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us stock market, stock recommendation
Begin Part 2 of 2
THE PLAYS
Good movers: NX keeps on chugging. PCLE gave a nice breakout. BYBI, but trouble at 11.
Best Plays:
1) FRX: Looks ready to make us some more downside money.
2) CAND: Moving on rising volume.
3) IBC: Took the day off.
4) LZB: Ready to fall again.
5) MDC: Failing at the 50 day MVA.
6) PHTN: Weak.
7) PNR: No volume at resistance.
8) Watchlist: WL, ECL; ITN; KROL; PBG; PETC
NEW PLAYS:
Upside:
PEGA (Pegasystems--$11.27; +0.74; no options): Business software
http://biz/yahoo.com/p/p/pega.html
STATUS: 18 day MVA bounce. PEGA moved off the bottom of its long base in October, periodically testing the 50 day MVA as it moved higher. It is the typical 4 bounces up the 18 day MVA and then test the 50 day MVA you see in a strong uptrend. After testing the 50 day MVA in May and intraday in early June, PEGA has moved back up to the 18 day MVA (10.38) and today bounced up off of that level on some continued strong volume. This stock typically bounces $1.50 on these moves, but as we saw on the last test of the 50 day MVA, it can give $4. We are catching this one on the first real test of the 18 day MVA, so we want to be able to let it work for us and run higher.
Volume: 292.1K Avg Volume: 120.045K
BUY POINT: $11.68 Volume=200K Target=$15.45 Stop=$10.30
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/pega.html
Downside:
FRX (Forest Labs--$70.8; -0.72; optionable): Drugs
http://biz/yahoo.com/p/f/frx.html
STATUS: Put. FRX made us money in May, and it looks to do the same now after a rather weak bounce off the recent lows at 69. It has jumped up to the 18 day MVA over the past two sessions (73.70), testing that level on the high today (as well as the March down trendline) before peeling back to close. Volume has been falling on the recovery attempt, and Monday it was extremely low; not what you want to see for a move back up in a continuing downtrend (at least for upside moves).
Volume: 1.463M Avg Volume: 1.29M
BUY POINT: $72.45 Volume=1M Target=$68 Stop=$75
POSITION: FRX TO - Aug. $75 put (-52 delta) FHA TP - Aug. $80 put (-69 delta)
http://www.investmenthouse.com/ct/frx.html
CONTINUING PLAYS
Upside:
ATH (Anthem-- $72.70; +0.80; optionable): Play Date: 06/08/2002
http://biz/yahoo.com/p/a/ath.html
STATUS: New high breakout. ATH hit the new buy point today, but volume was not with the move, coming in below average. It needs to get some volume behind it to break it out to that new high. Now it did hit a new closing high, but now we want to see it take out 73.40 (intraday high) on some strong, above average volume. Again, with the health care plan sector that is firming up well in the current defensive market posture. Now we are looking for the volume to come into the stock.
Volume: 1.007M Avg Volume: 1.241M
BUY POINT: New positions over 73.40 (buy from weekend $72.25). Volume=1.8M Target=$86.75 Stop=$67.19
POSITION: ATH IN - Sept. 70 call (62 delta) and/or stock
http://www.investmenthouse.com/ct/ath.html
BL (Blair Corp.-- $22.71; -0.07; no options): Play Date: 05/21/2002
http://biz/yahoo.com/p/b/bl.html
STATUS: Cup w/handle (5 month). Patiently waiting for the stock to makes its move out of this tight handle. Monday volume remained strong as BL dipped slightly to close just over the 18 day MVA. Again, there is excellent accumulation in the base with money flow leading the way up and relative strength ready to breakout as well.
Volume: 23.4K Avg Volume: 14.454K
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-- $23.72; -0.29; optionable): Play Date: 05/25/2002
http://biz/yahoo.com/p/b/blc.html
STATUS: Flat base. BLC is getting a bit volatile after the flat consolidation the past two weeks as part of the bigger base. It has bounced around on the 18 day MVA (23.66), today pulling back to that level as volume dipped. Perhaps shaking out the final sellers.
Volume: 220.5K Avg Volume: 281.454K
BUY POINT: $24.25 Volume=342K Target=$30 Stop=$22.55
POSITION: Stock and/or BLC JD - Oct. 20c (delta 85)
http://www.investmenthouse.com/ct/blc.html
CAND (Candies, Inc.-- $5.00; +0.25; no options): Play Date: 06/06/2002
http://biz/yahoo.com/p/c/cand.html
STATUS: Test breakout. Continued back up today with volume again moving back over the average. The move started with a solid Thursday bounce from the 18 day MVA (4.48), visited after its first breakout run. Hit the buy point today before pulling back close. This one has made us money in the past, and it looks ready to do it again.
