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us stock market, stock recommendation
Begin part 3 of 3
THE PLAYS:
Upside:
Play Date: 10/27/2009
BHI (Baker Hughes--$44.08; -0.14; optionable): Oil and gas equipment
http://biz.yahoo.com/p/b/bhi.html
After Hours: $44.08
EARNINGS: 11/04/2009
STATUS: ABCD. Nice charge higher to start October, taking BHI post-March high. Energy has been on the pullback the past week after that strong run, fading as the dollar rallies. BHI has formed a three week pattern, testing down below the September peak intraday on Tuesday, then rebounding to cut its losses to flat as it closed on top of that prior peak. This formed the D point and I like how BHI tested and then recovered to hold that support. It may form up more, but if BHI starts higher from this logical support point and can hold the move to the close we are ready to move in.
Volume: 5.659M Avg Volume: 6.933M
BUY POINT: $44.42 Volume=7.5M Target=$50.95 Stop=$43.31
POSITION: BIJ AP - Jan. $42c (54 delta) &/or Stock
http://www.investmenthouse.com/ci/bhi.html
Play Date: 10/27/2009
BTU (Peabody Energy--$42.18; -0.25; optionable): Coal
http://biz.yahoo.com/p/b/btu.html
After Hours: $41.71
EARNINGS: 10/20/2009
STATUS: Breakout test. Another energy stock that enjoyed a strong run from early October as the dollar sold. BTU is testing that move as the dollar bounces the past week. Tuesday BTU tapped the 18 day EMA (41.55) on the low and the 38% Fibonacci retracement level. Like how it tapped that level on the low and bounced to recover most of the loss on the session. That tap lower also put BTU right over the September peak, another reason to bounce. Like the candlestick pattern as well. If BTU can bounce off of this level and hold the move we are ready to move in as well.
Volume: 6.148M Avg Volume: 5.778M
BUY POINT: $42.68 Volume=7M Target=$49.95 Stop=$41.22
POSITION: BTU AH - Jan. $40c (59 delta) &/or Stock
http://www.investmenthouse.com/ci/btu.html
Play Date: 10/27/2009
CVO (Cenveo--$7.35; +0.04; optionable): Printing (direct mail, customized envelopes, etc. for banks, brokerage firms)
http://biz.yahoo.com/p/c/cvo.html
After Hours: $7.35
EARNINGS: Last announced 08/05/2009; should announce early November
STATUS: ABCD. Strong move to start October set up the pattern, and over the past two weeks it has put the pattern in place. Tuesday CVO tested lower, almost to the 50 day EMA (6.81) and the September peak, and then it snapped back up for a gain on rising volume. Very nice action showing plenty of buyers at that level. Ready to move in if CVO can continue the move. The options are low in number of open interests and have a wide spread. You can look at the $5 calls but that is a lot to pay for the play. Like the stock more. Nice pattern.
Volume: 446.609K Avg Volume: 467.937K
BUY POINT: $7.48 Volume=650K Target=$8.71 Stop=$6.86
POSITION: CVO AU - Jan. $7.50c (51 delta, low OI) &/or Stock
http://www.investmenthouse.com/ci/cvo.html
Play Date: 10/27/2009
HMSY (HMS Holdings--$41.00; -0.24; optionable): Business management services
http://biz.yahoo.com/p/h/hmsy.html
After Hours: $41.00
EARNINGS: 10/30/2009
STATUS: Cup w/handle. HMSY was one of the first stocks to move off the lows in October, never making the March dip that the rest of the market made. The small business service stocks were the first to show a sign of the recovery. So, after a few bases and the last good run from May to July HMSY has formed a new base, a nice 3 month jobber. The past week it has put in a nice handle, holding a pullback at the 10 day EMA (40.96). It is holding there, MACD is rising nicely, ready to breakout to a new high. Watching for HMSY to put in a good upside move and hold into the close. That is our entry cue.
