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trade stock, stock recommendation
Begin Part 2 of 2
Economic Calendar
7-08-02
Consumer credit, May (2:00): $6.08B expected, $8.8B prior.
7-10-02
Wholesale inventories, May (10:00): +0.1% actual versus -0.4% expected, -0.9% prior (revised from -0.7%.
7-11-02
PPI, June (8:30): 0.0% expected, -0.4% prior.
Core PPI (8:30): 0.1% expected, 0.0% prior.
Initial jobless claims (8:30): 382K prior.
7-12-02
Retail sales, June (8:30): 0.6% expected, -0.9% prior.
Retail ex autos, (8:30): 0.4% expected, -0.4% prior.
Michigan sentiment, preliminary July (9:45): 93.3 expected, 92.4 prior.
SUBSCRIBER QUESTIONS
Q: On yesterday's news on NBR it was stated that the S&P 500 will remove several stock listings and add substitutes to replace them. My question is how is the index calibrated to account for these changes? The to be replaced companies have been in the dumper so to speak and the replacements are relatively more sound and level priced stocks. How do the managers of this index account for the transition?
A: The S&P 500 is market cap weighted. That means those stocks with the largest capitalization have the most impact on the index movements. If you take out a stock whose market capitalization has tanked and replace it with a stock with a larger market cap, the value of the index will rise. What fund managers must do is factor in the market cap of the stocks coming in and those going out and determine what the overall value of the index is and what percentage the new stocks make up of that value. Then the new stocks are bought and positions of stocks already in the index are bought or sold to get the fund inline with the overall index.
THE PLAYS:
Good movers: Puts of course were doing well: LLL; HLT; FRX; ROOM
Wednesday plays:
SLGN: Turned the wrong way, selling down to the 50 day MVA. Volume lighter and still in the pattern.
DNA: Tanked further as expected. After hours beat street by a penny and was higher. Will have to see how this pans out tomorrow.
ABCW: Fell but on lower volume. Still a good test.
BLI: Pulled back but on lower volume still.
Best Plays:
1) CCRN: Looks like more downside.
2) HTLD: Holding up very well and ready for a new high.
3) Watchlist/continuing: HTRN (4 - 0 accumulation since May); INLD
SUBSCRIBER CHOICE
MOT (Motorola--$13.98; -0.62; optionable): Communication equipment
http://biz.yahoo.com/p/m/mot.html
STATUS: Working laterally in a long base ranging from 12.50 to 20 over the past 15 months. Of late MOT has been running from 13.50 to 17, and has sold back near the bottom of the range the past four sessions. It is still in an overall longer term downtrend, but after the selling it looks ready to make a bounce back up toward 16 to 17. This is a move that you can trade if you are nimble and stick to your goals and game plan. Right now it is not in a long term buy position and it is not the leader in its sector.
New Plays:
Upside:
SSRI (Silver Standard Resource--$6.92; +0.24; no options): Silver mining
http://biz.yahoo.com/p/s/ssri.html
STATUS: After a great move up in May that peaked at 7.50, SSRI has pulled back into a short cup and is not rallying up the right side on some very strong volume. This is a needed correction for the stock, and after it is over should continue to move to a new high.
Volume: 1.091M Avg Volume: 750.045K
BUY POINT: $7.21 Volume=1.1M Target=$9.25 Stop=$6.35
POSITION: Stock (no option chain)
http://www.investmenthouse.com/cd/ssri.html
Downside:
CCRN (Cross Country--$32.02; -1.24; optionable): Staffing and outsourcing
http://biz.yahoo.com/p/c/ccrn.html
STATUS: Put. Should be doing well in the improving economy, but is not. It has broke the 50 day MVA (34) as it rolls over making lower and lower highs. There is some support here at 32 where it closed, so we anticipate a bounce up toward that level before it rolls back down. After the bounce we can look at positions on the turn down and then on the break of the support.
Volume: 353.5K Avg Volume: 386.818K
BUY POINT: After a test toward 34, $32.95. Breakdown: 31.95. Volume=400K Target=$28.55 Stop=$35
POSITION: QCK UH - Sept. $40 puts (-47 delta)
http://www.investmenthouse.com/cd/ccrn.html
Revisited:
HTLD (Heartland Express--$22.41; +0.13; optionable): Trucking
Play Date: 07/02/2002
http://biz.yahoo.com/p/h/htld.html
STATUS: Cup w/handle. Still one of the strongest sectors, and the UPS news did not hurt. Showing yet another doji in the pattern as it holds above the 18 day MVA $22.05) on very weak volume. This is very good handle action in a good 4.5 month base. It is ready for a new high, so a breakout means no resistance overhead.
Volume: 80.7K Avg Volume: 237.727K
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
MEMBER PORTFOLIO: CUB, EBAY, HOTT; LOW, NOC, PG, QLGC, RCII, SRCL, WM
Stock Date Play Close +/- Pivot Tgt Vol AvgV Stop
NOC 07/06 Test 50 117.11 -3.93 0 0 2.1M 1.3M 0
Breaking down again below the 50 day MVA on rising volume. Support at 115 so tight for a put here. If it tests the 50 day MVA (121.50) again, it is in play to the downside.
