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stock recommendation, stock picking
Begin Part 2 of 2
Support and Resistance
Nasdaq: Closed at 1504.74
Resistance: May down trendline at 1502. The 10 day MVA at 1539.86. Then 1550 that held as resistance in recent sessions. The 18 day MVA (1573.91) and 1600. The second March down trendline at 1605. Then the following March to April trendline now at 1641 and the February low at 1700.
Support: 1500 is still fighting to hold. 1460 is some support. 1425 to 1430 is the bottom channel of the May down trendline. Then there is the bottom channel of the May downtrend at 1420. After that is the September low at 1387.06.
S&P 500: Closed at 1007.27
Resistance: Closed at the September 2000/May 2001 down trendline. Then the first March down trendline at 1025 and the 10 day MVA at 1027.74. The 18 day MVA at 1042.06 and 1050 are next followed by 1060 that offers minor resistance from previous prices. The second March/April down trendline at 1055. Then the February lows at 1074.
Support: 1008 is the September 2000/May 2001 down trendline. Below that is the bottom of the March downtrend channel at 1000 to 999. The September low is 944.75.
Dow: Closed at 9474.21
Resistance: 9500 and the March down trendline at 9525. The January and February lows at 9620, followed by the 10 day MVA (9634.71). Then 9750 and the 18 day MVA (9748.61). The April and May lows at 9800 to 9811. The 200 day MVA (9853.04). The September 2000/February 2001 down trendline is at roughly 9940. Then 10,100, followed by 10,250 to 10,300.
Support: Still on the bottom of the shelf of support from 9500 to 10,100. 9250 rose up from nowhere to turn the Dow Friday; possible support there. Then 9000 to 9100. There is a rest stop at 8500. The September low is 8062.
Economic Calendar
6-18-02
CPI, May (8:30): +0.1% expected versus 0.5% prior.
CPI, core (8:30): +0.2% expected versus 0.3% prior.
Housing starts, May (8:30): 1.600M expected versus 1.555M prior.
Building permits, May (8:30): 1.620M expected versus 1.634 prior.
6-20-02
Current account, Q1 (8:30): $-107.5B expected versus -$98.8B prior.
Trade balance, April (8:30): -$32.1B expected versus -$31.6B prior.
Intial jobless claims (8:30): 38kK expected versus 390K prior.
Leading Economic Indicators, May (10:00): 0.2% expected versus -0.4% prior.
Philadelphia Fed, June (12:00): 10.6 expected versus 9.1 prior.
Treasury Budget, May (2:00): -$60,0B expected versus -$27.9B prior.
THE PLAYS
Best Plays:
1) APSG: Nice test of the breakout.
2) CBRL: Ditto.
3) LGND: Ready to fall.
4) MNTR: Ditto.
5) AET: Good pattern
6) ERTS: A very nice cup with handle.
7) PCLE: Looks ready again.
Continuing plays table: FTEK still looks ready to go.
NEW PLAYS:
Upside
APSG (Applied Signal--$11.76; -0.12; no options): Telecom equipment
http://biz/yahoo.com/p/a/apsg.html
STATUS: Testing the breakout. ASPG broke out of a 7-month cup with handle base in late May on some huge volume and has come back to the 10 day MVA (11.70) on very low, below average volume just like you want. During the base accumulation weeks led distribution weeks 8 to 4; very good accumulation. Excellent buying and relative strength has broken out.
Volume: 27.4K Avg Volume: 39.272K
BUY POINT: $12.25 Volume=90K Target=$16 Stop=$11
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/apsg.html
CBRL (CBRL Group--$31.93; -0.02; optionable): Restaurants
http://biz/yahoo.com/p/c/cbrl.html
STATUS: Another test of the breakout. CBRL (Cracker Barrel restaurants) also broke out in late May from its own 4-month cup base. After hitting a high of 34, it has come back to test the 18 day MVA (31.88), showing a doji right on that level Friday. After the breakout and pullback, a doji at this level often indicates the stock is ready to move back up. In this market, successful tests of the breakout are one of the best ways to make upside plays. Accumulation weeks in the base were 5 weeks versus just 2 distribution weeks. Good accumulation and a relative strength breakout as well.
