleared its 10 week base on expiration Friday, then spent Tuesday to Friday testing the move, coming back to tap the 18 day EMA (5.40) on the Thursday and Friday lows and rebounding to close over the 10 day EMA (5.51). Indeed Friday SGI tested and recovered for a gain on rising volume. It is sitting right on top of the June peak at the start of the base, the perfect point to hold and rebound. As it continues higher that is when we step in.
Volume: 276.321K Avg Volume: 180.42K
BUY POINT: $5.66 Volume=295K Target=$7.48 Stop=$5.31
POSITION: SGI AA - Jan. $5c (69 delta) &/or Stock
http://www.investmenthouse.com/ct/sgi.html
Play Date: 08/29/2009
SOHU (Sohu.com--$62.46; -0.41; optionable): Chinese internet info.
http://biz.yahoo.com/p/s/sohu.html
After Hours: $62.70
EARNINGS: 07/27/2009
STATUS: Ascending triangle. SOHU is 'getting right' again, something it seems to do often, forming a base on base pattern. It carved out a big 9 month cup with handle base and broke out in late May, rallying on into early June, moving up to 69. Then it relapsed back into the current consolidation base, an 11 week jobber roughly using the 50 day EMA (62) on the lows to make higher lows and build that pressure from below that leads to the breakout move. SOHU right now is in fact testing the 50 day, tapping it on the Friday low on very low volume. Looking to pick up SOHU as it moves off this test in anticipation of the breakout. Gives us a better risk/reward position, and if it takes off with the breakout then we have a great entry point. If not we can close it with minimal wear and tear versus the upside potential on this play.
Volume: 261.667K Avg Volume: 1.014M
BUY POINT: $63.31 Volume=1.3M Target=$74.95 Stop=$59.77
POSITION: TKZ LL - Dec. $60c (61 delta) &/or Stock
http://www.investmenthouse.com/ci/sohu.html
Play Date: 08/29/2009
STE (Steris--$28.89; -0.16; optionable): Medical appliances
http://biz.yahoo.com/p/s/ste.html
After Hours: $28.90
EARNINGS: 07/30/2009
STATUS: Ascending triangle. Neat 5 week triangle has formed, making higher lows up the 18 day EMA (28.78), and coming back last week to test that level, holding it Wednesday through Friday on the lows. This consolidates the July run after STE broke out of a similar pattern formed from May to early July. Looking to pick up STE as it comes off of this test of the near support as that gives us a very good risk/reward positions.
Volume: 207.961K Avg Volume: 425.982K
BUY POINT: $29.24 Volume=625K Target=$33.91 Stop=$27.58
POSITION: STE LE - Dec. $25c (78 delta) &/or Stock
http://www.investmenthouse.com/ci/ste.html
Downside:
Play Date: 08/29/2009
NTAP (Network Appliance--$23.32; +0.28; optionable): PC Data storage
http://biz.yahoo.com/p/n/ntap.html
After Hours: $23.32
EARNINGS: 08/19/2009
STATUS: NTAP is still in its uptrend, but it is showing signs it is ready for a deeper test before continuing higher. Broke out in early July and rallied up to 23.50 and tested. Then it bounced to a new rally high in early August, but volume was very low, well below average. It then gapped lower on some big volume, not once but twice, finding the 50 day EMA (21.63). Then it bounced, moving off the 50 day on into this week and through Friday. Friday NTAP rallied up to just below the August high and then faded, giving up two-thirds of its session gains. That was a 78% retracement of the pullback from the peak of the run to the recent low. That is a common place for a rebound to fail, particularly when you see this price/volume action. Don't need a crash to make money here. A move to the target lands us a 61%ish gain.
Volume: 5.578M Avg Volume: 8.348M
BUY POINT: $23.14 Volume=9.5M Target=$21.11 Stop=$24.06
POSITION: NUL VJ - Oct. $24p (-55 delta)
http://www.investmenthouse.com/ci/ntap.html
Play Date: 08/29/2009
SPG (Simon Property Group--$64.77; +0.90; optionable): Retail real estate REIT
http://biz.yahoo.com/p/s/spg.html
After Hours: $64.88
EARNINGS: 08/04/2009
STATUS: This is very interesting because SPG can give us a nice downside run here as part of an upside setup. SPG could be forming an ABCD pattern to further its gains. A good surge from July to early August has tested back and bounced, putting SPG just below the March high, indeed at the 78% Fibonacci retracement. If the pattern holds SPG will turn back here and test toward the 50 day EMA (57.15) or a bit lower before it holds and forms point D ahead of its move higher. We can most definitely play that move from C to D as there is plenty of room. So, after gapping higher Friday we are looking for SPG to fall to start the week, indeed even gapping modestly lower for the best indication. We will move in at that point for a run to the target. A move to that level lands us a 55% gain.
Volume: 2.682M Avg Volume: 5.206M
BUY POINT: $64.44 Volume=5.5M Target=$59.21 Stop=$66.91
POSITION: SPG VM - Oct. $65p (-50 delta)
http://www.investmenthouse.com/ci/spg.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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