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Begin part 3 of 3
THE PLAYS:
Upside:
Play Date: 10/24/2009
BX (The Blackstone Group--$15.82; -0.27; optionable): Asset Management
http://biz.yahoo.com/p/b/bx.html
After Hours: $15.80
EARNINGS: 08/06/2009
STATUS: Breakout test. This pattern has a lot going for it. BX formed a 9 week ascending triangle August through early October and then gapped higher on its earnings, clearing the pattern. It rallied to 17 and then tested, coming back to fully test the breakout on the Thursday low and then rebounding for a solid gain. So Friday it could not hold that break; it is still in excellent shape in this flag pattern following its breakout. Looking for a bounce higher that holds to give us the entry. Love the first test of a breakout, particularly from a great pattern.
Volume: 1.952M Avg Volume: 3.948M
BUY POINT: $15.44 Volume=5M Target=$17.88 Stop=$14.89
POSITION: BX AC - Jan. $15c (70 delta) &/or Stock
http://www.investmenthouse.com/ci/bx.html
Play Date: 10/24/2009
CAT (Caterpillar--$57.60; -1.14; optionable): Heavy industrial equipment
http://biz.yahoo.com/p/c/cat.html
After Hours: $57.80
EARNINGS: 01/26/2010
STATUS: Flag. CAT blasted higher Monday, clearing a 6 week base in a series of bases off the March low. Strong surge on its earnings and then spent the rest of the week testing. Found support at the 10 day EMA and the 38% Fibonacci retracement (56.11) and jumped sharply off that level Thursday. Friday it faded some but on very low trade, still holding well above that level. May come back to double test it; if so that is fine as we can wait and let it test and grab it on the bounce. If it turns back up from here, however, and can hold the move into the last hour we won't wait for another test.
Volume: 8.776M Avg Volume: 11.572M
BUY POINT: $57.84 Volume=12M Target=$63.95 Stop=$56.39
POSITION: CAT AK - Jan. $55c (64 delta) &/or Stock
http://www.investmenthouse.com/cd/cat.html
Play Date: 10/24/2009
HCN (Health Care REIT--$44.49; -0.58; optionable)
http://biz.yahoo.com/p/h/hcn.html
After Hours: $44.49
EARNINGS: 11/04/2009
STATUS: Breakout test. HCN broke out from a 10 week ascending triangle two weeks back. Monday it looked as if HCN was off to the races, but as the market chopped back and forth the rest of the week, HCN waffled and tested further. It held the top of the base, and this week we look for HCN to do the same and then make the break higher. Just have to be patient and let it complete its test. When it bounces and holds the move into the close, preferably on some good volume, we can move in.
Volume: 2.626M Avg Volume: 2.059M
BUY POINT: $44.72 Volume=2.8M Target=$49.95 Stop=$43.69
POSITION: HCN CH - Mar. $40c (72 delta) &/or Stock
http://www.investmenthouse.com/cd/hcn.html
Play Date: 10/24/2009
INFY (Infosys Technologies--$48.58; +0.43; optionable): Technical software
http://biz.yahoo.com/p/i/infy.html
After Hours: $48.46
EARNINGS: 10/09/2009
STATUS: Triangle. Nice run for INFY IN 2009. In September it made it to the early summer 2008 peak, the one just before the market keeled over. After making that level it started sideways, forming the current 7 week pattern. Nice series of higher lows shows pressure is building for the break higher. Friday INFY gapped higher but could not continue the move. Still held a nice gain. Just waiting for INFY to continue the move and we can start buying some positions and then look for a break through 50 to clear that prior peak.
