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Begin Part 2 of 2
TEAM TRADES
THC: A pre-split play splitting 7/01 that just moved to a high and was back at the 18 day MVA testing that move. Now we don't usually care too much about volume on these plays, but we always look for volume cues. Monday THC pulled back to the 18 day MVA in the fifth day of the pullback. It tapped that level and then moved up off that support on rising, above average volume. That is an indication that some buying support came in at the 18 day MVA, a level that should act as a bounce point when the stock has just recently tested the 50 day MVA and successfully bounced from there.
At about 9:40CT THC was bouncing back up after pulling back to 75.50. We were looking for the first bounce after the initial pullback, and this was it. These are momentum plays and the stock had pulled back just the way we like. We were looking for a $5 to $6 run, a very nice move on a pre-split run; we like to catch these moving off support and bank a $5 or so move. Using options we can consistently make good money on these plays in almost any market. It is icing on the cake that this is in a good sector; indeed, pre-splits are often in good sectors because leading stocks that are having good price performance are the stocks that announce splits. We saw the move up and looked at the August $70 calls to best leverage our way into a position to give us the best gain over a $5 move. The options were trading 7.30 by 7.60. We put in a limit order at 7.50 to see what happened. The stock ran up away from us and stalled at 76.20 where it started down. We debated pulling the order and waiting to see if it fell back again, but we decided the move looked good so we left it in. The fill came on the way down at the limit price. The stock held up at the 75.80 level that was acting as some intraday support. The stock flattened out into a tight range for the next 2 hours and then jumped higher to over 77 on the high. It tailed off to close near 76.50, the options at 7.80 by 8.10. Not a bad start, and now it needs to give us another 3 to 4 points to make our play.
THE PLAYS
Good movers: SSNC; CVH; SSNC; FTEK; BPOP; CERN; INTU. Flying!
NEW PLAYS
Upside
NMHC (National Med Health Card--$12.27; +0.22; no options): Health services
http://biz/yahoo.com/p/n/nmhc.html
STATUS: Cup w/handle. NMHC is in a 5-month cup with handle, and after a strong move up late last week it is easing back on below average volume the past three sessions toward the 10 day MVA (11.75). Accumulation weeks in the pattern outnumber distribution weeks 6 to 2; excellent accumulation. Money flow is out ahead of the price, a positive divergence that we really like to see.
Volume: 7.5K Avg Volume: 29.454K
BUY POINT: $13 Volume=100K Target=$15.6 Stop=$11.90
POSITION: Stock (no option chain)
http://www.investmenthouse.com/cs/nmhc.html
Downside
ATMI (ATMI, Inc.--$24; +0.04; optionable): Chip equipment
http://biz/yahoo.com/p/a/atmi.html
STATUS: Put. Giving the old kiss goodbye after breaching the 200 day MVA (25.64) definitively 6 sessions back. It has rallied off 22 back up to test the 10 day MVA Tuesday on the high (24.87). Tuesday it showed a doji and a close well off of the high on rising volume. After a low volume assent, that is a very clear signal that the rebound is most likely over. There has been some heavy selling, and money flow is in the tank.
Volume: 461.6K Avg Volume: 456.863K
BUY POINT: $23.85 Volume=500K Target=$20.05 Stop=$26
POSITION: ASQ SF - July $30 put (-73 delta) or ASQ UG - Sept. $35 put (-66 delta)
http://www.investmenthouse.com/ct/atmi.html
CONTINUING PLAYS
Upside:
Play Date: 06/13/2002
AET (Aetna--$50.87; +1.03; optionable): Health care plans
http://biz/yahoo.com/p/a/aet.html
STATUS: Cup with handle. Making the move on strong volume. Issued a buy alert today and it still looks ready to go with a strong, above average volume move.
Volume: 2.071M Avg Volume: 1.159M
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
BLC (Belo--$23.8; +0.85; optionable): Newspapers
Play Date: 05/25/2002
http://biz/yahoo.com/p/b/blc.html
STATUS: Received some help from the NYT with its earnings and BLC blasted higher on strong, above average volume after what appears to have been a shakeout on low volume down to support at 23. Looks as if it could make the breakout, but we want to see the volume on the move above the buy point. We would also like to see it going to close above the buy point on good volume so we might wait until later in the session unless the move is a very solid one.
