|
|
us stock market, trade stock
Begin Part 2 of 2
The S&P 500 has that 5-year head and shoulders pattern with a neckline roughly at 950. If it completes the pattern it could fall to near 450; that would put it back at the starting point in 1995 when the index took off. As we discussed two weeks back, the last time this type of massive climb occurred was in the late 1920's and early 1930's, and the Dow completed its head and shoulders and fell even lower. You have no doubt heard recently about the '2 down years and then up' theory, i.e., that the market does not fall three years straight. Well, it does sometimes, and one was back in the 1930's.
We want to be clear: that was a depression. This is no depression. Thus we do not believe the indexes will fall to these low levels as there is underlying earnings support as the economy improves. Rising economic activity means rising earnings and more support for stock prices. That means they do not continue to tank but the big names may grind in a range for quite a long while before they can move higher (as we noted before, some will not every move higher). That is one potential reality we have to face and why we need to be cognizant of the stocks that come to market and show new ideas and have the sales and earnings that show consumers want their products.
THE PLAYS:
Best Plays:
1) CVH: Sector is on the move again.
2) AXP: Low volume test.
3) BL: Still tight.
4) SALM: Still in the good pattern.
5) ERTS: Holding well.
6) JHBT: Another one holding up well.
7) Watchlists: ATH; NX; PLCE (looks good)
NEW PLAYS
CVH (Coventry Health Care--$32; +2.05; optionable): Medical group
http://biz/yahoo.com/p/c/cvh.html
STATUS: Testing breakout for a new high. CVH broke out of a cup w/handle in late April, rallied to near 32 and then tested the breakout. It has rallied again, now looking for a new high on a strong volume session Wednesday. Relative strength is excellent, already breaking out on the move. The sector looks to be heating up once again.
Volume: 618.8K Avg Volume: 400.5K
BUY POINT: $32.60 Volume=601K Target=$39 Stop=$29
POSITION: CVH JE - Oct. 25 call (delta 86) and/or stock
http://www.investmenthouse.com/ct/cvh.html
QCOM (Qualcom--$32.84; +0.4; optionable): Cell phones
http://biz/yahoo.com/p/q/qcom.html
STATUS: Put. Some say QCOM is ready to rise again, but looking at the chart it is at a down trendline that it started in March and has bounced down from once already. This down trendline roughly corresponds with the 50 day MVA (33.29). The stock made a bit higher low at 30 in late May before making the move up the past two sessions. While volume was above average Tuesday, it was back below average today as it tested the 50 day MVA and down trendline. It does not look all that strong here.
Volume: 11.183M Avg Volume: 13.7M
BUY POINT: $31.50 Volume=1.5M Target=$25 Stop=$33.50
POSITION: AAW VH - Oct. 40 put (delta -60) or AAW SH - July 40 put (delta --76). Prefer the October.
http://www.investmenthouse.com/ct/qcom.html
CONTINUING PLAYS:
Upside:
BL (Blair Corp.-- $22.71; -0.01; no options): Play Date: 05/21/2002
http://biz/yahoo.com/p/b/bl.html
STATUS: Cup w/handle (5 month). Continues in the handle riding the 18 day MVA and showing a doji on that moving average today. Volume was almost nonexistent. Awaiting the breakout move. Excellent accumulation in the base with money flow leading the way up and relative strength ready to breakout as well.
Volume: 3K Avg Volume: 14.409K
BUY POINT $23.85 Volume=45K Target=$27.5 Stop=$22
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/bl.html
BLC (Belo-- $23.95; +0.14; optionable): Play Date: 05/25/2002
http://biz/yahoo.com/p/b/blc.html
STATUS: Flat base. Still in a very tight lateral move right at the breakout point, holding nearly steady again for the seventh consecutive session. We got a volume spike Monday, but BLC has tested the 10 day MVA (23.78) and showed another doji today on reduced volume. We could see a further test back (18 day at 23.60), looking for that move to shakeout some sellers and then the breakout.
Volume: 231.1K Avg Volume: 287.5K
BUY POINT: $24.25 Volume=342K Target=$30 Stop=$22.55
POSITION: Stock and/or BLC JD - Oct. 20c (delta 94)
http://www.investmenthouse.com/ct/blc.html
ECL (Ecolab--$46.59; +0.20; optionable): Play Date: 05/23/2002
http://biz/yahoo.com/p/e/ecl.html
STATUS: Cup w/handle. Trying to break from its 12-week base, but is having trouble putting together a strong upside move. It has tried and failed on a couple of occasions, making the handle spread out as it drifts laterally. Monday ECL pulled abruptly back from Friday's attempt to breakout, but it has held the 18 day MVA (46.50) with consecutive dojis, today on big volume. We will see if it can generate a big volume move that it can sustain over the buy point. Good accumulation in the base.
