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us stock market, trade stock
Begin Part 2 of 3
Economic Calendar
6-25-02
Consumer confidence, June (10:00): 106.4 actual versus 106 expected and 110.3 prior (revosed form 109.8).
Existing home sales, May (10:00): -0.3% (5.75M actual) versus 5.63M expected and 5.79 prior.
FOMC meeting day 1
6-26-02
Durable goods orders, May (8:30): +0.6% actual verus +0.5% expected and +0.4% prior (revised from +0.8%).
New home sales, May (10:00): +8.1% (1.028M) actual versus 915K expected and 951K prior (revised from 915K).
FOMC announcement (2:15): No changes. Final demand growth has 'moderated.'
6-27-02
Initial Claims, 06/22 (08:30):388K actual versus 390K expected and 398K prior (revised from 393K)
GDP-Final, Q1 (08:30):6.1% actual versus 5.6% expected and 6.1% prior (revised from 5.6%)
Chain Deflator-Final, Q1 (08:30):1.2% actual versus 1.0% expected and 1.0% prior.
Help-Wanted Index, May (10:00):45 actual versus NA expected and 47 prior.
FOMC Minutes, 5/7 (14:00)
6-28-02
Personal Income, May (8:30): 0.3% expected versus 0.3% prior.
Persona spending, May (8:30): 0.0% expected versus 0.5% prior.
Michigan sentiment, revised , June (8:45): 90.8 expected versus 90.8 prior.
Chicago PMI, June (10:00): 58.5 expected verus 60.8 prior.
TEAM TRADES
ERTS: In the software sector, but its pattern is one of accumulation, not distribution. It attempted a breakout last week, but it did not have the volume. We waited. It sold to the 50 day MVA, still in the pattern, and rebounded a bit Wednesday. Today it was up and firing. In a volatile session we watched the stock along with many others all session. Toward the close it had tailed off with the market but it held up very well. Then with about ten minutes left in the session it started to rally back. We had been watching volume and it was solid. We were just watching to see if the stock would respond at the close. It started higher and we decided it was time to enter. The options we were looking at had a 20 cent spread. The market has done one thing, it has narrowed the spread in options. The spread was 9.50 by 9.70; with that spread there was no need to really try to shave it, so we put in a limit at the ask. The stock was moving, the volume was good, so we wanted the position. We were not going to haggle over a nickle or a dime. The trade was uneventful. The narrower spread tempts us less to try and shave fractions, and that usually means pretty quick fills. A quick fill as the stock stalled and then moved up sharply. The options closed at 9.90 by 10. Good volume, good price move, good breakout. Now we see if it can give us the gain and thus the profit.
THE PLAYS: CHS announced a split today; the pattern was in trouble, but this may help it out and it may also trigger some more splits in the retail sector. Tonight we add BBBY as a pre-announcement.
We are keeping the plays to the best of the best and have all plays listed in the summary table to make it easy to follow the action for each session as well as our comments on the action. Our goal is get you onto the best plays and to have a report that is very functional for you to use.
BONUS PLAYS:
Downside:
NVLS (Novellus Systems--$34.77; +1.86; optionable): Chip equipment
http://biz.yahoo.com/p/n/nvls.html
STATUS: Put. Has been riding down the 10 day MVA, tanking Wednesday but then reversing and rallying, a move that continued Thursday on lighter though still above average volume. It crossed the 10 day MVA (34.66) in the process. It may rally on up to the 18 day MVA (36.69), but we look for the move to end at that point.
Volume: 11.327M Avg Volume: 9.119M
BUY POINT: After a test of 36.50, 35.95. Breakdown: $34.95. Volume=12M Target=$29.75 Stop=$38
POSITION: NLQ TH - Aug. $40 put (-63 delta) or NLQ TI - Aug. $45 put (-77 delta)
http://www.investmenthouse.com/cs/nvls.html
Upside:
ADS (Alliance Data--$24.73; +0.61; no options): Software
http://biz.yahoo.com/p/a/ads.html
STATUS: Cup with handle. A relatively new issue going through its first real base. It is a good one with accumulation weeks ahead of distribution weeks 4 to 1. Money flow is strong and relative strength is breaking out.
