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Begin Part 2 of 2
Support and Resistance
Nasdaq: Closed at 1357.82
Resistance: The September low at 1423 might act as resistance. Then the March down trendline at 1393 and the long term up trendline from 1991 at 1405. Then the 10 day MVA (1440) and the 18 day MVA (1476.39). After that is 1500 and the May low (1560.29). The second March down trendline is at1551.
Support: The March downtrend bottom channel line at 1355. The September low at 1387.06. 1357.09 is the October 1998 bear market low.
S&P 500: Closed at 948.09
Resistance: The bottom channel of the March down trendline (968). The 10 day MVA (984.05) and the September 2000/May 2001 down trendline at 992. Then the March down trendline is at 1000, backed up immediately by the 18 day MVA at 1000.40. The second March down trendline at 1030. The May low at 1048.96. 1060 offers minor resistance from previous prices. Then the February lows at 1074.
Support: The September intraday low is 944.75. 923.32 is the October 1998 bear market low.
Dow: Closed at 9007.75
Resistance: 9100 is some resistance from the October consolidation off the September low. Then 9250 represents some resistance from some intraday and closing prices as well as the 10 day MVA (9239.83). That is immediately followed by the March down trendline at 9320. The 18 day MVA is next (9378.43). 9500 is some resistance, followed by the 18 day MVA (9378.43). Then a jump to 9750 and the April and May lows at 9800 to 9811.
Support: 9000 is the November low off of the first rally from the September low. The bottom channel of the March downtrend at 8950. There is a rest stop at 8500. The September closing low is 8235.81 and the intraday low is 8062.
Economic Calendar
7-01-02
ISM Index, June (10:00): 56.2 actual versus 55.5 expected and 55.7 prior.
Construction spending, May (10:00): -0.7% actual versus 0.3% expected and 0.4% prior (revised from 0.2%).
7-03-02
Initial jobless claims (8:30): 385K expected, 388K prior.
ISM services, June (10:00): 58.2 expected, 60.1 prior.
Factory orders, May (10:00): 0.6% expected, 0.4% prior.
Auto sales, June: 6.1M expected, 5.7M prior.
Truck sales, June: 7.2M expected, 6.8M prior.
7-05-02
Non-farm payrolls, June (8:30): 60K exected, 41K prior.
Unemployment, June (8:30): 5.9% expected, 5.8% prior.
Average workweek, June, (8:30): 34.3 expected, 34.2 prior.
Hourly earnings, June (8:30): 0.3% expected, 0.2% prior.
THE PLAYS:
We anticipate that attempted move up. Just as well, many of the puts are extended though there are a few that are still in position to move lower. We are thus looking at some of the upside that held up well in the recent selling as these stronger stocks weathered the selling storm and tend to display good moves when the bounces come. That is how they give us returns; they hold up when the market sells, then they rally to new gains when the market rallies.
Good movers on Tuesday: AVY; NVLS; GILD; TKTX; WYE; LTR. A veritable downside bonanza.
Tuesday plays:
PHLY: Sold the 50 day MVA. Volume was lower but it is now out of the nice handle.
IVGN: Started lower but rallied a bit. We held off on the alert.
USPI: Continued the tanking.
Best Plays:
1) IVGN: Ready to fall.
2) USPI: Reversed on us.
3) Continuing stocks shaping up: ELK; CNI
New Plays
Upside:
HTLD (Heartland Express--$22.61; -0.20; optionable): Trucking
http://biz.yahoo.com/p/h/htld.html
STATUS: Cup w/handle. Moving in a 4-month cup with handle base, now forming the handle and preparing for a new high. Trucking moves the goods that the recovering economy is sputtering and spitting out. Someone has to move the Ding Dongs to the store. Accumulation is very solid at 6 accumulation weeks to just 2 distribution weeks. We want to add this one and let it truck higher for us (yes, yes, very weak humor attempt).
Volume: 209.8K Avg Volume: 244.863K
BUY POINT: $24.19 Volume=370K Target=$29 Stop=$22
POSITION: QHK LW - Dec. $17.50 c (87 delta) and/or stock
http://www.investmenthouse.com/cd/htld.html
PTEK (PTEK Holdings--$5.61; 0.00; optionable): Communications services
http://biz.yahoo.com/p/p/ptek.html
STATUS: Testing the breakout to a 2- year high. This one is, well, way down in its base, after hitting a high of 50 way back in 1996. It has been trending lower since then until the September when it started to recover. PTEK broke out of a 2-month flat base in late June, and is now testing that move, tapping the 18 day MVA on Monday's low and bouncing higher today. Volume the past two sessions has tapered off. In this small base accumulation weeks lead distribution weeks 4 to 1. Great accumulation, and money flow is still out ahead of the price, meaning potentially that the price has not priced in all of the ongoing buying. This is not one we look at to hold forever, but we could hold it to 8 and get us a 38% or so return.
