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Begin part 3 of 3
THE PLAYS:
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NEW FEATURE: Each play contains an additional link to a VIDEO that discusses the play in terms of the CHART PATTERN it is currently showing. Patterns, buy points, and targets are discussed along with other points that make the play a good one as well as what areas to watch for. We hope you enjoy this new addition.
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Upside:
Play Date: 11/21/2009
ARB (Arbitron--$22.28; +0.08; optionable): OEM and after-market parts for heavy duty vehicles (ambulances, fire trucks, etc.)
http://biz.yahoo.com/p/a/arb.html
After Hours: $22.30
EARNINGS: 10/20/2009
STATUS: Pennant. ARB has formed the current 5 week pattern following the late September breakout from a 5 month cup base. That base was ARB's first consolidation after the run off the selloff lows into March. A very good foundation for a new move higher, and ARB took the first step with the breakout that rallied it over 25. It has tested and come back to tap the prior high in the base from late April, working laterally as the 50 day EMA (21.43) rises to meet it. May take a few more sessions to complete the lateral consolidation but we are ready to move in as ARB breaks higher through the buy point and can hold the gain into the last hour or close. Plenty of room overhead to run up toward the October 2008 closing low.
VIDEO: http://investmenthouse1.com/ihmedia/ARB.wmv
Volume: 257.605K Avg Volume: 321.683K
BUY POINT: $22.56 Volume=400K Target=$26.94 Stop=$21.22
POSITION: ARB BX - Feb. $22.50c (53 delta, low OI) &/or Stock
http://www.investmenthouse.com/ci/arb.html
Play Date: 11/21/2009
COST (Costco--$60.06; -0.42; optionable): Discount warehouse stores
http://biz.yahoo.com/p/c/cost.html
After Hours: $60.48
EARNINGS: 12/10/2009
STATUS: Breakout test. COST gapped higher in September and has trended higher since. It formed a lateral base from mid-September to early November, then broke higher just over a week into the month, hitting a new high on the move. It has come back to test, tapping at the 18 day EMA (59.65) on the Wednesday through Friday intraday lows, then rebounding to close above the 10 day; nice action showing the buyers are still picking up COST on every dip. Looking to move in as COST continues this move higher after this test.
VIDEO: http://investmenthouse1.com/ihmedia/COST.wmv
Volume: 2.696M Avg Volume: 4.295M
BUY POINT: $60.82 Volume=5M Target=$68.85 Stop=$59.08
POSITION: PRQ DL - Apr. $60c (53 delta) &/or Stock
http://www.investmenthouse.com/ci/cost.html
Play Date: 11/21/2009
HTCH (Hutchinson Technology--$7.05; +0.01; optionable): PC data storage devices
http://biz.yahoo.com/p/h/htch.html
EARNINGS: 01/26/2010
STATUS: ABCD. Nicely set up to move higher after this 10 week consolidation of the July to early September run. HTCH bottomed in November 2008 and then moved laterally into July; quite a long base while other stocks moved up ahead of it. It finally moved and when it did the surge was excellent. Now it has formed a stair-step ABCD consolidation, forming the D point to start November. Bounced and rallied to mid-month and then tested last week, coming back to tap at the 50 day EMA (6.64) on the Friday low, reversing to close flat. Looking to move in as HTCH continues higher off of this test. Nice setup.
VIDEO: http://investmenthouse1.com/ihmedia/HTCH.wmv
Volume: 277.448K Avg Volume: 387.889K
BUY POINT: $7.12 Volume=465K Target=$8.76 Stop=$6.62
POSITION: UTQ BU - Feb. $7.50c (48 delta) &/or Stock
http://www.investmenthouse.com/ci/htch.html
Play Date: 11/21/2009
OMN (Omnova Solutions--$7.00; +0.21; optionable): Specialty Chemicals
http://biz.yahoo.com/p/o/omn.html
After Hours: $7.10
EARNINGS: 12/21/2009
STATUS: Triangle. Chemicals are back in vogue. Big surge from March through early August and then a nice consolidation base to the end of September, gapping higher out of the base on solid earnings. OMN rallied to 8 on the breakout move and is now testing. It fell back to the top of the base (the August peak) and bounced. Working laterally the past two weeks as the 50 day EMA (6.59) rises below it. Getting close to the next break higher $and ready to step in as OMN makes the break through the buy point.
