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trade stock, top stock pick
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. *********** *************
New Pre-Announcement Play:
Play Date: 03/04/2010
CEDC (Central European District--$32.78; +0.19; optionable): Polish liquor sales
http://biz.yahoo.com/p/c/cedc.html
After Hours: $32.59
EARNINGS: 03/01/2010
STATUS: Triangle. This one always amazes us because it consistently hangs in as a leader in the market. It is currently in a 7 week triangle using the 50 day EMA on the lows as support. There is an interesting feature, a positive divergent top. In October it reached a new rally high on lower MACD. In January CEDC rallied to an interim peak and while price was lower than in October, MACD was higher; building strength. We are looking for a break higher from this triangle as the signal to give us the entry.
Volume: 453.941K Avg Volume: 771.738K
VIDEO: http://investmenthouse1.com/ihmedia/CEDC.wmv
BUY POINT: $33.57 Volume=1.1M Target=$39.94 Stop=$31.34
POSITION: CEDC 10F30.00 - June $30c (71 delta) &/or Stock
New Pre-Split Play:
Play Date: 03/04/2010
ARO (Aeropostale--$37.51; +2.30; optionable): Teen apparel stores
http://biz.yahoo.com/p/a/aro.html
After Hours: $37.54
EARNINGS: 03/11/2010
STATUS: Breakaway gap. ARO posted solid same store sales and a 3:2 stock split. The news gapped ARO over the 200 day SMA and out of a 9 week base. In the move it also cleared resistance from last August. Very interesting because ARO gapped lower in early November; this gap up from roughly the same area creates an island reversal that tends to run in the direction of the second gap. This breakaway gap could have triggered a new rally toward the prior highs at 44. We are looking to pick up positions as it continues higher and then look to see if it tests or consolidates as to when we can pick up more positions.
VIDEO: http://investmenthouse1.com/ihmedia/ARO.wmv
Volume: 4.145M Avg Volume: 2.331M
BUY POINT: $37.71 Volume=2.6M Target=$43.91 Stop=$35.92
POSITION: ARO 10G36.00 - July $36c (62 delta) &/or Stock
New Post-Split Plays:
Play Date: 03/04/2010
SYK (Stryker--$54.05; -0.06; optionable): Medical instruments
http://biz.yahoo.com/p/s/syk.html
After Hours: $54.01
EARNINGS: 04/20/2010
STATUS: Cup w/handle. SYK is taking 7 weeks off to consolidate the November to mid-January run, something it does after each leg higher. It tested back to the 50 day EMA and a bit lower, held support in the 50-52 range, then started back to the upside the past week. It is now testing back, forming the handle to the cup, the part where the last sellers get out. From this pullback we look for a break higher on rising trade to give us the signal to move in. Nice tight doji Thursday told us to start watching for that break higher.
VIDEO: http://investmenthouse1.com/ihmedia/SYK.wmv
Volume: 1.256M Avg Volume: 2.024M
BUY POINT: $54.28 Volume=2.4M Target=$62.22 Stop=$52.34
POSITION: SYK 10F50.00 - June $50c (74 delta) &/or Stock
Leader Play:
Play Date: 03/04/2010
CGA (China Green Agriculture Inc.--$15.25; -0.27; optionable): Ag chemicals
http://biz.yahoo.com/p/c/cga.html
After Hours: $15.01
EARNINGS: 05/31/2006
STATUS: CGA is likely setting up a short flag test of the break higher off of the D point in a 4 month ABCD pattern that started back in November. Nice break higher this week, moving through the 50 day EMA and the B point formed in late December. CGA should come back and test back toward the 50 day EMA (14.66) and then continue the move. Now if it does not come all the way back and starts higher from here we can go ahead and enter positions as it has some very good momentum. A relatively new issue with a lot of pop behind it.