Volume: 628.6K Avg Volume: 354.9K
BUY POINT $47.80 Volume=500K Target=$57.36 Stop=$44.45
POSITION: Stock and/or ECL JI - Oct. $45c (delta 65)
http://www.investmenthouse.com/ct/ecl.html
ERTS (Electronic Arts-- $64.10; -0.18; optionable): Play Date: 05/30/2002
http://biz/yahoo.com/p/e/erts.html
STATUS: Cup. ERTS has pulled into an ascending wedge as it approaches the prior cup highs at 66. The steady highs in the wedge are at 65 with the lows holding the 18 day MVA (62.72), which ERTS tested at its low today before closing with a doji. We were watching for ERTS to start a handle, and it still could drift down toward 62 in such a pattern. For now we will watch for a breakout of the wedge.
Volume: 2.78M Avg Volume: 2.9M
BUY POINT: 65.10. New high: $66.12 Volume=4M Target=$79.50 Stop=$61.49
POSITION: EZQ IL - Sept. $60 call, delta 68 and/or stock
http://www.investmenthouse.com/ct/erts.html
FTEK (Fuel Tech--$6.34; +0.34; no options): Play Date: 06/01/2002
http://biz/yahoo.com/p/f/ftek.html
STATUS: Ascending wedge. A small issue that made a great run in the last quarter of 2001, and since has battled 6.50 as it tests back, making higher lows to form an ascending wedge. Last week it bounced again from its 50 day MVA (6.04), but abruptly fell back on big volume yesterday. FTEK was able to hold and bounce today, but volume was very low. Not the best action here, so we will see if it can hold and set up for the breakout. The high is 6.82, with 6.55 being the recent highs. We will use that level for a breakout. Shows great money flow, buying and relative strength.
Volume: 9.6K Avg. Volume: 61.9K
BUY POINT: $6.65 Volume=90K Target=$8 Stop=$5.95
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/ftek.html
JBHT (JB Hunt Transportation--$27.10; +0.49; optionable): Play Date: 06/01/2002
http://biz/yahoo.com/p/j/jbht.html
STATUS: Ascending wedge. Pulled back off of the recent sharp move up, but is holding the 50 day MVA (26.54). JBHT broke out of a cup with handle in January, ran to 28, and then formed the current ascending wedge pattern. It was not able to carry through on the breakout, and ascending wedges after such breakouts give it further time to consolidate to give a stronger move. The fact that it can form such a pattern instead of breaking down is a big plus. The accumulation weeks outnumber distribution weeks 7 to 2 in the base; excellent accumulation. Relative strength has broken out.
Volume: 358.9K Avg Volume: 443.3K
BUY POINT: $28.72 Volume=545K Target=$36 Stop=$25.40. More aggressive can look at a move over 28 with the same volume.
POSITION: JHQ KX - Nov. $25 calls, delta 74 and/or stock
http://www.investmenthouse.com/ct/jbht.html
LRW (Labor Ready--$8.90; +0.05; no options): Play Date: 06/01/2002
http://biz/yahoo.com/p/l/lrw.html
STATUS: Trading range/test of 50 day MVA. Three consecutive dojis and looking for a breakout. LRW is still working its way out of a long base, but it made an important break over resistance at 6 in March. It climbed the 18 day MVA after the breakout, making 4 runs and topping out at 9 before returning to test the 50 day (8.16). After jumping off that level last week, LRW has pulled laterally with the dojis. We could still see an intraday test of the short-term MVA's (8.60), but are looking for the breakout. Relative strength has broken out, and money flow continues to move higher. Temporary staffing benefits first in the hiring arena during economic recoveries.
Volume: 149.5K Avg Volume: 243K
BUY POINT: $9.25 Volume=360K Target=$12 Stop=$7.90
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/lrw.html
NX (Quanex--$37.75; +0.80; no options): Play Date: 06/01/2002
http://biz/yahoo.com/p/n/nx.html
STATUS: 50 day MVA bounce. Holding up after the strong bounce Friday and Monday. It rested a bit Tuesday as the market retreated, but volume was much lighter on the selling and it pulled back up today with volume returning to strong levels. NX broke out of a long, long base in March on that tariff nonsense and ran to a new high. Since that breakout it ran up the 18 day MVA, making the usual four bounces up off of that level, topping off at 38 on the move. A pullback from that move set up the 50 day test and bounce. Accumulation has been very good, with strong buying and money flow zooming up. Stronger economic recovery means more iron and steel use and the U.S. market is now protected to a certain extent.