Volume: 1.678M Avg Volume: 2.112M
BUY POINT: $48.77 Volume=2.5M Target=$54.91 Stop=$46.77
POSITION: IUN AI - Jan. $45c (72 delta) &/or Stock
http://www.investmenthouse.com/cd/infy.html
Play Date: 10/24/2009
PIR (Pier 1 Imports--$4.32; -0.25; no options): Home furnishings stores
http://biz.yahoo.com/p/p/pir.html
After Hours: $4.30
EARNINGS: 12/17/2009
STATUS: Flag. In mid-September PIR broke higher on strong volume, clearing a 4.5 month flat trading range. Strong earnings were the catalyst. It tested and then took off three weeks back. It is now making its second test of that move, coming back to the 18 day EMA (4.21) and the 50% Fibonacci retracement. May test some here; likes to form short double bottoms at this retracement level, but if PIR shuffles laterally and flattens out the test as it has started to do we can move in when it posts a solid upside move and can hold it heading into the close. Just the second test so still early in the move.
Volume: 1.926M Avg Volume: 2.554M
BUY POINT: $4.52 Volume=3.8M Target=$5.39 Stop=$4.18
POSITION: - Stock (option spreads too wide)
http://www.investmenthouse.com/cd/pir.html
New plays on current positions:
Play Date: 10/24/2009
ANV (Allied Nevada Gold--$10.02; +0.08; optionable)
http://biz.yahoo.com/p/a/anv.html
After Hours: $10.02
EARNINGS: 08/07/2009
STATUS: ABCD Upside. ANV made us some nice money on its blast higher in early October, and now that it is testing that breakout, holding it to end last week and forming an ABCD pullback, we are looking to get into some more positions. Like how it is holding right on top of the prior range. It will likely consolidate a bit more here, maybe forming a short double bottom over the old range high at 10. What we want to see is a solid move higher that holds into the close; good volume is a big plus if we are moving in on the next upside move. Otherwise we can let it make a second test of this level and move in.
Volume: 449.479K Avg Volume: 385.298K
BUY POINT: $10.24 Volume=550K Target=$11.95 Stop=$9.52
POSITION: ANV CB - Jan. $10c (62 delta) &/or Stock
http://www.investmenthouse.com/ci/anv.html
Play Date: 10/24/2009
CLF (Cleveland-Cliffs--$37.83; -0.80; optionable): Steel and iron
http://biz.yahoo.com/p/c/clf.html
After Hours: $37.83
EARNINGS: 10/29/2009
STATUS: Flag. While some in the steel sectors are struggling, CLF is not. Strong break higher in September, a good test to start October, and then off again. The past week it was testing, its second test after the September breakout from its 4 month base. It is holding at the 10 day EMA at 37.50; may try to come back a bit more to the 18 day EMA (36.34), but last week it was showing signs it didn't want to go that far, i.e. a doji with a big tail on Thursday. If it takes off to the upside from here and can hold it toward the close that is good enough to move in on.
Volume: 3.669M Avg Volume: 4.56M
BUY POINT: $38.12 Volume=5M Target=$43.95 Stop=$35.88
POSITION: CGJ AD - Jan. $37c (65 delta) &/or Stock
http://www.investmenthouse.com/ci/clf.html
Downside:
Play Date: 10/24/2009
SHAW (The Shaw Group--$28.86; -0.50; optionable): Heavy construction
http://biz.yahoo.com/p/s/shaw.html
After Hours: $28.86
EARNINGS: 10/29/2009
STATUS: Bear Flag. SHAW put together a bullish triangle from late August to mid-October, consolidating the July to August rally. Then it made the breakout . . . to the downside. It gapped lower out of the base on huge trade. It checked up at the 200 day SMA (28.71) last week and indeed managed to bounce. Friday SHAW made it all the way up to the October low, the last low in the pattern, and then reversed, showing a big shadow/wick on the candle and closing at the session low. That reach higher was also to the 38% Fibonacci retracement, and a failure there shows the downside move still has a lot of momentum. Thus we are looking to play SHAW lower from here. A move to the initial target lands a 41%ish gain. We will look to bank some partial profits there (1/3 or 1/2) and then see if it really breaks and goes down to 24 to 23.
Volume: 703.897K Avg Volume: 1.033M
BUY POINT: $28.66 Volume=1.4M Target=$26.08 Stop=$30.21
POSITION: SGR MF - Jan. $30p (-53 delta)
http://www.investmenthouse.com/ci/shaw.html
Good Investing!
Jon L. Johnson and The Daily Staff
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 of 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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