Volume: 231.7K Avg Volume: 291.409K
BUY POINT: $5.76 Volume=325K Target=$7.99 Stop=$5.24
POSITION: QTE AA - Jan. $5 c (61 delta) and/or stock
http://www.investmenthouse.com/cd/ptek.html
RML (Russell Corp.--$18.53; -0.42; optionable): Athletic clothing
http://biz.yahoo.com/p/r/rml.html
STATUS: Flat base. Moving in a flat base for the past 3 months showing good price/volume action with accumulation weeks leading distribution weeks 3 to 1. RML tried to make a move Friday in the last hurrah of that little bounce rally, but it has now pulled back with the market on very low volume. Its pullback has been a breather as opposed to a wreck as with many other stocks. Again, the leaders use the pullbacks to consolidate a bit, and RML looks ready to move higher with the next upturn.
Volume: 73.1K Avg Volume: 161.5K
BUY POINT: $19.37 Volume=245K Target=$23.25 Stop=$18.01
POSITION: RML JW - Oct. $17.50 c (97 delta) and/or stock http://www.investmenthouse.com/cd/rml.html
PORTFOLIOS: Due to subscriber requests, we are merging the portfolios into one Member Portfolio controlled by the subscribers with periodic surveys on the stocks desired. We had a big response over the weekend and will be putting the new Member Portfolio together soon. If you have not done so, get your choices in now.
MEMBER PORTFOLIO: We have tallied most of the votes, and the following are the current leaders. We are still compiling the additional votes coming in.
EBAY, HOTT; LOW, NOC, PG, QLGC, RCII, SRCL, WM
EBAY (57.68; -0.88): Feel like a trading play? EBAY is in a 7-month cup with what looks to be a handle forming in the lat half of June. It was a pretty steep handle, and volume was a bit more than we wanted (it should be nice and quiet in the handle). The past two sessions it has sold down with the market, Tuesday testing the 200 day MVA on the close. Volume jumped up to above average levels on the test. That is good as it shows there is some support coming in. While the pattern is a little choppy we are looking to at a trading play up to the 62 to 64 level. It can be with stock or with options. On shorter term trades on more expensive stocks we like options. We are looking at August $50 calls (QXB HJ; 78 delta; a bit too short of time for us) or October $50 (QXB JJ; 74 delta; more time but $2 more, not bad given the 2 extra months).
Stock Date Play Close +/- Pivot Tgt Vol AvgV Stop
$OEX 06/29 Put 22.11 -0.89 488.95 473 154K 0 502
Hit the target.
ABCW 06/20 A Wedge 23.6 -0.64 23.35 27.55 140K 52K 21.65
Very low volume pullback after the big move.
ACN 05/11 Put 16.9 +0.15 19.7 15.65 5.3M 3.4M 21.30
A doji on the action on continued above average volume. Looks to be trying a move higher.
AVY 06/22 Put 60.87 -1.74 63.49 59 586K 410K 66
Major plunge, but held above 60 on the low. Riding positions still.
AXP 05/08 cup hdl 36.83 -0.2 43.53 52 7.9M 4.9M 40.48
BLI 06/11 Test BO 18.11 -0.91 18.5 22 1.1M 681K 17.30
Falling on continued above average volume, breaking below the 18 day MVA. Support at 18 that needs to hold.
BWA 06/08 Put 58.22 -0.56 59.99 55 446K 351K 63
Looks ready to roll over again, but cautious of any rally.
BZH 06/18 Put 76.9 -2.62 75.95 72 580K 519K 81
Rolled over big time at the 50 day MVA on rising, above average volume.
BZH 06/03 Put 76.9 -2.62 74.45 70.45 580K 519K 77
CEPH 06/25 Put 38.76 -2.93 43.2 38 2.9M 2.2M 49.50
Falling like a stone. Near the target.
CHGO 05/28 Test 18 10.2 +0.49 7.75 10 306K 285K 7.21
Up again but on lower volume.
CHGO 05/09 Test 50 10.2 +0.49 7.3 10 306K 285K 7.02
CLF 05/15 Test BO 26.55 -0.82 28.2 34 27K 82K 26.90
Lower volume test of the 50 day MVA.
CNI 06/26 cup hdl 51.17 -0.98 52.9 63.25 563K 434K 49.55
Messing up the handle, falling to the 18 day MVA on rising, above average volume.
CNTE 06/27 cup hdl 26.67 -1.83 30.2 36.25 183K 137K 28.09
Tanked to the 50 day MVA after the breakout attempt. Held above the 50 day MVA as volume rose a bit. Needs to hold here. Health care plans are undergoing a correction, but we feel they will resume.