VIDEO: http://investmenthouse1.com/ihmedia/CGA.wmv
Volume: 315.588K Avg Volume: 819.675K
BUY POINT: $15.54 Volume=875K Target=$17.98 Stop=$14.45
POSITION: CGA 10F15.00 - June $15c (56 delta) &/or Stock
Downside:
Play Date: 03/04/2010
VSEA (Varian Semiconductor--$31.00; -0.39; optionable): Chip equipment
http://biz.yahoo.com/p/v/vsea.html
After Hours: $30.96
EARNINGS: 04/26/2010
STATUS: ABCD down/head and shoulders. VSEA has formed the familiar head and shoulders pattern spanning November to the present. The pattern is unusually well formed. During the past 10 weeks it has also formed an ABCD downside pattern, rallying this past week to the 50 day EMA, making a higher high over the mid-February peak, but running into resistance at the 50 day EMA. It ran into that level Tuesday and has stalled; after tapping it on the Tuesday and Wednesday highs VSEA gapped to that level Thursday but rolled over and closed negative. Looking for a continued downdraft to move in. A run to our initial target near 28 lands a 40%ish gain. There is some support at 28 but that is also the neckline, and we would anticipate VSEA breaking lower through that level. Thus we will leave some positions open to see if VSEA can make the play down to that next support level and really ramp up the gains.
VIDEO: http://investmenthouse1.com/ihmedia/VSEA.wmv
Volume: 354.623K Avg Volume: 687.9K
BUY POINT: $30.77 Volume=825K Target=$28.04 Stop=$31.84
POSITION: VSEA 10Q35.00 - May $35p (-69 delta)
CONTINUING PLAYS IN POSITION TO MOVE:
Downside:
Play Date: 03/03/2010
CAT (Caterpillar--$58.45; -0.12; optionable): Heavy machinery
http://biz.yahoo.com/p/c/cat.html
After Hours: $58.46
EARNINGS: 04/26/2010
STATUS: ABCD down. Managed to recover off the Thursday lows just over the 10 day EMA. Still like the sluggish action and just being patient to see if CAT has used up its lives on this move. To recap: 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: 6.199M Avg Volume: 8.775M
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--$36.58; -0.34; optionable)
After Hours: $36.95
STATUS: ABCD down. Closed lower Thursday but with very low trade. If KOL continues lower, however, it is worth starting some positions for the run lower. To recap: 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: 359.071K Avg Volume: 607.033K
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--$18.69; -0.12; optionable)
After Hours: $18.64
STATUS: ABCD upside. With the Q's still working laterally, so is QID. Just going to be ready to move in as QID breaks higher. To recap: 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: 11.948M Avg Volume: 15.592M
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--$33.82; -0.15; optionable)
After Hours: $33.73
STATUS: ABCD upside. Same as QID, working laterally in its range. Just being patient to see if the play develops, i.e. SP500 starts to sell off. To recap: 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: 21.739M Avg Volume: 33.557M
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--$17.18; +0.15; optionable): Steel and iron
http://biz.yahoo.com/p/s/stld.html
After Hours: $17.20
EARNINGS: 04/19/2010
STATUS: ABCD downside. Another doji Thursday, closing well off the intraday high as volume edged higher yet. More churn and still in position to rollback over. To recap: 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: 5.565M Avg Volume: 6.499M
BUY POINT: $16.87 Volume=8.5M Target=$14.78 Stop=$17.63
POSITION: STLD 10Q18.00 - May $18p (-57 delta)
Leaders:
Play Date: 03/02/2010
WCRX (Warner Chilcott--$27.05; +0.02; optionable): Drugs
http://biz.yahoo.com/p/w/wcrx.html
After Hours: $27.05
EARNINGS: 08/07/2009
STATUS: Cup. Snugging up against the 50 day EMA. Nice test, setting up the next break higher. To recap: After a short 7 week base consolidating the November to early January run, WCRX looks ready to start to the upside again. Friday WCRX surged, Monday it sold off but note how it rebounded off support at last week's low to close over the 50 day EMA. Monday WCRX was up again. Ready to move in as WCRX continues higher.
VIDEO: http://investmenthouse1.com/ihmedia/WCRX.wmv
Volume: 629.324K Avg Volume: 1.433M
BUY POINT: $27.61 Volume=1.8M Target=$31.94 Stop=$25.68
POSITION: WCRX 10G25.00 - July $25c (72 delta) &/or Stock
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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