Volume: 387.2K Avg Volume: 940.727K
BUY POINT: $32.50 Volume=1.2M Target=$40.25 Stop=$30.22
POSITION: Stock and/or CBQ IF - Sept. $30 call (68 delta) or CBQ IE - Sept. $25 call (88 delta)
http://www.investmenthouse.com/ct/cbrl.html
SSNC (SSS&C Technologies--$12; -0.13; no options): Application software
http://biz/yahoo.com/p/s/ssnc.html
STATUS: Ascending wedge. SSNC is banging around in a 2-month ascending wedge in the midst of a larger 2.5 year base. In that base 12 marks a resistance level, and a breakout from here could send it to the next level in the base. There has been good ongoing accumulation. Money flow is strong and relative strength is breaking out. Ascending wedges can give strong breakout moves, one of the reasons we like to play them on up trending stocks.
Volume: 26.9K Avg Volume: 63.954K
BUY POINT: $12.65 Volume=80K Target=$16 Stop=$11.50
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/ssnc.html
Downside
CI (Cigna--$98.91; -3.53; optionable): Health care plans
http://biz/yahoo.com/p/c/ci.html
STATUS: Put. In a good sector, but this stock has been undergoing some distribution. It looks like a cup with handle of sorts, but the accumulation is not there and money flow is heading lower. Then Friday the stock suffered a big volume distribution session as it turned a minor breach of the 50 day MVA (103.08) into a tanking. After such a push down you can expect a rebound attempt. We expect the stock to test toward 102 on a reflex bounce and then fall from there. We will look at positions at that point as well as on another breakdown.
Volume: 1.312M Avg Volume: 745.909K
BUY POINT: After a test of 102, 101.45. Breakdown: $99.90 Volume=1M Target=$95.2 Stop=$103.50
POSITION: CI SA - July $105 put (-68 delta)
http://www.investmenthouse.com/ct/ci.html
LGND (Ligand Pharmaceuticals--$14.48; +1.06; optionable): Drugs
http://biz/yahoo.com/p/l/lgnd.html
STATUS: Put. Broke the 200 day MVA (14.92) six sessions back on some strong volume and has not attempted to move up to test that level but on very light volume. There has been some major selling ongoing, and we like the very weak attempt to move up Wednesday through Friday. It will most liked run out of steam at 15, right at the 200 day MVA and prior support that should now act as resistance.
Volume: 285K Avg Volume: 600.318K
BUY POINT: After a test of 15, 14.65. Breakdown: $13.95 Volume=700K Target=$10.05 Stop=$15.35
POSITION: LQP TD - Aug. $20 put (-82 delta)
http://www.investmenthouse.com/ct/lgnd.html
MNTR (Mentor Corp.--$36.14; +1.04; optionable): Medical appliances
http://biz/yahoo.com/p/m/mntr.html
STATUS: Put. A good sector and has enjoyed a solid run, but it made a low volume double top in May and then sliced through the 50 day MVA (37.47). It tried to recover but tanked to 34. It is now trying to recover again but on low volume. Friday it tapped at the 10 day MVA on the high (36.48) and pulled back a bit. We anticipate it will have trouble at this level or at the 50 day MVA. Aggressive play is after a test and a close off the high..
Volume: 104.9K Avg Volume: 114.59K
BUY POINT: 35.90 after a test of 37.50. Breakdown: $35.95 Volume=120K Target=$32.2 Stop=$38
POSITION: MNQ VH - Oct. $40 put (-61 delta)
http://www.investmenthouse.com/ct/mntr.html
CONTINUING PLAYS:
Upside:
Play Date: 06/13/2002
AET (Aetna--$48.90; -0.38; optionable): Health care plans
http://biz/yahoo.com/p/a/aet.html
STATUS: Cup with handle. With the amount they just raised our insurance rates this stock ought to be heading to the moon. This is a shorter base on top of a nice move already, forming right at some resistance at 50. A strong volume breakout over that level is a very nice entry point.