Volume: 184.536K Avg Volume: 304.897K
BUY POINT: $41.74 Volume=445K Target=$46.45 Stop=$40.11
POSITION: QHT CH - Mar. $40c (56 delta) &/or Stock
http://www.investmenthouse.com/cd/hmsy.html
New play on existing position:
Play Date: 10/27/2009
ICE (Intercontinental Exchange--$102.78; -0.47; optionable)
http://biz.yahoo.com/p/i/ice.html
After Hours: $102.78
EARNINGS: 11/03/2009
STATUS: Flag/Breakout test. ICE is another leader that is testing the past week and is trying to hold at the 38% Fibonacci retracement level. Nice strong volume on the way up and now a low volume test of the 38% level that coincides with the 10 day EMA (102.87). Looking for ICE to hold this level and start back up. A hold of the move into the last hour is a buy. Earnings are next week and that play has been volatile, but if ICE shows us a move off this test it can give us a nice run into the results that we can bank, part or all, ahead of the announcement.
Volume: 725.465K Avg Volume: 1.503M
BUY POINT: $104.42 Volume=1.8M Target=$119.95 Stop=$100.66
POSITION: IHH AT - Jan. $100c (59 delta) &/or Stock
http://www.investmenthouse.com/ci/ice.html
Downside:
Play Date: 10/27/2009
RIMM (Research in Motion--$63.75; -1.93; optionable): PDA's
http://biz.yahoo.com/p/r/rimm.html
After Hours: $63.76
EARNINGS: 12/17/2009
STATUS: Gap and run. RIMM gapped nastily lower on its earnings in late September, but it did not go anywhere at first. It traded up and down between 65 and 70. 70 was the gap down point. 65 was the July low. We waited to see which would win. Tuesday RIMM broke below 65 and the rising 200 day SMA (65.39) on rising volume. That shows the gap lower has held, and stocks tend to continue in the direction of major, breakaway gaps through support. That is what RIMM did and we are looking to move in as it continues lower. There is some support at 60 from the February peak and a gap higher from April. This time, however, RIMM has set up a big double top spanning June and September, and after that earnings gap lower it could easily fill the gap. A move to our initial target lands a 65%ish gain.
Volume: 15.952M Avg Volume: 15.653M
BUY POINT: $63.47 Volume=17M Target=$55.45 Stop=$66.52
POSITION: RFY MM - Jan. $65p (-50 delta)
http://www.investmenthouse.com/ci/rimm.html
CONTINUING PLAY READY TO MOVE:
Play Date: 10/24/2009
CAT (Caterpillar--$56.69; -0.38; optionable): Heavy machinery
http://biz.yahoo.com/p/c/cat.html
After Hours: $56.56
EARNINGS: 01/26/2010
STATUS: Flag. CAT's earnings were good enough to bounce it higher and now it is making the test of that move. Tuesday the pattern set up even better with a nice tight doji at the 10 day EMA (56.63) the coincides with the 38% Fibonacci retracement. Looking for a move up off this level as our cue to enter. To recap: CAT blasted higher last 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 and jumped sharply off that level Thursday. Friday and Monday CAT faded but on very low trade, still holding above the 10 day EMA. If it turns back up from here and can hold the move into the last hour we won't wait for another test.
Volume: 10.942M Avg Volume: 11.341M
BUY POINT: $57.11 Volume=12M Target=$63.95 Stop=$55.04
POSITION: CAT AK - Jan. $55c (64 delta) &/or Stock
http://www.investmenthouse.com/ci/cat.html
Play Date: 10/26/2009
HWD (Harry Winston Diamond--$9.34; -0.26; optionable): Diamond mining
http://biz.yahoo.com/p/h/hwd.html
EARNINGS: 11/08/2002
STATUS: ABCD. HWD continues setting up with the Tuesday ready lower to the early October range and then a sharp rebound to recoup most of the losses and close at the 18 day EMA. That action shows buyers are at the ready and moved in when HWD made a dip. Looking for a move higher to hold to give us the buy. To recap: HWD is testing last week's breakout from a 5 week base that consolidated the September surge higher. Second base off the March low leaves it plenty of room to run. Great break higher and now stair-stepping back down, forming a short ABCD pattern. Looks as if it will make the D point at the 18 day EMA (9.37) as it tapped that level and bounced Monday on rising volume. Looking for a move back up that holds to the close to give us the buy.
Volume: 278.011K Avg Volume: 340.942K
BUY POINT: $9.79 Volume=450K Target=$11.45 Stop=$9.18
POSITION: HWD BU - Feb. $7.50c (77 delta, wide sprd) &/or Stock
http://www.investmenthouse.com/ci/hwd.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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us stock market
stock recommendation
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