Volume: 148.9K Avg Volume: 105.181K
BUY POINT: $25.3 Volume=160K Target=$30.35 Stop=$23.25
POSITION: Stock (no option chain)
http://www.investmenthouse.com/cs/ads.html
PRE-ANNOUNCEMENT BEST PLAYS
NEW PRE-ANNOUNCEMENT
BBBY (Bed, Bath & Beyond--$37.69; +0.77; optionable): Forecast to announce a split on 7-11-02 in conjunction with a board meeting.
http://biz.yahoo.com/p/b/bbby.html
BACKGROUND: Last announced a 2 for 1 split on 7-13-00 in conjunction with a board meeting. The stock price was $39. Additional shares were authorized at the annual shareholder meeting on 6-28-01. The company thus has sufficient shares for a 2 for 1 split.
STATUS: Reported some excellent earnings a week ago, and that gapped it back over the 50 day MVA. Since then BBBY has rallied on steadily increasing volume, Thursday making the breakout move. Earnings and sales were excellent, showing excellent growth. We may get a test back on this move toward 37. If it continues up we will take some positions. On a test we will let it test and start back up.
Volume: 5.186M Avg Volume: 3.263M
BUY POINT: From here: $37.85. After a test of 37, 37.50. Volume=4.8M Target=$45.45 Stop=$35.25
POSITION: BHQ KG - Nov. 35 call (70 delta) or BHQ KZ - Nov. 32.50 call (80 delta) and/or Stock
http://www.investmenthouse.com/cs/bbby.html
HUG (Hughes Supply--$42.90; +1.38; optionable): Working on another date for this one.
BACKGROUND: Based upon our research it does not appear that HUG has ever split its stock. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/h/hug.html
STATUS: Cup w/handle. Formed a handle, testing below the 18 day MVA Wednesday and starting up Thursday. A good price move but volume was below average. Friday we are going to look for more volume to come in to get the stock moving through our buy point with some authority. There is very good ongoing buying with accumulation weeks lead distribution weeks 4 to 1.
Volume: 132.3K Avg Volume: 169.272K
BUY POINT: $43.09 Volume=250K Target=$52 Stop=$39.50
POSITION: Stock and/or HUG JG - Oct. $35 call (82 delta) or HUG JH - Oct. $30 call (66 delta)
http://www.investmenthouse.com/cs/hug.html
NYT (New York Times--$51.51; +0.91; optionable): Forecast to announce a split in conjunction with a board meeting or on 7-16-02 before the market opens in conjunction with earnings.
http://biz.yahoo.com/p/n/nyt.html
BACKGROUND: Last announced a 2 for 1 split on 6-17-98 in conjunction with a board meeting. The stock price was $ (jay I do not have a price) The annual shareholder meeting was on 4-16-02 at which time no additional shares were authorized. The company has sufficient shares for a 2 for1 split.
STATUS: NYT completed the pullback as anticipated, bouncing Wednesday off of 50 and the 18 day MVA on rising, above average volume. Thursday it continued the move on slightly lower though still above average trade. It hit the next buy point on the high, but backed off. We are looking for the stock to move on through with even stronger volume Friday or early next week for the next buy point. Again, this is an add-to position or a point for new positions.
Volume: 880K Avg Volume: 528.045K
BUY POINT: $51.65 Volume=600K Target=$61 Stop=$47.80
POSITION: NYT JI - Oct. 45 call
http://www.investmenthouse.com/cs/nyt.html
PRE-SPLITS BEST PLAYS: Remember, we try to grab Pre-Splits as they break out of good patterns or as they start a run right before the split. Not looking for home runs, but looking for those $3 to $4 moves running into the split, watching for topping signs and potential resistance. Not huge money, but it can be very steady. We set our initial stops at the 7-8% range below the purchase price (or just below obvious support), and move them up on a move to preserve our profits.
Upside:
CMC (Commercial Metals--$47.00; -0.47; no options): Splits 2 for 1 on 7-1-02. It will split Monday, but we like this pullback, and economically sensitive stocks have moved well through their split dates.
http://biz.yahoo.com/p/c/cmc.html
STATUS: Testing the breakout. CMC broke out 5 sessions ago, rallied higher, and now is testing the 10 day MVA (46.75) on lower though still above average volume. This looks as if it is going to be a successful test, and we want to let this work for us.