Volume: 402.4K Avg Volume: 269.363K
BUY POINT: $5.20 Volume=500K Target=$6.95 Stop=$4.40
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/cand.html
ERTS (Electronic Arts-- $63.61; +0.36; optionable): Play Date: 05/30/2002
http://biz/yahoo.com/p/e/erts.html
STATUS: Cup. Held the 18 day MVA at its low today (63) after a wild day Friday saw ERTS test its 50 day (61.13) before recovering. Looks as if ERTS is forming that handle that we were wanting it to form to make a stronger pattern. The stock is very near a new high; some tech stocks are leaders still in the right niche. Friday's move could have shaken out he last sellers and send it higher.
Volume: 2.37M Avg Volume: 2.93M
BUY POINT: 65.10. New high: $66.12 Volume=4M Target=$79.50 Stop=$61.49
POSITION: EZQ IL - Sept. $60 call, delta 67 and/or stock
http://www.investmenthouse.com/ct/erts.html
IBC (Interstate Bakeries-- $28.16; +0.16; optionable): Play Date: 06/08/2002
http://biz/yahoo.com/p/i/ibc.html
STATUS: Testing the breakout. After Friday's bounce up off the 50 day MVA on the test of the breakout from the 8-month flat base in May, IBC took the day off more or less. It moved on lower, slightly below average volume, and it only reached 28.35 on the high before pulling back. After such a ballistic move Friday that is not out of the norm. Now it needs to regroup and deliver the breakout that we are looking for. Great accumulation during the base with accumulation weeks leading distribution weeks 10 to 2. Relative strength has already broken out and money flow remains strong.
Volume: 258.1K Avg Volume: 232.863K
BUY POINT: $28.60 Volume=400K Target=$34.96 Stop=$26.60
POSITION: IBC JE - Oct. $25 call (74 delta) and/or stock
http://www.investmenthouse.com/ct/ibc.html
JBHT (JB Hunt Transportation-- $27.25; +0.30; optionable): Play Date: 06/01/2002
http://biz/yahoo.com/p/j/jbht.html
STATUS: Ascending wedge. Continues to dance near the 50 day MVA in its pattern with a nice comeback Friday and a bit more of a move up today. Volume continued to be light as the recent move has the look of a shakeout. Relative strength is breaking out now and money flow is leading higher with a positive divergence (it is rising while the stock moved sideways; tends to 'pull' the stock up with it). Very solid looking and some great accumulation (accumulation weeks outnumber distribution weeks 7 to 2 in the base).
Volume: 226.9K Avg Volume: 438.227K
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 70 and/or stock
http://www.investmenthouse.com/ct/jbht.html
OSI (Outback Steakhouse-- $39.38; +0.11; optionable): Play Date: 05/29/2002
http://biz/yahoo.com/p/o/osi.html
STATUS: Test breakout. Edging up a bit along the 10 day MVA (38.92), but volume has not moved with the price, remaining below average. It made the breakout just over two weeks ago, and the stock is moving laterally with lows climbing the 10 day. Still looking for another move higher with relative strength leading the way.
Volume: 319.7K Avg Volume: 319.7K
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 74 and/or stock
http://www.investmenthouse.com/ct/osi.html
PCLE (Pinnacle Systems-- $11.74; +0.60; optionable): Play Date: 06/08/2002
http://biz/yahoo.com/p/p/pcle.html
STATUS: Testing breakout. Wasted no time giving us that next buy point today with a solid break to 52-week high on very strong, above average volume. That solid accumulation is paying off. Now we need to see PCLE take out the April 2001 high at 13.60; with this solid upside volume that looks doable though as we know it will rally, rest, rally rest. It is not all a straight shot up but it sure is looking solid.
Volume: 1.746M Avg Volume: 583.681K
BUY POINT: Still a buy on the current move ($11.50 buy point Monday). Volume=850K Target=$19.94 Stop=$10.25. After that we will look for a rest at 13.60 and then a bounce up for the next buy point.
POSITION: PUC JU - Oct. $7.50 call (89 delta) and/or stock
http://www.investmenthouse.com/ct/pcle.html
SALM (Salem Communications-- $29.40; +0.27; no options): Play Date: 06/03/2002
http://biz/yahoo.com/p/s/salm.html
STATUS: Cup w/handle. Dipped to the 18 day MVA Thursday and Friday on the lows (28.40) and recovered both days; very good action in the handle of the 10-month cup with handle as we want to see some lower intraday lows to shake out the last sellers. Today SLM inched up and showed a doji on very low volume. Outstanding accumulation with accumulation weeks over distribution weeks 12 to 2. Again we are being patient to let the breakout occur.
