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stock watch, stock recommendation
Begin Part 3 of 3
BZH (Beazer Homes--$83.18; -4.82; optionable): Residential construction
http://biz.yahoo.com/p/b/bzh.html
STATUS: Put, kiss good-bye. Homebuilders look like they are starting to break down. BZH was trying to form a cup with handle but accumulation in the small base wasn't good, and the stock Friday sold back through its 50 day MVA (83.86). Though volume was lower at 456K (below the average of 524K), we don't like the break of major support in a sector that is showing signs of wear. There is an up trendline at 78; a drop to that price is a decent move, but BZH can make it to 75 if that support doesn't hold. We will look for a test of the 50 day MVA, then the kiss good-bye.
BUY POINT: Aggressive: 82.95 on volume of 550K or higher. Target=78 (initial). Stop=84.50
POSITION: June 90p to buy (BZH RR; delta= -0.74, 53 OI).
http://www.investmenthouse.com/ct/bzh.html
VMC (Vulcan Materials--$46.43; -0.14; optionable): Building materials
http://biz.yahoo.com/p/v/vmc.html
STATUS: Put. As the homebuilders break down, so can the suppliers. VMC is in the right shoulder of a head and shoulders pattern that has a neckline at 46. Volume has been low in recent days, slightly up Friday at 140,600 (avg. 185K) with the stock showing a doji tucked just under its 200 day MVA (46.61). We are looking for a failure to move back over that level and a breakdown below 46; there is an up trendline connecting January, February and March lows that was tapped on Friday's intraday low at 46.35. The pattern peaked in April near 50.
BUY POINT: 45.90 on volume in the range of 250K or higher. Target=41.50. Stop=47.50
POSITION: June 55p to buy (VMC RK; delta= -0.91).
http://www.investmenthouse.com/ct/vmc.html
CTX (Centex--$52.93; -2.57; optionable): Residential construction
http://biz.yahoo.com/p/c/ctx.html
STATUS: Put. CTX has experienced strength with its sector since September, breaking from a reverse head & shoulders and rising 35%. However, the sector could be weakening, and CTX is definitely showing signs of a drop. It was in an eight-week cup with handle, but Friday it could no longer hold the 50 day MVA (55.04), dropping through that level on increased volume of 1.29m (avg. 1.18m). We could see a test of that broken support, but our favorite point to enter puts is on a drop back from such a test. The initial target is the 200 day MVA, with April lows at 49.
BUY POINT: After a test of the 55 level, a drop back through 53.50 on increased volume. Target=49 (initial). Stop=56.50
POSITION: July $60 puts to buy (CTX SL).
http://www.investmenthouse.com/ct/ctx.html
ACF (Americredit--$36.69; -2.40; optionable): Credit services
http://biz.yahoo.com/p/a/acf.html
STATUS: Put. Another head and shoulders - certainly a common pattern in this market. ACF broke its 50 day MVA Friday, moving down from the top of its right shoulder (41.75) on rising volume, 2.4 million (average is 2.3 million). The stock is headed for a breakdown, on this move, below its neckline at the 36.29 range, but has the 200 day MVA, potentially strong support, at 33.63. We will watch that support carefully on a break below the neckline, where aggressive positions can be taken.
BUY POINT: Aggressive: 36 on volume of 3 million or higher. Target= 26. Stop=38
POSITION: June 45p to buy (ACF RI; delta= -1.00, low OI).
http://www.investmenthouse.com/ct/acf.html
CONTINUING PLAYS:
Upside:
PCLE (Pinnacle Systems--$9.17; +0.01; optionable): Photographic equipment
http://biz.yahoo.com/p/p/pcle.html
STATUS: Cup with handle. Still holding above the 18 day MVA (9.13) in the handle. Volume fell further below average Friday (238K; avg. 384K); for three days price/volume action looks good, and PCLE threw a volume spike Wednesday. Continue to look for a breakout from this 4-month base, which shows good accumulation vs. distribution (5 weeks to 1). Money flow and relative strength remain ahead of price.
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).
http://www.investmenthouse.com/ct/pcle.html
SCS (Steelcase--$16.82; +0.02; optionable): Business equipment
http://biz.yahoo.com/p/s/scs.html
STATUS: Base within a base. SCS is in an 8-week cup with handle that is inside a larger 20-month cup base (this smaller base is functioning as a handle). For the last 4 days, 4 consecutive dojis on very low volume (45,300; avg. 147K) in the handle. Money flow is high and ahead of price, and the little base shows a 2-1 accumulation over distribution. Looking for a move up and breakout.
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/ct/scs.html
WATCHLISTS:
Awaiting Breakout Watchlist: These plays have not reached the buy point yet.
Puts:
CACI (Caci Intl--$31.86; -0.06; optionable): Technical services
STATUS: Put, kiss good-bye. Made its way back to the 200 day MVA after breaking that support in late April. We were looking for the move down after Wednesday's tap at the resistance, but CACI made it over the last 2 days of the week. Volume was lower (428,600; avg. 700K) with the stock below the 18 day MVA (31.98). Looking for another breach of support for a drop to 27.50.