Volume: 75.6K Avg Volume: 54.909K
BUY POINT: $48.05 Volume=84K Target=$57 Stop=$44.69
POSITION: Stock (no option chain)
http://www.investmenthouse.com/cs/cmc.html
COH (Coach--$55.10; +1.90; optionable): Splits 2 for 1 on 7-5-02
http://biz.yahoo.com/p/c/coh.html
STATUS: COH was a play from the weekend but it immediately fell on us, breaking the 50 day MVA. It had reported some great earnings but was struggling. It has now recovered over the 50 day MVA on some strong volume, having formed somewhat of a double bottom pattern. With the split coming next week we see momentum coming back into the stock. We want to capture some of that.
Volume: 636.5K Avg Volume: 503.954K
BUY POINT: $55.51 Volume=500K Target=$60 Stop=$51.62
POSITION: COH HJ - Aug. $50 call (74 delta)
http://www.investmenthouse.com/cs/coh.html
Downside:
MMC (March & McLennan--$95.25; +1.04; optionable): Splits 2 for 1 on 7-01-02
http://biz.yahoo.com/p/m/mmc.html
STATUS: Put. MMC has run right back up to the 18 day MVA, tapping it on the high today (95.95) and then turned back down on stronger volume. The candlestick pattern was a doji. Looks as if MMC is going to turn right back down. We are looking at adding positions here to get better leverage on another drop.
Volume: 1.419M Avg Volume: 979.681K
BUY POINT: $94.70 Volume=1.2M Target=$89 Stop=$97
POSITION: MMC TT - Aug. $100 put (-67 delta)
http://www.investmenthouse.com/cs/mmc.html
CONTINUING CANDIDATES
KLAC (KLA Tencor--$45.14; +1.53; optionable): Chip equipment
http://biz.yahoo.com/p/k/klac.html
STATUS: Put. KLAC has made us some excellent downside money over the past several weeks, and now it has rallied back up toward the 10 day MVA (45.99) showing a doji on the candlestick chart Thursday (a hanging man doji). The stock has ridden down the 10 and 18 day MVA (47.80) the past month, and it looks as if it is going to turn back down.
Volume: 18.16M Avg Volume: 12.863M
BUY POINT: $44.95 Volume=15M Target=$41.5 Stop=$48
POSITION: KCQ TK - Aug. $55 put (-75 delta)
http://www.investmenthouse.com/cs/klac.html
POST-SPLITS BEST PLAYS:
Upside
WTSLA (Wet Seal--$24.9; +1.48; optionable):
http://biz.yahoo.com/p/w/wtsla.html
STATUS: Cup w/handle. WTSLA is starting to make the move after the split. Retail is moving again, particularly smaller specialty retail as the economy shows better numbers again. Very close to the breakout. Volume was good the last three sessions, rising to average and above average levels; that is what you like to see before a breakout.
Volume: 359.4K Avg Volume: 317.909K
BUY POINT: $25.34 Volume=700K Target=$30.75 Stop=$22.85
POSITION: WTQ LD - Dec. $20 call (79 delta)
http://www.investmenthouse.com/cs/wtsla.html
Downside
ATK (Alliant Techsystems--$65.53; +0.53; optionable):
http://biz.yahoo.com/p/a/atk.html
STATUS: Put. Tanked to the 200 day MVA (60.64) after breaking the 50 day MVA, and is now rebounding back toward resistance. It hit the 10 day MVA on the high (67.24) and rolled over. Volume has been lower each of the last two days as the stock rebounded. It is going to head back down.
Volume: 706.5K Avg Volume: 389.636K
BUY POINT: $64.95 Volume=700K Target=$60.25 Stop=$68.50
POSITION: AAM TW - Aug. 73.38 put (-70 delta)
http://www.investmenthouse.com/cs/atk.html
CUB (Cubic Corp.--$24.00; +2.05; optionable):
http://biz.yahoo.com/p/c/cub.html
STATUS: Put. Cub just made us some money on its recent tank. It is now bouncing higher after the selling, but it is still on fairly low volume. It crossed the 10 day MVA (23.85) on the close but has the 18 day MVA (24.69) and the 50 day MVA (25.34) ahead of it. We look for CUB to turn back again for another ride lower.
Volume: 179.7K Avg Volume: 136.772K
BUY POINT: $23.95 Volume=180K Target=$20.25 Stop=$26
POSITION: CUB TF - Aug. $30 puts (-78 delta)
http://www.investmenthouse.com/cs/cub.html
End Part 2 of 3
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us stock market
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