VIDEO: http://investmenthouse1.com/ihmedia/OMN.wmv
Volume: 296.518K Avg Volume: 497.683K
BUY POINT: $7.12 Volume=650K Target=$8.58 Stop=$6.51
POSITION: OMN BU - Feb. $7.50C (48 delta) &/or Stock
http://www.investmenthouse.com/ci/omn.html
Play Date: 11/21/2009
POWR (Powersecure International--$8.01; +0.15; optionable): Energy and smart grid solutions
http://biz.yahoo.com/p/p/powr.html
After Hours: $7.89
EARNINGS: 11/05/2009
STATUS: ABCD. Strong rally in September to October is the impulse move to set up this pattern. It has stair-stepped back down through Friday, bottoming this week at the 50 day EMA (7.79) and forming the D point. Showed some upside life Wednesday and then Friday; looks ready to make the break higher this week and we are ready to move in as it does.
VIDEO: http://investmenthouse1.com/ihmedia/POWR.wmv
Volume: 81.917K Avg Volume: 119.809K
BUY POINT: $8.28 Volume=200K Target=$10.33 Stop=$7.72
POSITION: MEK CU - Mar. $7.50c (65 delta) &/or Stock
http://www.investmenthouse.com/ci/powr.html
Downside:
Play Date: 11/21/2009
IYT (Dow Jones Transportation ETF--$70.81; -0.12; optionable)
After Hours: $70.76
STATUS: Rollover. The transports are range-bound, trading from 65ish to 73ish since September. This is IYT's third trip to the top of the range, and it started back down to end last week, selling on strong, above average volume Thursday. Looks to be rolling over from a triple top. Managed to hold the 18 day EMA (70.26) on the Friday low, again on strong volume. If it cannot bounce or hold a bounce to start next week we are looking to move in on a further downside move to ride IYT back to the bottom of the range. That move lands us a gain in the 50% range with the March options and 60+% with the January (no open interests on those as they start to trade for the first time Monday).
VIDEO: http://investmenthouse1.com/ihmedia/IYT.wmv
Volume: 1.67M Avg Volume: 832.32K
BUY POINT: $70.46 Volume=1.2M Target=$65.35 Stop=$73.04
POSITION: IHB OS - Mar. $71p (-49 delta) or IHB MS - Jan. $71p (-51 delta)
http://www.investmenthouse.com/ci/iyt.html
Play Date: 11/21/2009
MAN (Manpower--$49.69; +0.61; optionable): Staffing services
http://biz.yahoo.com/p/m/man.html
After Hours: $49.35
EARNINGS: 10/21/2009
STATUS: Well you would expect the staffing companies to have a hard go of late. Now they were rallying, MAN included, as hopes for an economic recovery bloomed. As jobs continue to head lower along with the workweek and new orders, the optimism is waning. Poor earnings don't help; MAN gapped lower in mid-October, blowing through support on the move. It sold off down to 45 where the next support resides. This month MAN rebounded back up to the 50 day EMA (51.73) and stalled, moving laterally through Wednesday. Gapped lower Thursday below support at 50 and could not recover it Friday. Looking for MAN to continue to lose its manhood to the downside, moving in for the downside play. A move to the May and June peaks down at 45 lands a 70%ish gain.jm
VIDEO: http://investmenthouse1.com/ihmedia/MAN.wmv
Volume: 660.543K Avg Volume: 928.859K
BUY POINT: $49.38 Volume=1.2M Target=$45.25 Stop=$51.77
POSITION: MAN MJ - Jan. $50p (-45 delta)
http://www.investmenthouse.com/ci/man.html
CONTINUING PLAYS READY TO MOVE:
Play Date: 11/19/2009
HUM (Humana--$40.44; -0.39; optionable): Health care plans
http://biz.yahoo.com/p/h/hum.html
After Hours: $40.44
EARNINGS: 02/01/2010
STATUS: Breakout test. Nice test, holding the 18 day EMA (40.09) again on the Friday low. Excellent setup and just waiting for the break higher. To recap: HUM formed a nice 7 week cup base at the 50 day EMA (38.46) and broke out a week into October. Nice pattern, nice upside break. It has now come back to test, tapping the 18 day EMA (40.05) intraday and then bouncing sharply to hold the 10 day EMA on the close. Great reach lower with the buyers pushing it right back up. Looks as if HUM is set up to continue the breakout move and run toward the February peak. Simply looks very good.