RCII 07/06 Cup 52.75 -0.05 0 0 444K 380K 0
Be careful. Could be ready for a put.
Continuing/Watchlist:
Stock Date Play Close +/- Pivot Tgt Vol AvgV Stop
ABCW 07/09 Test BO 22.94 -0.48 24.12 29 38K 53K 22.35
Pulled back further to 23 but on lower volume.
ABCW 06/20 A Wedge 22.94 -0.48 23.35 27.55 38K 53K 21.65
ACN 05/11 Put 15.25 -1.35 19.7 15.65 7.5M 3.5M 21.30
Tanking and at the target.
AVY 06/22 Put 58.91 -1.19 63.49 59 525K 404K 66
Hit the target.
AXP 05/08 cup hdl 34.83 -1.33 43.53 52 6.3M 4.9M 40.48
AYI 07/05 cup hdl 16.45 -0.65 18.7 22.44 40K 97K 16.95
Broke below the 50 day MVA, but still in the pattern.
BLI 06/11 Test BO 18.1 -0.55 18.5 22 881K 723K 17.30
Sold back but held up pretty well in the market. Still solid.
BWA 06/08 Put 55.19 -1.06 59.99 55 232K 356K 63
Right at the target. On any further selling Thursday we will take profits.
BZH 06/18 Put 74.35 -0.3 75.95 72 692K 516K 81
Tested 73 again and bounced. Another doji; exit on further weakness tomorrow if still in.
BZH 06/03 Put 74.35 -0.3 74.45 70.45 692K 516K 77
CCRN 07/10 Put 32.02 -1.24 32.95 28.55 354K 387K 35
CHGO 05/28 Test 18 9.04 -0.31 7.75 10 211K 255K 7.21
Below the 18 day MVA. Lower volume. Some support at 9.
CHGO 05/09 Test 50 9.04 -0.31 7.3 10 211K 255K 7.02
CHUX 07/03 cup hdl 23.7 -0.32 26.1 31.34 170K 161K 23.95
CLF 05/15 Test BO 26.92 -0.03 28.2 34 31K 81K 26.90
CNI 06/26 cup hdl 50.42 -1.29 52.9 63.25 287K 436K 49.55
COH 06/03 Put 23.2 -1.43 24.82 22.51 1.7M 552K 25.55
Plunging lower to the target. ON further selling tomorrow, take the gains.
CUB 07/06 Cup 19.85 -0.85 0 0 83K 155K 0
DLTR 05/09 Flat 32.91 -0.39 38.95 33 1.7M 1.3M 36.22
Rallied all the way back to the 50 day MVA to give a chance to exit, but it was a very brief trade.
DNA 07/09 Put 25.5 -1.65 26.95 22.95 4.7M 3.3M 30.50
Tanking but beat the street after hours and was up.
DROOY 05/21 A Wedge 4.56 +0.07 4.85 7 3.6M 4.5M 4.30
EBAY 07/02 Test 50 58.83 +1.78 57.95 63 17M 6.1M 57
ELK 06/01 DB hdl 24.75 -1.45 27.46 34.96 110K 101K 24.95
Really ugly, down to the 200 day MVA.
ENC 05/06 Rv H&S 9.1 -0.05 7.3 9.5 40K 38K 6.79
Held up well, taking the day off.
EXAS 06/15 cup hdl 12.91 -0.27 15.3 18.5 141K 132K 12
FDP 06/26 Test 18 25.94 +0.34 27.1 32.5 158K 267K 25.25
Held up well in the carnage.
FDP 05/21 A Wedge 25.94 +0.34 24.75 29.7 158K 267K 23.02
FORG 06/15 Test BO 3.88 -0.8 5.15 6.85 347K 158K 4.20
Fell below the 50 day MVA on rising volume. On a test of 4 exit.
FRX 07/05 Put 66 -4.01 72.45 68 2.5M 1.3M 75
HARB 06/22 BO 24.2 +0.05 24.11 29 72K 53K 21.75
Held up well.
HLT 05/06 Put 12.19 -0.9 14.3 12 4.6M 2M 15.80
Tanked on the put. On a further push lower Thursday, take the gain.
HLYW 05/29 Test 18 18.16 -0.84 19.25 27 1.1M 700K 17.9
Some support at 18, but falling on rising volume below the 50 day MVA.
HOTT 07/06 Test 50 26.22 -0.89 0 0 698K 644K 0
HOTT 06/12 Test BO 26.22 -0.89 27.05 32 698K 644K 24.64
HOTT 05/29 Test BO 26.22 -0.89 26.5 32 698K 644K 24.64
HTLD 07/02 cup hdl 22.41 +0.13 24.19 29 81K 238K 22
INLD 05/18 cup hdl 3.2 0 3.1 4.75 470K 759K 2.50
Looking very good.