COH 06/03 Put 51.16 -1.54 49.65 45 514K 520K 52
Touched 50 on the low and rebounded a bit, still a solid move down on rising volume. Holding positions for now.
DESI 05/29 Test 18 6.06 -0.15 7.25 11 53K 136K 6.74
Below the 50 day MVA but holding at some support at 6. Needs to get back over the 50 day MVA at 6.50.
DGX 01/31 cup hdl 75.01 -5.59 68.9 100 4.2M 1M 84
Slaughtered to the 200 day MVA on massive volume. This is why we closed out the position back in May at 89.
DLTR 05/09 Flat 36.47 -0.59 38.95 33 1.8M 1.2M 36.22
Below the 50 day MVA for second straight day. Needs to move over 37.25 tomorrow or we will have to consider exiting.
DROOY 05/21 A Wedge 3.78 -0.32 4.85 7 5.2M 4.5M 4.30
Gold stocks continue to suffer. Holding where it tapped in June before it started to rally again.
ELK 06/01 DB hdl 27.24 -0.69 27.46 34.96 158K 101K 24.95
Very good action in the handle, but volume moved up Tuesday on the selling just as it did Friday. Needs to hold at 27 on the close on any further testing.
ENC 05/06 Rv H&S 8.78 -0.16 7.3 9.5 65K 36K 6.79
Very steady action in a bad market. Volume spiked higher as it works to get over 9.
EXAS 06/15 cup hdl 13.97 -1.24 15.3 18.5 159K 128K 12
Sold sharply through the 18 day MVA on average volume. Looks like another breakout reversal. If it does not bounce we look to exit Wednesday and avoid the holiday rush.
FDP 06/26 Test 18 25.08 -0.07 27.1 32.5 161K 261K 25.25
Holding with another doji above the 50 day MVA on below average volume.
FDP 05/21 A Wedge 25.08 -0.07 24.75 29.7 161K 261K 23.02
FHCC 06/11 cup hdl 26.77 -0.18 29.85 36 846K 943K 27.76
Holding at some support at 27, testing 26 on the low. Needs to recover to 28. If it tries and fails, we will exit.
FORG 06/15 Test BO 4.81 -0.09 5.15 6.85 190K 148K 4.20
Very nice test of the 18 day MVA. Looks ready to resume the upward move.
FRX 06/10 Put 69.02 +0.35 72.45 68 3.5M 1.3M 75
Bounced on some massive volume off of 66.45. Tested the 10 day MVA on the high and fell back. Will still have some trouble with that level.
GILD 06/15 Put 27.92 -2.38 32.49 28.25 7.2M 3.6M 34.50
Tanked and hit the target.
HARB 06/22 BO 23.86 -0.54 24.11 29 58K 51K 21.75
Held well after the recovery with volume falling off hard.
HLT 05/06 Put 12.96 -0.63 14.3 12 2.5M 1.9M 15.80
Ah. Finally following the path lower on higher volume.
HLYW 05/29 Test 18 18.68 -1.47 19.25 27 1.3M 731K 17.9
Breaking down in the pattern on rising, above average volume. Broke below the 50 day MVA. There is some support at 18, but this louses up a good pattern.
HOTT 06/12 Test BO 24.85 -0.8 27.05 32 557K 700K 24.64
Continued to sell, falling below the 50 day MVA. 25 is last support and it needs to recover over 25.50 tomorrow.
HOTT 05/29 Test BO 24.85 -0.8 26.5 32 557K 700K 24.64
HTLD 07/02 cup hdl 22.61 -0.2 24.19 29 210K 245K 22
IMH 03/26 A Wedge 11.93 -0.25 8.95 11.2 2M 434K 9.50
IVGN 07/01 Put 29.4 +0.57 28.65 23.55 1.7M 1.1M 32.55
KMI 06/19 Put 37.6 -0.7 40.75 37 603K 707K 43.25
Continuing lower and closing in on the target.
KMI 05/25 Put 37.6 -0.7 44.75 40.25 603K 707K 41.62
LBIX 05/06 Flat 2.75 -0.28 1.95 3.5 165K 117K 1.58
Turned over with the doji's Friday and Monday, then broke the 10 day MVA today on above average volume. Holding up decently, but cannot close below 2.60.
LLL 06/10 Put 51.48 -0.7 59.1 54 1.7M 1.5M 62.50
LTR 06/15 Put 51.37 -1.85 54.95 50.25 806K 483K 57
Bombs away. Falling on very strong volume. Looking to take the gains early tomorrow.
MBAY 06/25 Dbl btm 4.6 0 5.25 8 150K 162K 4.45
Nice doji on the 50 day MVA on rising volume.
NCC 04/30 cup hdl 32.47 -0.29 31.42 37.25 1.5M 1.1M 29.75
Holding well above the 50 day MVA on this pullback.