VIDEO: http://investmenthouse1.com/ihmedia/HUM.wmv
Volume: 1.564M Avg Volume: 2.494M
BUY POINT: $41.05 Volume=3M Target=$46.15 Stop=$39.54
POSITION: HUA BH - Feb. $40c (50 delta) &/or Stock
http://www.investmenthouse.com/ci/hum.html
Play Date: 11/17/2009
MDT (Medtronic--$39.62; +0.01; optionable): Medical appliances
http://biz.yahoo.com/p/m/mdt.html
After Hours: $39.62
EARNINGS: 11/24/2009
STATUS: Flag. Still testing, showing a second doji at the 10 day EMA (39.37) on the session lows. Great setup to continue the breakout once the test is over. To recap: After a 2 month pullback to test the July to early September run MDT blasted higher to start November, surging from 36 to 40. The past week MDT has worked laterally and slightly lower, forming the flag to the flag pole, tapping the rising 10 day EMA on the Tuesday low. After tapping that near support MDT jumped higher Tuesday, closing near the top of the recent range. Nice volume, moving back up to average, as MDT made the move. Looking for a continued break higher and that is when we move into this play. Resistance at 45 and that is our initial target where we will take at least part of the position off the table.
VIDEO: http://investmenthouse1.com/ihmedia/MDT.wmvVolume: 5.053M Avg Volume: 6.642M
BUY POINT: $40.32 Volume=7M Target=$45.45 Stop=$38.28
POSITION: JIW BH - Feb. $40c (56 delta) &/or Stock
http://www.investmenthouse.com/ci/mdt.html
Play Date: 11/18/2009
PLCE (Childrens Place--$33.58; -0.62; optionable): Children's apparel stores
http://biz.yahoo.com/p/p/plce.html
After Hours: $33.60
EARNINGS: 11/19/2009
STATUS: Ascending triangle. PLCE announced earnings Thursday and while results were not enough to break PLCE out, they also did not disrupt the pattern. Indeed PLCE made a bit further test to the 50 day EMA (33.10) support and held, bouncing up off the lows. Like how it showed that strength. Just waiting for the break higher. To recap: Big surge off the March low doubled PLCE's price. It sold off half the gain into early July, but has been building a series of higher lows below that June peak at 36 ever since. The range is tightening this month with PLCE holding near support at the 18 day EMA (34.52) this week, tapping it on the low and then rebounding to close. Strong volume Wednesday, the first above average volume in two weeks. Looking for a break higher from here to enter the play.
VIDEO: http://investmenthouse1.com/ihmedia/PLCE.wmv
Volume: 760.282K Avg Volume: 962.529K
BUY POINT: $34.55 Volume=1.4M Target=$41.45 Stop=$32.88
POSITION: TUY CG - Mar. $35c (52 delta) &/or Stock
http://www.investmenthouse.com/ci/plce.html
Downside:
Play Date: 11/19/2009
PSYS (Psychiatric Solutions--$21.00; -0.24; optionable): Healthcare services
http://biz.yahoo.com/p/p/psys.html
After Hours: $21.08
EARNINGS: 10/27/2009
STATUS: Bear flag. Second doji below the 200 day SMA, gapping lower Friday, trying to recover, then fading to the close. Still cannot get back through resistance and ready to move in as PSYS turns back down. To recap: PSYS formed a head and shoulders and shoulders spanning August through late October. Earnings came out and PSYS lost its head and shoulders. It sold off to the 200 day SMA (22), tried to hold, but then gapped sharply lower through that support. It has since bounced back up to the 200 day this past week and is sliding laterally in what appears to be a stall. A gap through important support that does not fill the gap tends to continue on the direction of the gap. Looking for PSYS to roll back from here and as it does we move in for the play. A move to the target lands a 48%ish gain.
VIDEO: http://investmenthouse1.com/ihmedia/PSYS.wmv
Volume: 796.152K Avg Volume: 967.93K
BUY POINT: $21.09 Volume=1.4M Target=$18.04 Stop=$22.16
POSITION: BYU OX - Mar. $22.50p (-50 delta)
http://www.investmenthouse.com/ci/psys.html
Good Investing!
Jon L. Johnson and your IH Alerts 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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