IRN 07/08 BO 11.89 +0.14 12.05 14.74 30K 68K 10.45
Moving very well, holding up in a bad market.
IVGN 07/01 Put 28.18 -1.09 28.65 23.55 962K 1.1M 32.55
Sold down, but will probably try to rally on the earnings news in the sector.
KKD 07/05 Put 32.75 +0.05 33.75 29.5 692K 562K 34.50
Not giving the push dow, showing another doji at 32 on rising volume.
KMI 06/19 Put 38.75 -0.67 40.75 37 717K 704K 43.25
Falling again. 38 is a key level it needs to break.
KMI 05/25 Put 38.75 -0.67 44.75 40.25 717K 704K 41.62
LBIX 05/06 Flat 3.15 +0.08 1.95 3.5 210K 124K 1.58
LLL 07/08 Put 44.2 -2.5 48.97 45.25 3.5M 1.5M 52.55
Hit target.
LOW 07/06 Test 50 43.1 -1.55 0 0 5.2M 4.1M 0
MANT 07/03 Cup 23.09 -0.66 24.25 29.25 157K 94K 21.92
Holding up decently.
MDC 07/05 cup hdl 49.9 -0.75 53.21 63.85 339K 199K 49.49
Still holding the pattern though volume is more than we want.
NCC 04/30 cup hdl 31.24 -1.27 31.42 37.25 1.7M 1.2M 29.75
Tanked out of the pattern and below the 50 day MVA.
NCOG 06/22 Put 19.08 +0.2 21.3 18.04 227K 225K 24
Getting close. On a push lower Thursday we will take the gains.
NOC 07/06 Test 50 117.11 -3.93 0 0 2.1M 1.3M 0
NWRE 06/26 cup hdl 12.15 +0.02 11.2 13.55 420K 169K 10.35
Still bucked the market today.
PEET 06/18 A Wedge 15.62 -0.03 18.35 22 207K 241K 16.75
PG 07/05 Put 87.95 +0.05 89.48 85.25 4.9M 3.5M 83.22
Showed a doji at 88; though level to break.
PHLY 07/01 Test BO 39.93 -2.57 46.25 52.25 115K 82K 42.50
Died.
PTEK 07/02 Test BO 5.7 -0.1 5.76 7.99 234K 295K 5.24
Doji at the breakout point.
PTSI 06/24 Flat 25 -0.4 26.65 31.98 25K 60K 24.20
Still moving in the pattern.
QLGC 07/06 Test 18 36.89 -0.62 0 0 12M 11M 0
RCII 07/06 Cup 52.75 -0.05 0 0 444K 380K 0
Be careful. Could be ready for a put.
RITA 05/28 Cup 8.81 +0.06 10.1 13.9 217K 106K 9.39
Sold down from the 50 day MVA again on rising volume but held 8.50.
RML 07/02 Flat 17.42 -0.43 19.37 23.25 80K 144K 18.01
Heading the wrong way without hitting the buy.
ROOM 07/05 Put 42.5 -2.33 44.35 38.85 540K 924K 46.25
SAM 06/12 cup hdl 15.81 +0.01 16.85 20.5 26K 34K 15.45
SIE 06/11 Test 18 19.95 -0.8 21.1 25.45 154K 260K 19.62
SLGN 07/09 A Wedge 38.83 -3.31 43.25 51.95 82K 124K 38.55
SNIC 05/30 A Wedge 8.03 -0.21 8.2 11 193K 324K 6.95
Holding above the 50 day MVA for now.
SNS 04/12 Test BO 14.6 0 14.8 18 60K 111K 13.76
Over the 50 day MVA, but struggling. Might be where we have to exit if cannot get some legs from here.
SNS 04/10 Dbl btm 14.6 0 14.65 18 60K 111K 13.76
SSRI 07/10 Test BO 6.92 +0.24 7.21 9.25 1.1M 750K 6.35
TEN 06/29 BO 7.9 +0.18 6.71 9.35 176K 207K 6.24
Another day of rest on light volume. Good.
TSN 05/22 Test BO 12.98 -0.05 15.15 18 1.2M 1M 14.50
TSN 05/11 Test BO 12.98 -0.05 14.5 17.5 1.2M 1M 13.48
UNP 06/22 Cup 60.95 -0.92 64.9 73 1.1M 1.2M 60.36
Not making the move, selling below the 50 day MVA. Support at 60, but has double topped now.
UNP 06/12 Cup 60.95 -0.92 64.08 73 1.1M 1.2M 61
WM 07/06 Cup 34.63 -1.72 0 0 4.9M 3.5M 0
WTW 05/23 Test BO 40.99 -0.61 43.7 50 484K 311K 40.64
Holding at the 50 day MVA, but making lower and lower highs.
YCC 06/27 Test BO 25.51 -0.85 27.3 32.75 112K 405K 25
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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