Volume: 396.2K Avg Volume: 252.181K
BUY POINT: $24.25 Volume=342K Target=$30 Stop=$22.55
POSITION: BLC JD - Oct. 20c (delta 91)
http://www.investmenthouse.com/ct/blc.html
ERTS (Electronic Arts--$65.62; +0.41; optionable): Multimedia software
Play Date: 05/30/2002
http://biz/yahoo.com/p/e/erts.html
STATUS: Cup w/handle. Tried to follow Monday's move with the breakout, hitting a high of 66.55. It did not, however, have the volume it needed to continue the move. It looks very ready, but there is ORCL and AAPL to deal with tomorrow, so it may have to take a day or two off before making the big move.
Volume: 2.334M Avg Volume: 2.931M
BUY POINT: Additional positions: from here to 66.12 (original 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
Downside
CI (Cigna--$102.92; +0.77; optionable): Health care plans
Play Date: 06/15/2002
http://biz/yahoo.com/p/c/ci.html
STATUS: Put. All right, it tried to move up a bit more to close right at the 50 day MVA, again on lower, below average volume. After the big knife lower Friday on strong volume the rebound on lower volume is going to plan. Now we want to see it turn down, but we want to see the volume swell. This is a decent sector, and it could have put in a double bottom. It will let us know, however, because if it is a double bottom it will clear the 50 day MVA and go about its merry way. Otherwise it falls on rising volume and we enter.
Volume: 599K Avg Volume: 756.318K
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
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 19.95 -0.53 22.23 25.75 649K 665K 20.25
Holding steady at support at 20 with a rising star doji on rising volume.
ACF 06/17 Put 28.45 -0.93 29.2 25.2 1.3M 1.9M 33
Looks ready for that continued downside action.
AET 06/13 Saucer 50.87 +1.03 50.35 60 2.1M 1.2M 46.83
APSG 06/15 Test BO 11.55 -0.45 12.25 16 64K 39K 11
Another test of the 18 day MVA, but on rising volume. Needs to be the turn here for us to get in.
ATH 06/08 BO 73.75 +0.25 72.25 86.75 1M 1.3M 67.19
ATH 05/16 Test 50 73.75 +0.25 68.5 75 1M 1.3M 63
ATMI 06/18 Put 24 +0.04 23.85 20.05 462K 457K 26
BL 05/21 cup hdl 22.8 -0.15 23.85 27.5 11K 15K 22
Ahhh. Breakout for goodness sakes.
BLC 05/25 Flat 23.8 +0.85 24.25 30 396K 252K 22.55
BPOP 06/15 cup hdl 33.11 +0.66 32.35 36.5 174K 104K 30.50
Boom. Another big move on even stronger volume.
BYBI 05/23 BO 11.39 +0.87 9.7 12.75 55K 48K 9.02
Nice move on solid volume.
CAND 06/06 BO 4.72 -0.14 4.98 6.95 68K 289K 4
CBRL 06/15 Test BO 33.22 -0.54 32.5 40.25 421K 928K 30.22
CERN 05/20 A Wedge 54.18 +1.81 56.1 60 974K 451K 53
Ralling again on some great volume!
CI 06/15 Put 102.92 +0.77 99.9 95.2 599K 756K 103.50
CMPC 06/12 Test BO 3.88 -0.02 4.1 5.63 50K 152K 3.55
Still hanging in there, but concerned about the AAPL news.
CTX 05/11 Put 55.3 +1.65 53.5 49 1.8M 1.2M 56
Gapped higher on the housing starts news. 56 is resistance and it did show a doji on the gap.
CVH 06/05 Test BO 34.2 +2.74 32.6 39 1.3M 432K 29
CYMI 06/03 Put 39.87 -0.03 39.45 33.8 1.9M 1.4M 44
Tombstone doji at the 18 day MVA on rising volume. It is heading down.
DTC 06/17 cup hdl 11.96 -0.04 12.22 15 22K 63K 11.36
Not quite ready to complete the move today.
DVN 05/25 A Wedge 48.58 -0.24 50.95 61 476K 996K 47.38
Doji at the 50 day MVA on falling volume. Time to exit.
ERTS 05/30 Cup 65.62 +0.41 66.12 79.5 2.3M 2.9M 61.49
FRX 06/10 Put 73.65 -0.95 72.45 68 1.1M 1.2M 75
FSS 05/22 DB hdl 25.46 +0.47 25.8 31 126K 191K 23.99
FTEK 06/12 Test BO 7.15 +0.35 6.92 8.25 286K 59K 6.37
Super move!