Volume: 4.9K Avg Volume: 66.5K
BUY POINT: $30.17 Volume=100K Target=$36.2 Stop=$27.50
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/salm.html
Downside
LZB (Lazy Boy-- $27.49; +0.54; optionable): Play Date: 06/03/2002
http://biz/yahoo.com/p/l/lzb.html
STATUS: Put. Again tested the 50 day MVA at today's high (27.98), pulling back to close. Volume continued to be strong, though down a bit off of Friday's test and reversal. Given that volume has tried to creep up along with money flow we are going to let the stock break below the recent supporting lows at 25.85 before we take new positions.
Volume: 234K Avg Volume: 234K
BUY POINT: Aggressive: $26.95. Break support: 25.85. Volume=300K Target=$23.50 Stop=$29.50
POSITION: LZB SF - July $30 put (delta -64)
http://www.investmenthouse.com/ct/lzb.html
MDC (MDC Holdings-- $46.20; -1.07; optionable): Play Date: 06/06/2002
http://biz/yahoo.com/p/m/mdc.html
STATUS: Put. MDC hit the buy point Friday and then spent the rest of the session rallying higher to the simple 50 day MVA (47.42) on the close. However, today it could not take out that level, dropping back on lighter volume. The move forms the peak of the right shoulder in a head and shoulders pattern. The breakdown would be at 42.50, but in a weak market we are inclined to take new positions or add to positions on a continued drop from here.
Volume: 188.7K Avg Volume: 190K
BUY POINT: New positions: on a move below 45.50 (Original $44.70) Volume=200K Target=$40.35 Stop=$47
POSITION: MDC SJ - July $50 put (-70 delta) MDC UJ - Sept. $50 put (-59 delta)
http://www.investmenthouse.com/ct/mdc.html
PHTN (Photon Dynamics--$36.45; -0.38; optionable): Chip equipment
http://biz/yahoo.com/p/p/phtn.html
STATUS: Put. Photon crashed through the 200 day MVA last Monday and accelerated the move Tuesday on tremendous volume. It climbed back up the remainder of the week, and after a lighter volume move Friday showed a loose doji today as volume dipped even more. Looking for a drop back from here, although it could still try and tap the 10 day MVA again, at 38, before it rolls back over.
Volume: 280.6K Avg Volume: 526.4K
BUY POINT: $36.25. Volume=650K Target=$32.5 Stop=$39
POSITION: PDU VU - Oct. $40 put (-57 delta)
http://www.investmenthouse.com/ct/phtn.html
PNR (Pentair--$45.77; +0.11; optionable): Machinery
http://biz/yahoo.com/p/p/pnr.html
STATUS: Put. This sector performed well and now is suffering, having broken below the 50 day MVA (46.19) last week and now continuing to test that level, again tapping at its intraday high today. A failure here will form the right shoulder in a head and shoulders pattern. We like to take positions on this pattern as it comes down from the peak of the right shoulder, particularly when that peak is turned back by important resistance such as the 50 day MVA.
Volume: 101.9K Avg Volume: 306.363K
BUY POINT: $44.70 Volume=300K Target=$39.75 Stop=$47
POSITION: PNR TJ - Aug. $50 put (-64 delta)
http://www.investmenthouse.com/ct/pnr.html
QCOM (Qualcom-- $31.49; +0.62; optionable): Play Date: 06/05/2002
http://biz/yahoo.com/p/q/qcom.html
STATUS: Put. Gapped down to 28.71 Friday, well on the way to the target, but reversed and continued up today. However, it pulled back from an intraday high of 32.30 and closed at the short-term MVA's and December 2001 to April 2002 down trendline. We don't think it is going to be successful in its attempt here to break the downtrend, although it could test up to the 50 day MVA again (33) before it gives up.
Volume: 16.85M Avg Volume: 13.66M
BUY POINT: For new positions, 29.70 Volume=15M Target=$25 Stop=$33.50
POSITION: AAW VH - Oct. 40 put (delta -59) or AAW SH - July 40 put (delta --76). Prefer the October.
http://www.investmenthouse.com/ct/qcom.html
WATCHLIST/ CONTINUING:
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 21.9 +0.41 22.23 25.75 448K 677K 20.25
Not a bad 50 day MVA test.
ATH 06/08 BO 72.7 +0.8 72.25 86.75 1M 1.2M 67.19
ATH 05/16 Test 50 72.7 +0.8 68.5 75 1M 1.2M 63
AXP 06/04 Put 39.63 +0.47 40.9 37.75 4.1M 4.7M 42.25
Weak attempt at a recovery.
BGG 05/11 Put 37.89 -0.13 39.4 35 106K 144K 42
Dittol
BL 05/21 cup hdl 22.71 -0.07 23.85 27.5 23K 14K 22
BLC 05/25 Flat 23.72 -0.29 24.25 30 220K 281K 22.55
BYBI 05/23 BO 10.45 +0.81 9.7 12.75 92K 45K 9.02
Ran into 11 on the high and fell back. Big volume.