Volume: 1.417M Avg Volume: 1.138M
BUY POINT: $50.35 Volume=1.7M Target=$60 Stop=$46.83
POSITION: Stock and/or AET JI - Oct. $45c (72 delta)
http://www.investmenthouse.com/ct/aet.html
ATH (Anthem-- $71.39; -1.01; optionable): Play Date: 06/08/2002
http://biz/yahoo.com/p/a/ath.html
STATUS: New high breakout. After hitting the buy Tuesday, back down to test the 18 day MVA (70.66) Friday and showing a doji on the rebound. Volume was slightly higher, and it looks like after this little pullback on the market weakness it is ready to head higher again. We will look at picking up some aggressive positions over the early May high (72.30).
Volume: 1.665M Avg Volume: 1.289M
BUY POINT: New positions over 72.30 (prior 72.25 and 73.40). 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
CMPC (Compucom Systems- $3.90; +0.01; no options): Wholesale computers
http://biz/yahoo.com/p/c/cmpc.html
STATUS: Testing the breakout. Still in a nice test, tapping toward the 50 day MVA on Friday's low (3.74) and rebounding to close over the 18 day MVA (3.89) with a nice hammer doji that can indicate a move back up. Volume was even lower on the test; not many sellers here at all. Looks ready for another try. Accumulation weeks outnumbered distribution weeks 12 to 6 in the base; very solid.
Volume: 50.6K Avg Volume: 152.09K
BUY POINT: $4.10 Volume=200K Target=$5.63 Stop=$3.55
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/cmpc.html
ERTS (Electronic Arts-- $62.31; +0.23; optionable): Play Date: 05/30/2002
http://biz/yahoo.com/p/e/erts.html
STATUS: Cup w/handle. Still in the pattern with a test below the 50 day MVA on Friday and a stronger, above average volume recover to close easily above that level (61.35). The pattern is holding up very, very well in the overall market selling. This is not just a good pattern in a deep base; this stock is setting up a good pattern for a breakout to an all-time high. Still has that good accumulation, and it looks to be preparing for the breakout.
Volume: 3.493M Avg Volume: 2.888M
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
JBHT (JB Hunt Transportation-- $28.76; -0.31; optionable): Play Date: 06/01/2002
http://biz/yahoo.com/p/j/jbht.html
STATUS: Ascending wedge. After hitting the breakout point Wednesday and Thursday, JBHT pulled back Friday on some below average volume. It tested the 10 day MVA on the low (27.85) and rebounded sharply to hold up very well. It may come back to test that level a bit more before making a more definitive move to challenge that January high at 29.39
Volume: 367.4K Avg Volume: 435.136K
BUY POINT: A buy up to 30 although we will likely see a rest before that point. Volume=500K Target=$36 Stop=$26.25.
POSITION: JHQ KX - Nov. $25 calls, delta 76 and/or stock
http://www.investmenthouse.com/ct/jbht.html
PCLE (Pinnacle Systems-- $11.45; -0.05; optionable): Play Date: 06/08/2002
http://biz/yahoo.com/p/p/pcle.html
STATUS: Testing breakout. After hitting a buy point Monday, PCLE has also held up well in the overall market selling. Thursday and Friday it held its own, testing toward the 10 day MVA on the lows (11.10), and recovering to show doji's. It remains in very good shape and still a buy on moves over its recent highs at 12..
Volume: 802.5M Avg Volume: 622.363K
BUY POINT: New positions over 12.00 ($11.50 buy point Monday). Volume=1M 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 (84 delta) and/or stock
http://www.investmenthouse.com/ct/pcle.html
SALM (Salem Communications-- $29.44; +0.64; no options): Play Date: 06/03/2002
http://biz/yahoo.com/p/s/salm.html
STATUS: Cup w/handle. Still holding tough at the 18 day MVA (28.70), opening at that level Friday and then moving back up. The volume remains light in the handle as it continues to shake out the last sellers on this low volume. It is a 10-month cup with handle and we like the action thus far. Still you have to wait for the breakout. Excellent buying with accumulation weeks over distribution weeks 12 to 2. Again we are being patient to let the breakout occur.