FTEK 06/01 A Wedge 7.15 +0.35 6.65 8 286K 59K 5.95
HGR 05/20 Test 50 14.93 +0.16 12.6 19 266K 123K 11.72
HI 05/20 Put 52.75 +0.01 53.45 48.5 2.2M 3M 56
Doji at the 18 day MVA on lower volume once again.
HLT 05/06 Put 13.5 -0.03 14.3 12 1.3M 2M 15.80
HSIC 05/15 BO 49.59 -0.05 49.4 56.9 219K 289K 46.50
Close to busting out of here but needs volume.
HSY 06/12 Put 65.37 -0.2 65.35 61 234K 494K 67.25
Doji at the 18 day MVA on lower volume. Looks ready to drop.
IBC 06/08 BO 28.07 +0.08 28.6 34.96 397K 245K 26.6
IMDC 05/20 Put 30.23 -0.95 29.9 26 143K 205K 32
Bombs away.
INTU 05/30 cup hdl 48.34 +1.44 45 54 6.7M 2.5M 41.85
Wow and wow. More gains, more volume.
ITN 05/13 DB hdl 12.23 -0.25 13 16.5 46K 110K 11.75
Fallen and cannot get up. Ready to sell.
JBHT 06/01 A Wedge 29.71 +0.26 28.72 36 430K 464K 25.40
Still moving up but not a lot of volume help.
KROL 06/06 BO 22.28 -0.42 20.2 24 843K 351K 19.50
Testing the 18 day MVA, but volume has jacked up.
LGND 06/15 Put 14.23 +0.17 13.95 10.05 518K 592K 15.35
LZB 06/03 Put 28.12 +1.17 26.5 23.5 295K 200K 29.50
We are going to have to ditch this one.
MDC 06/06 Put 48.52 +1.77 44.7 40.35 295K 186K 47
This one has reversed on us, crossing the 50 day MVA. Exit.
MNTR 06/15 Put 37.28 -0.24 35.95 32.2 98K 117K 38
Tight doji at the 50 day MVA on no volume. Looks like a fall.
MTB 06/11 Put 86.32 +0.06 82.95 77.75 250K 246K 85.60
A doji on lower volume, but time to exit if it does not fall below 85.50 tomorrow.
NFB 04/13 BO 39.65 +0.17 36.55 43.5 395K 650K 37
NMHC 06/18 cup hdl 12.27 +0.22 13 15.6 7.5K 29K 11.90
NX 06/01 Test 50 40.25 +1.28 36.5 43.8 216K 109K 33.94
Not bad, trying to clear 40.
OSI 05/29 Test BO 37.21 +0.06 39.05 46.94 276K 465K 36.32
Doji at the 50 day MVA on low volume. Time to exit.
PBG 05/30 Test 18 32.77 -0.38 32.75 36 1.3M 1.2M 30.46
PCLE 06/08 BO 11.75 -0.18 11.5 19.94 820K 674K 10.25
PCLE 05/06 cup hdl 11.75 -0.18 10.27 13 820K 674K 9.40
PETC 06/01 Test BO 25 -0.56 25.85 31 118K 273K 24.04
Testing that 18 day MVA on no volume.
PNR 06/08 Put 47.63 -0.27 44.7 39.75 139K 284K 47
Closed well off the high on lower volume. If falls below 46, we stay. If not we exit.
QCOM 06/05 Put 28.88 -0.34 31.5 25 13M 15M 33.50
Nowhere on no volume today. Expect some selling tomorrow.
RE 06/11 Put 60.83 +1.25 58.55 54 1.2M 576K 63
Up over the 18 day MVA on rising volume. If it does not fall below 60 tomorrow we exit.
SALM 06/03 cup hdl 29.63 +0.14 30.17 36.2 43K 65K 27.50
Still in the pattern. Hmmmmm.
SSNC 06/15 A Wedge 13.4 +0.99 12.65 16 310K 64K 11.50
Super breakout!
TEVA 06/04 cup hdl 66 +0.1 68.05 80 643K 877K 63.29
Took the day off on lower volume after some big moves. Okay for now and may test 64, but don't want to see any more backsliding from there.
TEVA 05/15 BO 66 +0.1 62.1 67 643K 877K 60.50
XRAY 05/25 A Wedge 38.11 -0.27 40.35 48.25 331K 337K 37.53
May be out of gas at the 50 day MVA after a good push to get back there.
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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