BUY POINT: 31 on rising volume (700K or more). Target=27.50 (initial). Below that, 25.50. Stop=32.50
POSITION: June 37.50p to buy (KFQ RU; delta -0.75, 87 OI).
MGAM (Multimedia Games--$27.17; -0.73; optionable): Gaming
STATUS: Put; kiss good-bye. Moving back up to the 50 day MVA for the second time after breaking that support on a strong gap down mid-April. Volume was higher Friday on a close just above the 18 day MVA at 28.23 (272K; avg. 428K). Looking for a move back down to the target at the 200 day MVA.
BUY POINT: 26.50 on continued rising volume. Target=22. Stop=28.50
POSITION: June 35p to buy (QMG RG; delta= -79).
Upside Plays:
QFAB (Quaker Fabric--$13.43; -0.15; no options): Textile manufacturing
STATUS: Breakout test. Holding a cent above support (18 day MVA) in the lateral test, volume rising Friday as the stock started to sell down. It fell to a low at 13.20 then recovered. Want to see it hold here for a breakout from the pattern that has an ascending wedge character (posting higher lows until Friday). Volume 106,400 (avg. 114K). High money flow.
BUY POINT: 14.31 on volume of 200,000 or more. Target=17.50. Stop=13.25
POSITION: Stock (no option chain)
HZO (Marinemax--$13.59; -0.11; no options): Boats
STATUS: Flags. Was working on another flag, but the pattern lost the sideways characteristic and price moved down to again test the 50 day MVA by Friday (13.17). It can still move up (money flow remains high and ahead of price) but we want to see the move back over the 18 day MVA (13.96).
BUY POINT: 14.50 on volume of 125K or higher. Target=17.40. Stop=13.75
POSITION: Stock.
IRM (Iron Mountain--$31.81; -0.18; 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. Price/volume action has been great during this base with accumulation weeks outnumbering distribution weeks 4 to 1. Spent one day last week below the 50 day MVA (31.18) but despite some volatility remains above the 18 day MVA (tapped on Friday's low at 31.50) and we like Friday's very low volume (77,400; avg. 207K). Super money flow and high relative strength.
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).
Current plays Watchlist: These are plays that have hit the buy point and we are currently monitoring.
Puts:
GCI (Gannett Co--$73.28; -1.22; optionable): Media
STATUS: Put. Hit the new buy point at 73.55 in the "kiss good-bye" fall from the 50 day MVA (74.90). Volume was lower at 595,500 (avg. 1.07 million) but the stock fell below the short term down trendline. Continue to look for the fall to our target at 69 (near the 200 day MVA). A hold for buys at 73.62 and 73.55. Target=69. Stop=75.50.
GNTA (Genta--$11.24; -0.37; optionable): Biotechnology
STATUS: Put after 200 day MVA breach. Dropped to 11 after the breach, moved back up to test the 10 day MVA (12.01) and on rising volume Friday continued falling though it bounced back off a low of 10.83, above the Monday low at 10.62. Volume was higher but below average levels. A hold for buys at 11.75, looking for continued rising volume for the fall. Target=9 (initial), then 8. Stop=13.25.
BRCD (Brocade--$21.41; -1.72; optionable): Communication equipment
STATUS: Descending wedge. Broke down Tuesday in the pattern but rallied Wednesday; once again the 50 day MVA (25.45) turned the stock back down. Volume is well above average still though decreasing slightly; Friday BRCD bounced off a low (20.50) but closed under the March and April lows at the 22 range. A continued hold for buys at 21.50. Target=15. Stop=23
UVN (Univision--$40.00; -1.89; optionable): Broadcast TV
STATUS: Kiss goodbye. Made it back over resistance in the rally (the 50 day MVA) but the short term down trendline posed resistance and on strong volume the stock crashed back through the moving average on strong, above average volume. Reported earnings beat estimates but analyst comments about slowed revenue growth did some damage. Closed at recent support at 40, but on continued selling can make the move down to 35.50 (target). Looking for new positions on a move below 39.50. Stop=42.80
ARW (Arrow Electronics--$24.71; -0.37; optionable): Wholesale electronics
STATUS: Put on kiss good-bye. Couldn't break the 18 day MVA in the rally and Friday was back down but just above the previous May closing low (24.64). Volume slightly higher but below average, and the stock showed a loose doji. A hold for buys at 25.55 and 25.25. Target=22 (initial), then 20. Stop=27.50.
GWW (W.W. Grainger--$52.35; -1.05; optionable): Wholesale Electronics
STATUS: Put: Breach of 50 day MVA. Holding recent support at 52 as volume falls off below average. Bounced back up Tuesday to the 18 day MVA (the 50 day is just above that), and can do it again if it does not move below 52 here. Volume decreasing and below average.