Volume: 41.4K Avg Volume: 65.136K
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
QCOM (Qualcom-- $29.91; -2.48; optionable): Play Date: 06/05/2002
http://biz/yahoo.com/p/q/qcom.html
STATUS: Put. After rallying back up to the 50 day MVA (32.83), QCOM showed a tombstone doji Wednesday, and then the Sprint news Friday gapped it down to 28.36 on the open. It recovered to 30 on massive volume. Now we will see if it will head back down to the target at 25.
Volume: 41.564M Avg Volume: 13.66M
BUY POINT: Holding current positions. (original buy at $31.5). Volume=1.5M Target=$25 Stop=$33.50
POSITION: AAW SH - July 40 put (delta --76) AAW VH - Oct. 40 put (delta -60)
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 20.1 -0.66 22.23 25.75 861K 655K 20.25
Broke below the 50 day MVA on strong volume. Will look for a test and exit if cannot clear Monday.
AET 06/13 Saucer 48.9 -0.38 50.35 60 1.4M 1.1M 46.83
APSG 06/15 Test BO 11.76 -0.12 12.25 16 27K 39K 11
ATH 06/08 BO 71.39 -1.01 72.25 86.75 1.7M 1.3M 67.19
ATH 05/16 Test 50 71.39 -1.01 68.5 75 1.7M 1.3M 63
BGG 05/11 Put 37.5 -0.43 39.4 35 58K 138K 42
Back down Friday, but on no volume.
BL 05/21 cup hdl 22.9 -0.02 23.85 27.5 6.3K 15K 22
Still in the tight pattern above the 18 day MVA. Waiting . . .
BLC 05/25 Flat 22.9 -0.03 24.25 30 197K 260K 22.55
Never gave the move. Below the 50 day.
BYBI 05/23 BO 10.4 -0.32 9.7 12.75 71K 48K 9.02
Big doji on above average volume Friday that recovered above the 10 day MVA. Still holding up well.
CAND 06/06 BO 4.65 -0.1 4.98 6.95 163K 286K 4
Holding at the 18 day MVA with a shooting star doji. Doing fine.
CBRL 06/15 Test BO 31.93 -0.02 32.5 40.25 387K 941K 30.22
CERN 05/20 A Wedge 49.55 +0.53 56.1 60 228K 457K 53
Trying to hold at 48 but no volume. Time to exit if not already.
CI 06/15 Put 98.91 -3.53 99.9 95.2 1.3M 746K 103.50
CMPC 06/12 Test BO 3.9 +0.01 4.1 5.63 51K 152K 3.55
CTX 05/11 Put 52.17 +0.56 53.5 49 1.6M 1.2M 56
Big volume Friday. Don't like the action and unless it moves lower Monday will close it.
CVH 06/05 Test BO 32.15 0 32.6 39 517K 438K 29
A hammer doji Friday above the 18 day MVA. Good test.
CYMI 06/03 Put 36.05 -0.55 39.45 33.8 1.7M 1.4M 44
Tested low but recovered. Change target to 34.50.
DVN 05/25 A Wedge 47.55 +0.21 50.95 61 1.1M 1M 47.38
Tested 46 and bounced on higher volume. 48 will be tough. If it cannot break over that level Monday or Tuesday, time to exit.
ECL 05/23 cup hdl 45.03 -0.07 47.8 57.36 456K 354K 44.45
Tanked to 44 and bounced sharply. Needs to close over 45.80 Monday.
ERTS 05/30 Cup 62.31 +0.23 66.12 79.5 3.5M 2.9M 61.49
FRX 06/10 Put 72.66 +1.66 72.45 68 1.3M 1.2M 75
Recovered, but stopped at the 18 day MVA, thus still in downtrend.
FSS 05/22 DB hdl 24.81 -0.44 25.8 31 305K 187K 23.99
After looking promising, fell to the 50 day MVA on high volume without the breakout.
FTEK 06/01 A Wedge 6.75 +0.05 6.65 8 51K 59K 5.95
Very nice test of the breakout.
HGR 05/20 Test 50 14.12 -0.2 12.6 19 205K 120K 11.72
Holding up well above the 18 day MVA w/a doji.
HI 05/20 Put 50.8 +0.5 53.45 48.5 4.1M 3M 56
A doji on higher volume, but still closed well off the high.