NCOG 06/22 Put 20.7 -0.62 21.3 18.04 232K 216K 24
Tanking lower on rising volume.
NVLS 06/27 Put 28.97 -3.16 34.95 29.75 14M 9.3M 38
Hit target.
NWRE 06/26 cup hdl 10.77 -1.1 11.2 13.55 332K 157K 10.35
Not good. Reversing on stronger volume. If it cannot hold at 10.35 we exit.
ORB 06/04 cup hdl 7.28 -0.27 8.02 11.94 333K 341K 7.25
Selling back but holding up well. Did not hit the buy but we need to keep an eye on it.
PEET 06/18 A Wedge 16.41 -0.24 18.35 22 312K 241K 16.75
Testing the 50 day MVA with a doji on above average volume. Think it could hold here.
PHLY 07/01 Test BO 43.28 -2.12 46.25 52.25 71K 87K 42.50
Wrong way.
PTEK 07/02 Test BO 5.61 0 5.76 7.99 232K 291K 5.24
PTSI 06/24 Flat 25.6 +0.64 26.65 31.98 68K 62K 24.20
Holding very well above the 50 day MVA with a good recovery after Friday's hiccup.
RE 06/11 Put 53.22 -1.62 58.55 54 556K 577K 63
Hit the target.
RITA 05/28 Cup 9.23 -0.54 10.1 13.9 66K 106K 9.39
Back to the 50 day MVA but on low volume. Holding up well enough, but it needs to hold here.
RML 07/02 Flat 18.53 -0.42 19.37 23.25 73K 162K 18.01
SAM 06/12 cup hdl 15.73 -0.17 16.85 20.5 12K 36K 15.45
Holding up on very light volume at the 50 day MVA.
SIE 06/11 Test 18 20.1 -1.7 21.1 25.45 318K 256K 19.62
Tested the 50 day MVA on rising volume then rallied up. Not a good development, but still holding the breakout for now.
SNIC 05/30 A Wedge 7.34 -0.68 8.2 11 448K 316K 6.95
Crashed on rising volume. Look for a test of 7.75 to exit.
SNS 04/12 Test BO 14.01 -0.84 14.8 18 173K 109K 13.76
Just too volatile, tanking again below the 50 day MVA on volume. Exit.
SNS 04/10 Dbl btm 14.01 -0.84 14.65 18 173K 109K 13.76
SRCL 06/22 Test BO 34.05 -1.44 38.5 45 801K 346K 35.8
Not doing it.
STT 05/20 Put 43.42 -0.68 47.35 42.5 1.7M 1.5M 51.50
Moving down again after a test of the 18 day MVA.
TEN 06/29 BO 6.91 +0.04 6.71 9.35 201K 198K 6.24
Holding the breakout on average volume. Waiting for a test of 6.50, but may not do it.
TKTX 06/29 Put 32 -1.59 35.31 31.25 664K 410K 32.84
Falling on sharply higher volume. Hit the target.
TSN 05/22 Test BO 13.79 -1.39 15.15 18 3.7M 980K 14.50
Gapped down and sold below the 50 day MVA on massive volume. A great gain wiped out in a session in this market. Looking for a test of 14.50 at eh 50 day MVA for an exit point.
TSN 05/11 Test BO 13.79 -1.39 14.5 17.5 3.7M 980K 13.48
UNP 06/22 Cup 63.39 -1.22 64.9 73 1.3M 1.2M 60.36
Down on the session after the good move, but on slightly rising volume. Holding at the 10 day MVA on the close.
UNP 06/12 Cup 63.39 -1.22 64.08 73 1.3M 1.2M 61
USPH 06/19 cup hdl 19.56 -0.39 20.05 25 128K 102K 18.65
Holding up well, closing at the 18 day MVA on slightly rising, above average volume. Careful.
USPH 06/08 Flat 19.56 -0.39 19.1 24.85 128K 102K 17.25
USPI 07/01 Put 25.95 -1.59 27.19 23.05 708K 379K 25.29
WMT 06/17 DB hdl 53.42 -0.98 59.4 73 10M 8.2M 55.24
Stinking it up. Pattern is dead.
WTW 05/23 Test BO 41.99 -0.31 43.7 50 530K 272K 40.64
Holding above the 18 day MVA on the close on lighter volume.
WYE 06/24 Put 48.69 -1.25 53.25 49.15 5M 4.1M 55
Falling on stronger volume. Looking for 47.25 as a new target.
YCC 06/27 Test BO 25.3 -0.7 27.3 32.75 362K 404K 25
Not making the move we wanted, failing to hit the buy point.
ZNT 05/23 A Wedge 29.63 -1.42 31.6 37.94 55K 38K 30
Over and out. Tried to hold up but just unloaded below the 50 day MVA. Time to exit if we gat any bounce tomorrow.
Good Investing!
Jon L. Johnson and The Daily 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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