Volume: 203.6K Avg Volume: 101.7K
BUY POINT: Still a buy on a move over 38 Volume=150K Target=$43.8 Stop=$35.43
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/nx.html
OSI (Outback Steakhouse-- $39.07; +0.55; optionable): Play Date: 05/29/2002
http://biz/yahoo.com/p/o/osi.html
STATUS: Test breakout. An abrupt drop back off of Friday's strong move off of the breakout test. However, it is still holding up on the recent support of the 10 day MVA (38.61), rebounding today on reduced, light volume. Not a great pattern at this point after the drop, but we will see if it can hold up (18 day and prior highs back at 38) to catch its breath and set up a move over the recent highs.
Volume: 330.1K Avg Volume: 499K
BUY POINT: New positions over 39.75 (original buy point at $39.05). Volume=720K Target=$46.94 Stop=$36.32
POSITION: OSI KG - Nov. $35 call, delta 75 and/or stock
http://www.investmenthouse.com/ct/osi.html
PETC (Petco--$25.09; +0.44; no options): Play Date: 06/01/2002
http://biz/yahoo.com/p/p/petc.html
STATUS: Test breakout. We got into PETC early in May but got shaken out when the stock ran below its 50 day MVA, but it abruptly reversed with big volume. Since hitting a high of 26.70 it has pulled back to test the breakout, dipping back on stronger volume Tuesday but holding the 18 day MVA (24.63), from where it bounced today with even stronger volume. Holding at this point was key, and now we are looking for a volume on a continued move. Cats and dogs are big and consumers are not shy about spending money in this economy.
Volume: 415.3K Avg Volume: 271K
BUY POINT: $25.85 Volume=300K Target=$31 Stop=$24.04
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/petc.html
SALM (Salem Communications--$28.94; 0.00; no options): Play Date: 06/03/2002
http://biz/yahoo.com/p/s/salm.html
STATUS: Cup w/handle. Still in the handle of that 10-month cup with handle. Outstanding accumulation with accumulation weeks over distribution weeks 12 to 2. Still a very good handle on very low volume, with a doji on the 10 day MVA today on very, very low volume. Have to be patient and let the breakout occur.
Volume: 10.4K Avg Volume: 65.863K
BUY POINT: $30.17 Volume=100K Target=$36.2 Stop=$27.50
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/salm.html
TEVA (Teva Pharmaceutical-- $65.71; -0.73; optionable): Drugs
http://biz/yahoo.com/p/t/teva.html
STATUS: Cup w/handle. Still in the handle of the 9-month cup, TEVA tested near the 18 day MVA on the low (64.99) and rebounded to close right on the 10 day MVA with a hammer doji. That is a potentially bullish candlestick pattern, and we like that the volume once again fell, remaining below average in the handle. It is important for trade to quiet down in the best of handles, and that is what TEVA is giving us here.
Volume: 477K Avg Volume: 1.012M
BUY POINT: $68.05 Volume=1.5M Target=$80 Stop=$63.29
POSITION: TVQ LM - Dec. 65c (delta 65) and/or stock
http://www.investmenthouse.com/ct/teva.html
XRAY (Dentsply-- $38.48; +0.23; optionable): Play Date: 05/25/2002
http://biz/yahoo.com/p/x/xray.html
STATUS: Ascending wedge. After trying but not making a breakout last week, XRAY has peeled back, and is now trying to hold onto the 50 day MVA (38.25). The ascending wedge pattern is gone, but XRAY is still in business with a hold of the 50 day. We will see if it can hold support and set something up. Stops are just below.
Volume: 355.9K Avg Volume: 331.2K
http://www.investmenthouse.com/ct/xray.html
Downside
AXP (American Express--$41.01; +0.92; optionable): Play Date: 06/04/2002
http://biz/yahoo.com/p/a/axp.html
STATUS: Put/head and shoulders. AXP formed a quick head and shoulders from its top at 45 in mid-May. After breaking below the 50 day MVA Tuesday on strong volume, it rallied Wednesday back toward that level but on once again below average volume. On the high (41.18) it tapped at the 50 day MVA (41.47). This was the test of the breakdown we were looking for. Now we will see if it rolls over for us.
