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us stock market, stock watch
Begin part 3 of 3
THE PLAYS:
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Each play contains a link to a VIDEO that discusses the play in terms of the CHART PATTERN it is currently showing. Patterns, buy points, and targets are discussed along with other points that make the play a good one as well as what areas to watch for. *********** *************
Downside: Looking downside as the setups are there and we have plenty of upside plays if the market breaks the other way.
Play Date: 03/03/2010
CAT (Caterpillar--$58.57; +0.42; optionable): Heavy machinery
http://biz.yahoo.com/p/c/cat.html
After Hours: $59.06
EARNINGS: 04/26/2010
STATUS: ABCD down. CAT broke to a new rally high in early January, clearing a triangle pattern. Looked like a strong break but on the test it could not hold. MACD was divergent on the top . . . Anyway, CAT sold hard to early February. It then started to bounce; that formed the A point. Stepped back up through early March, forming the pattern. Wednesday CAT surged higher on the JOYG earnings news, hitting the top of the prior triangle on the high. It reversed intraday and gave back almost all of the move on rising trade. That tombstone doji has us watching to see if CAT turns back down. A move to the target lands a 43%ish gain. That is a conservative target as the pattern should yield a move down to 51ish. Thus we will take some gain at the initial target as there is some support there, but leave some to run in the event CAT runs out of lives.
VIDEO: http://investmenthouse1.com/ihmedia/CAT.wmv
Volume: 8.834M Avg Volume: 8.798M
BUY POINT: $58.25 Volume=12M Target=$54.36 Stop=$59.11
POSITION: CAT 10Q60.00 - May $60p (-52 delta)
Play Date: 03/03/2010
KOL (Coal ETF--$36.92; +0.47; optionable)
After Hours: $36.95
STATUS: ABCD down. After a strong, long trend up the 50 day EMA ended with a last surge higher to start 2010. Then it sold off sharply in January to February, breaking its uptrend in the biggest correction since June 2009. It then stair-stepped back up. That initial move formed the A point in early February; note the big hammer doji with long wick as it turned. KOL made it to mid-February and turned lower, forming the B point. It turned back up late that month, forming the C point. The rally the past week is setting up the D point, the point where KOL will turn over if the pattern works. Tuesday KOL gapped higher, showing a tombstone doji. Wednesday KOL did the same thing, giving back its intraday high on stronger, above average volume. If KOL gaps lower here, though not too far, that is a good indication it is heading lower off of this tombstone. Ready to move in as it does. A run to the initial target lands a 75%ish gain. Not bad.
VIDEO: http://investmenthouse1.com/ihmedia/KOL.wmv
Volume: 887.491K Avg Volume: 612.669K
BUY POINT: $36.64 Volume=900K Target=$32.55 Stop=$37.62
POSITION: KOL 10P38.00 - Apr. $38p (-51 delta)
Play Date: 03/03/2010
QID (QQQ Proshares UltraShort ETF--$18.81; -0.05; optionable)
After Hours: $18.88
STATUS: ABCD upside. With the QQQQ forming a downside ABCD pattern, its foil, the QID, has formed the opposite pattern. QID rises when QQQQ falls, so we can play the downside as an upside play. The past two sessions as QQQQ showed tombstone/evening star doji, QID has shown hammers (positive after a long selloff). It is trying to form the D point to its pattern. Looking for a strong move higher to show us the selling has returned. A move to our initial target lands a 65%ish gain.
VIDEO: http://investmenthouse1.com/ihmedia/QID.wmv
Volume: 12.989M Avg Volume: 15.591M
BUY POINT: $18.97 Volume=19M Target=$21.55 Stop=$18.48
POSITION: QID 10G18.00 - July $18c (63 delta) &/or Stock
Play Date: 03/03/2010
SDS (UltraShort S&P500 ETF--$33.97; -0.11; optionable)
After Hours: $34.04
STATUS: ABCD upside. SDS is the same as QID, the foil to the SPY. Putting this on in addition to our SPY play as some prefer to play the upside as the downside. As SPY formed a downside ABCD pattern, SDS has formed the upside version. SPY showed a strong selloff then stepped higher through early March, gapping higher to an evening star doji this week. If SPY sells off, SDS will give us the entry. A move to the target lands a 65%ish gain.
VIDEO: http://investmenthouse1.com/ihmedia/SDS.wmv
Volume: 25.835M Avg Volume: 33.767M
BUY POINT: $34.23 Volume=40M Target=$37.78 Stop=$33.46
POSITION: SDS 10F33.00 - June $33c (63 delta) &/or Stock
Play Date: 03/03/2010
STLD (Steel Dynamics--$17.03; +0.21; optionable): Steel and iron
http://biz.yahoo.com/p/s/stld.html
After Hours: $17.03
EARNINGS: 04/19/2010
STATUS: ABCD downside. Sharp, steep selloff from January to early February. When you see a sharp move up or down, start watching to see if an ABCD pattern sets up. STLD rebounded sharply in early February, showing those hammer doji with long tails, rebounding after testing lower. That turned the stock back up and formed the A point. A lower high, then a lower low followed, setting up the B and C points. The rally the past week made a higher high over the B point. Wednesday STLD surged higher but then reversed to give almost all the move back. That action appears to be setting up the D point. Looking to move in as STLD turns back to the downside. A nice little gap lower would be nice. A move to the initial target lands a 57%ish gain.
VIDEO: http://investmenthouse1.com/ihmedia/STLD.wmv
Volume: 5.325M Avg Volume: 6.492M
BUY POINT: $16.87 Volume=8.5M Target=$14.78 Stop=$17.63
POSITION: STLD 10Q18.00 - May $18p (-57 delta)
Good Investing!
Jon L. Johnson and the Stock Split Report Staff.
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 of 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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us stock market
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