BUY POINT: A hold for put buys at 53.70; new buy point 51.90 on strong volume. Target=50 (initial); then 48. Stop=55.75.
POSITION: July 60p to buy (GWW SL; low OI, Delta -74)
AAPL (Apple Computer--$23.32; -0.87; optionable): Personal computers
STATUS: Put. Back under the 50 day MVA with the low tapping 23. Has been posting higher lows since December; May closing low at the up trendline connecting those lows bounced the stock back up on Wednesday. Can hold current positions but will watch the trendline support at 22.50 carefully. A hold for put buys at 23.25. Target=20. Stop=24.50.
TROW (T. Rowe Price--$35.74; -1.02; 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 Wednesday's rally. Friday the 50 day MVA (37) turned it back down again (as it did in April) but volume was lower (just under average levels) and the 200 day MVA is at 35.11. Volume was rising and above average on the move up to the 50 day MVA but resistance remains tough. A hold for now. Target=30. Stop=36.
INTC (Intel--$27.01; -1.23; optionable): Semiconductors
STATUS: Put. Rallied Wednesday but didn't make it up to the 200 day MVA before falling back below the short term MVAs (10 day MVA, 27.73). Volume rising Friday on the selling (just under average levels); a hold for now for the move down to the 24 target. Target=24. Pulling stops down to 29.
CUM (Cummins--$40.10; -1.71; optionable): Big engines
STATUS: Put. Bounced Tuesday and Wednesday for a move back to resistance at the 10 day MVA (now at 42) but on lighter volume fell the last 2 days of the week. Holding for the drop to the target at 39.
NAV (Navistar--$38.34; -0.55; optionable): Trucks
STATUS: Closed below recent closing lows higher volume Friday (still well below average levels). We'd like to see the trend continue to take the stock down to the target at 37.75. Buy point was 41.70; a hold for those positions.
WL (Wilmington Trust--$63.43; -0.66; optionable): Regional bank
STATUS: Put. Turned back down from resistance (50 day MVA at 65.48) earlier in the week, and with volume rising Friday near average levels the stock pushed down for the third day and looks ready to complete the move to the 200 day MVA (62.60). If the higher volume continues, can break support for the move to our target at 60, but look for a possible bounce. A hold for buys at 65.50.
Upside:
CLHB (Clean Harbors--$12.39; +0.32; optionable): Waste management
STATUS: 18 MVA bounce. Made a major breakout run starting in February when it broke out of a flat base. After correcting back to the 50 day MVA early this month, made a stronger bounce from the 18 day Thursday, but lower volume Friday held it with a doji on the small gain. Still holding above resistance broken on that move (12), and will look for support there if it holds off on a continued bounce for the near short term. Money flow leading price higher, and relative strength is breaking out.
BUY POINT: A hold for aggressive buys at 12.50. Target=17. Stop=10.70 (18 day MVA currently at 10.99).
RAH (Ralcorp--$28.00; -0.31; no options): Processed foods
STATUS: 18 day MVA bounce. After testing close to the 50 day MVA Monday on above average volume, RAH followed up with a solid bounce from the 18 day MVA Wednesday but did not move over recent resistance at the 29 range. It pulled back and closed at the 18 day on a decrease in volume (78,800; avg. 91,200), after it hit the buy point at 29.10. We want it to hold for another bounce and breakout. Trying to form an ascending wedge. A hold. Target=35. Stop=27
KROL (Kroll, Inc.--$21.45; +0.01; optionable): Security services
STATUS: All-time high. Tested the breakout move from the reverse head and shoulders base and bounced from the 10 day MVA, launching a 6-day run that looks ready to top out since volume has been falling back on the price rise. Look for a test of the 10 day MVA range at 20.28). A hold for buys at 20.20. Target=24. Stop=18.75.
JILL (J. Jill Group--$32.85; +0.45; optionable): Catalog sales
STATUS: Flat base post breakout of cup w/handle. Has become somewhat volatile later in the week, showing high volume Wednesday and Friday but not getting anywhere. It still holds the 18 day MVA (31.79) which we expect it to test after showing a tombstone doji on strong volume Friday (310,300; avg. 247K). We will see if it can hold and move up from here. A hold for buys at 33.70. Target=36. Stop=29.95.
GMP (Green Mountain Power--$19.25; +0.29; no options): Electric utility
STATUS: Test of breakout. Tapped support on the low, the 18 day MVA then bounced on rising volume (10,400; avg. 7K). Looks ready to head up from here after a successful test. A hold for buys at 18.85; target is 22.62.
ULAB (Unilab--$30.35. +0.50; optionable): Healthcare software & services
STATUS: Test breakout. Fell back to the 10 day MVA in a test of the double bottom breakout. Volume remains low as it was on the breakout, so will have to see that really come on for a move up from here. A hold for buys at 29.25; target=35.
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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stock watch
stock recommendation
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