HLT 05/06 Put 13.28 +0.04 14.3 12 1M 2.1M 15.80
Another doji as it rides down the 10 day MVA.
HSIC 05/15 BO 48.75 +1.12 49.4 56.9 275K 290K 46.50
Nice bounce off the 50 day MVA after testing well below it.
HSY 06/12 Put 64.45 -0.29 65.35 61 471K 500K 67.25
Another doji off of 64. Still trending down, so still holding.
IBC 06/08 BO 27.66 -0.19 28.6 34.96 191K 241K 26.6
Nice test of the 18 day MVA, showing a doji.
IMDC 05/20 Put 31.08 -0.12 29.9 26 92K 204K 32
Just won't give up the ghost. If it does not fall Monday we will think of closing it out.
ITN 05/13 DB hdl 12.3 -0.51 13 16.5 116K 109K 11.75
Fell through the 50 day MVA Friday on rising volume. Time to exit.
JBHT 06/01 A Wedge 28.76 -0.31 28.72 36 367K 456K 25.40
KROL 06/06 BO 23.95 +1.9 20.2 24 994K 332K 19.50
Nice move again, pulling it out of the hat one more time on huge volume!
LGND 06/15 Put 14.48 +1.06 13.95 10.05 285K 600K 15.35
LZB 06/03 Put 26.28 -0.17 26.5 23.5 250K 201K 29.50
Fell a fraction on above average volume. 26 is holding as support.
MDC 06/06 Put 45.2 +0.95 44.7 40.35 153K 185K 47
Rallied Friday, but still below the 18 day MVA.
MNTR 06/15 Put 36.14 +1.04 35.95 32.2 105K 115K 38
MTB 06/11 Put 82.6 +0.69 82.95 77.75 319K 244K 85.60
Bounced Friday on rising volume, but we are still holding.
NFB 04/13 BO 38 +0.7 36.55 43.5 501K 647K 37
Recovered to the 50 day MVA but on low volume. If it cannot break back over this level early this week it is time to sell.
NX 06/01 Test 50 39.95 +0.07 36.5 43.8 341K 101K 33.94
Having a tough time breaking 40. Big volume Friday. Still holding it and looking for the definitive break over 40.
OSI 05/29 Test BO 36.2 -1.32 39.05 46.94 1M 478K 36.32
Tanked below the 50 day MVA on big on big volume. Will look for a test of 37 and exit if it cannot break back over early this week.
PBG 05/30 Test 18 32.42 -0.39 32.75 36 757K 1.2M 30.46
A shakeout? Closed below the 50 day MVA on continued low volume. We will see.
PCLE 06/08 BO 11.45 -0.05 11.5 19.94 802K 651K 10.25
PCLE 05/06 cup hdl 11.45 -0.05 10.27 13 802K 651K 9.40
PEGA 06/10 Test 18 9.11 -1.84 11.68 15.45 330K 129K 10.30
Tanked Friday below the 50 day MVA. Never hit the buy point. Dropping.
PETC 06/01 Test BO 25.3 -0.35 25.85 31 399K 264K 24.04
Reached way down Friday, but recovered to hold above the 10 day MVA. Stronger stocks do that.
PNR 06/08 Put 46.38 +0.17 44.7 39.75 183K 302K 47
Holding at the 50 day MVA. If it does not break back down early this week we will close the play.
QCOM 06/05 Put 29.9 -2.48 31.5 25 42M 14M 33.50
RE 06/11 Put 57.94 +2 58.55 54 875K 569K 63
Big bounce up off of 34 on strong volume.
SALM 06/03 cup hdl 29.44 +0.64 30.17 36.2 41K 65K 27.50
SSNC 06/15 A Wedge 12 -0.13 12.65 16 27K 64K 11.50
TEVA 06/04 cup hdl 64 +0.99 68.05 80 688K 905K 63.29
Nice recovery, but needs more volume.
TEVA 05/15 BO 64 +0.99 62.1 67 688K 905K 60.50
XRAY 05/25 A Wedge 37.98 +1.63 40.35 48.25 634K 334K 37.53
Wow. A huge jump to the 50 day MVA on strong, strong volume. Now we will see if it can hold.
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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stock recommendation
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