CAND 06/06 BO 5 +0.25 4.98 6.95 402K 269K 4
CERN 05/20 A Wedge 51.46 +0.54 56.1 60 341K 453K 53
Weak at the 50 day MVA.
CTX 05/11 Put 54.3 -0.33 53.5 49 1.2M 1.2M 56
CVH 06/05 Test BO 33.4 -0.45 32.6 39 702K 419K 29
CYMI 06/03 Put 39.53 +0.41 39.45 33.8 1.3M 1.4M 44
Upped guidance after the close and was up. Expect a gap higher, but we doubt it will hold.
DVN 05/25 A Wedge 48 -1.8 50.95 61 888K 1M 47.38
Heading below the 50 day MVA on below average volume. Not good.
ECL 05/23 cup hdl 46.22 +0.22 47.8 57.36 456K 346K 44.45
ERTS 05/30 Cup 63.61 +0.36 66.12 79.5 2.4M 2.9M 61.49
FRX 06/10 Put 70.8 -0.72 72.45 68 1.5M 1.3M 75
FSS 05/22 DB hdl 25.67 -0.06 25.8 31 115K 189K 23.99
Decent. That is about all you can say.
FTEK 06/01 A Wedge 7.05 -0.15 6.65 8 181K 63K 5.95
Took a breather.
HAR 05/13 Test 18 53.85 -0.5 58.55 64 202K 228K 54.45
Weak at the 50 day MVA. Time to sell and think about a put.
HGR 05/20 Test 50 14.3 +0.56 12.6 19 98K 116K 11.72
HI 05/20 Put 52.59 -0.28 53.45 48.5 2.1M 3M 56
Ready to roll back down it looks like.
HLT 05/06 Put 14 +0.21 14.3 12 1.3M 2.2M 15.80
Testing the 18 day MVA again on some better but still low volume.
HSIC 05/15 BO 49.26 +0.65 49.4 56.9 144K 317K 46.50
IBC 06/08 BO 28.16 +0.16 28.6 34.96 258K 233K 26.6
IMDC 05/20 Put 31.99 +0.31 29.9 26 71K 203K 32
Just won't give it up.
ITN 05/13 DB hdl 12.91 -0.11 13 16.5 46K 112K 11.75
Very good test of the breakout. Volume nice and low.
JBHT 06/01 A Wedge 27.25 +0.3 28.72 36 227K 438K 25.40
KROL 06/06 BO 24.05 +1.3 20.2 24 477K 322K 19.50
LZB 06/03 Put 27.49 +0.54 26.5 23.5 234K 203K 29.50
MDC 06/06 Put 46.2 -1.07 44.7 40.35 189K 190K 47
NFB 04/13 BO 38.56 +0.46 36.55 43.5 364K 655K 37
Recovered over the 50 day, but no volume.
NX 06/01 Test 50 39.62 +0.77 36.5 43.8 298K 98K 33.94
New high on stronger volume!
OSI 05/29 Test BO 39.38 +0.11 39.05 46.94 320K 490K 36.32
Still struggling with 40.
PBG 05/30 Test 18 33 +0.12 32.75 36 740K 1.3M 30.46
Looks ripe for that 18 day MVA bounce.
PCLE 06/08 BO 11.74 +0.6 11.5 19.94 1.7M 584K 10.25
PCLE 05/06 cup hdl 11.74 +0.6 10.27 13 1.7M 584K 9.40
PEGA 06/10 Test 18 11.27 +0.74 11.68 15.45 292K 120K 10.30
PETC 06/01 Test BO 24.96 +0.96 25.85 31 265K 257K 24.04
Solid bounce off 50 day on rising, above average volume.
PHTN 06/08 Put 36.45 -0.38 36.25 32.5 281K 526K 39
PNR 06/08 Put 45.77 +0.11 44.7 39.75 102K 306K 47
QCOM 06/05 Put 31.49 +0.62 31.5 25 17M 14M 33.50
SALM 06/03 cup hdl 29.4 +0.27 30.17 36.2 4.9K 66K 27.50
SGR 05/11 A Wedge 29.67 -0.03 34.32 40.75 374K 620K 31.92
Really trying to hold at 30 where there is some support.
TEVA 06/04 cup hdl 62.8 -0.34 68.05 80 706K 1M 63.29
May finally be ready to bounce. Maybe.
TEVA 05/15 BO 62.8 -0.34 62.1 67 706K 1M 60.50
UVN 05/04 Put 39.05 +0.06 39.95 35.5 1.1M 1.1M 42
XRAY 05/25 A Wedge 38.38 +0.08 40.35 48.25 487K 330K 37.53
Hanging on by its teeth at the 50 day MVA.
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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