Volume: 4.103M Avg Volume: 4.733M
BUY POINT: $40.90 Volume=650K Target=$37.75 Stop=$42.25
POSITION: AXP VI - Oct. 45 put (delta -62)
http://www.investmenthouse.com/ct/axp.html
CYMI (Cymer-- $40.59; +0.18; optionable): Play Date: 06/03/2002
http://biz/yahoo.com/p/c/cymi.html
STATUS: Put. Tried to reverse Tuesday after hitting the buy point, moving on very high volume. Another doji today on below average volume as the stock still shows major indecisiveness. It could test the 10 day MVA up at 43 before falling further. It is still weak, just starting its downtrend off of its double top. If it does test and fails, we will look at adding to positions.
Volume: 1.171M Avg Volume: 1.443M
BUY POINT: On a test of 43 and a reversal at that level, 41.50 (original buy point at $39.45) Volume=1.4M Target=$33.80. Stop=$44
POSITION: CQG TI - Aug. $45 put (delta -55)
http://www.investmenthouse.com/ct/cymi.html
LZB (Lazy Boy--$27; +0.40; optionable): Play Date: 06/03/2002
http://biz/yahoo.com/p/l/lzb.html
STATUS: Put. Tested to 26 Tuesday, but we held off on getting in as the stock rebounded early. Wednesday it rose again, but on very light, below average volume; that is not a strong bounce, and we will look for a bit more of a move up toward the 10 day MVA (27.75) and for it to fail there and reverse. When it does we will jump on it.
Volume: 164.9K Avg Volume: 207K
BUY POINT: After a test of 27.75, $26.95 Volume=300K Target=$23.50 Stop=$29.50
POSITION: LZB SF - July $30 put (delta -68)
http://www.investmenthouse.com/ct/lzb.html
Continuing plays:
We have put all plays in a summary table that contains the date the stock was put on the report (so you can go back and check out the details of the play) and the other pertinent information. This provides more information than the watchlist summaries and still contains comments when appropriate. VIEW THIS IN COURIER NEW, 12 FOR BEST RESULTS. You can also easily print the table from the website (www.investmenthouse.com) from the 'current reports' section. If you just want to print the table you can cut and paste it to a word document setting the font to Courier New size 12. Just left click on the beginning of the table and drag to the table end. After selecting, right click and select 'copy.' Paste into your word processor. Select it all and choose Courier New, font size 12.
Stock Date Play Close +/- Pivot Tgt Vol AvgV Stop
ABF 05/11 BO 22.21 +0.2 22.23 25.75 413K 677K 20.25
Holding on, but not the picture of strength.
ATH 05/16 Test 50 72 +2.7 68.5 75 1.6M 1.2M 63
Now that is more like it: solid move on solid volume.
AXP 06/04 Put 41.01 +0.92 40.9 37.75 4.1M 4.8M 42.25
BGG 05/11 Put 38.03 -0.17 39.4 35 144K 142K 42
Showed a doji at 38; low volume. No move given the market bounce
BL 05/21 cup hdl 22.71 -0.01 23.85 27.5 3K 14K 22
BLC 05/25 Flat 23.95 +0.14 24.25 30 231K 287K 22.55
BRO 04/22 cup hdl 33.61 +0.21 35.63 42.75 230K 331K 32.95
Not much of a recovery, still below the 50 day MVA.
BYBI 05/23 BO 9.85 -0.65 9.7 12.75 55K 45K 9.02
Tested the 18 day MVA on the low. Looks like that should be it.
CCMP 05/20 Put 47.7 +0.31 51 45 674K 1.4M 53.80
A doji tapping the 18 day MVA. Still weak.
CDI 05/11 Pennant 26.9 -0.5 30 34.75 26K 59K 27.90
Holding at the 50 day MVA.
CERN 05/20 A Wedge 52.52 +0.72 56.1 60 204K 466K 53
Moving off the 50 day MVA, but low volume.
CTX 05/11 Put 52.1 +1.91 53.5 49 1.4M 1.2M 56
Up off the 200 day MVA today. Holding.
CVH 06/05 Test BO 32 +2.05 32.6 39 619K 400K 29
CYMI 06/03 Put 40.59 +0.18 39.45 33.8 1.2M 1.4M 44
DVN 05/25 A Wedge 50.01 -1.49 50.95 61 934K 1M 47.38
Did not participate in the rally. Bad sign.
ECL 05/23 cup hdl 46.59 +0.2 47.8 57.36 629K 355K 44.45
ERTS 05/30 Cup 64.1 -0.18 66.12 79.5 2.8M 2.9M 61.49
FSS 05/22 DB hdl 25.39 -0.03 25.8 31 192K 191K 23.99
Still in a nice handle, showing a doji.
FTEK 06/01 A Wedge 6.34 +0.34 6.65 8 9.6K 62K 5.95
HAR 05/13 Test 18 55 +3.05 58.55 64 594K 224K 54.45
Nice recovery to the 50 day on big volume. We waited on it.
HGR 05/20 Test 50 13.65 -0.35 12.6 19 111K 111K 11.72
Didn't participate, testing the 18 day on higher volume.
HI 05/20 Put 52.19 +1.5 53.45 48.5 3.1M 3M 56
Testing the 18 day MVA on lower volume. That is fine.
HLT 05/06 Put 13.6 +0.08 14.3 12 1.2M 2.2M 15.80
Doji on low volume. Not much of a move.
HSIC 05/15 BO 48.81 -0.17 49.4 56.9 197K 339K 46.50
Just hanging out below the 18 day MVA.
HYDL 06/01 cup hdl 25.11 +0.3 27.3 32.75 24K 64K 24.40
IMDC 05/20 Put 32.3 +0.79 29.9 26 107K 207K 32
Tested the 50 day MVA. Not giving us the drop.
IMN 05/25 A Wedge 28.8 -0.23 31.58 38 144K 136K 28.25
Testing the 50 day MVA for the third day.
ITN 05/13 DB hdl 13 +0.02 13 16.5 81K 114K 11.75
A second doji on the 18 day. Looking better.
JBHT 06/01 A Wedge 27.1 +0.49 28.72 36 359K 443K 25.40
KROL 06/06 BO 22.9 +0.9 20.2 24 337K 313K 19.50
Good bounce off the 18 day, but needs more volume.
LRW 06/01 BO 8.9 +0.05 9.25 12 150K 243K 7.90
LZB 06/03 Put 27 +0.4 26.5 23.5 165K 207K 29.50
MERQ 05/28 A Wedge 33.28 -0.53 35.35 39 6.9M 4.5M 32.88
Tested the 200 day w/a doji on very high volume.
NFB 04/13 BO 38.75 +0.27 36.55 43.5 442K 661K 37
Testing the 50 day on below average volume. Not bad.
NX 06/01 Test 50 37.75 +0.8 36.5 43.8 204K 102K 33.94
Good. Back up on very strong volume.
OMX 05/28 Test 18 7.07 +0.17 7.65 11 1.1M 1.4M 6.60
Holding the 50 day MVA.
OSI 05/29 Test BO 39.07 +0.55 39.05 46.94 330K 499K 36.32
PBG 05/30 Test 18 33.15 +0.42 32.75 36 1.3M 1.3M 30.46
Holding the 18 day MVA well.
PCLE 05/06 cup hdl 10.99 +0.67 10.27 13 1M 566K 9.40
Nice. Looks ready for that new high on big volume.
PETC 06/01 Test BO 25.09 +0.44 25.85 31 415K 271K 24.04
QCOM 06/05 Put 32.84 +0.4 31.5 25 11M 14M 33.50
RAH 05/08 Test 18 27.05 -0.06 29.1 35 99K 99K 27.06
Trying ot recovery here at support at 27.
SALM 06/03 cup hdl 28.94 0 30.17 36.2 10K 66K 27.50
SGR 05/11 A Wedge 31.28 +0.68 34.32 40.75 426K 630K 31.92
Back to the 50 day but on lower volume. May have to exit.
TEVA 06/04 cup hdl 65.71 -0.73 68.05 80 477K 1M 63.29
TEVA 05/15 BO 65.71 -0.73 62.1 67 477K 1M 60.50
UVN 05/04 Put 39.4 +0.12 39.95 35.5 784K 1.1M 42
Another doji. Will not break 39.
WFC 03/28 A Wedge 51.05 +0.07 50.85 60.52 5.1M 4M 50
Holding the 50 day MVA on rising volume.
XRAY 05/25 A Wedge 38.48 +0.23 40.35 48.25 356K 331K 37.53
XTO 03/27 A Wedge 19.33 -0.69 20.98 25.98 912K 524K 19.75
Tanked on high volume. May get a relief bounce toward 20.
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.
|
us stock market
trade stock
|
