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Begin part 3 of 3
THE PLAYS:
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Each play contains an additional 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. *********** *************
Upside:
Play Date: 06/01/2010
LNCR (Lincare Holdings--$46.66; -0.16; optionable): Home health care services
http://biz.yahoo.com/p/l/lncr.html
After Hours: $46.66
EARNINGS: 07/19/2010
STATUS: One of the stronger momentum stocks right now, LNCR is coming off a strong March to May run, testing the move in May with the rest of the market, but LNCR never broke down. Indeed, LNCR is holding the 50 day EMA, making a short double bottom at that level. Thursday it was up, Friday again (and on strong volume) as LNCR starts to rally pre-split. Tuesday LNCR backed off but held its ground as it did. Nice lateral action, still keeping the upside break intact, taking a short breather. On the 60 minute chart LNCR has formed a small flag pattern, something of a handle to a double bottom spanning early May to late May. As LNCR continues its move upside we are ready to move in.
VIDEO: http://investmenthouse1.com/ihmedia/LNCR.wmv
Volume: 1.008M Avg Volume: 959.105K
BUY POINT: $47.11 Volume=1M Target=$53.95 Stop=$44.94
POSITION: LNCR 10H45.00 - Aug. $45c (64 delta) &/or Stock
Play Date: 06/01/2010
OSIS (OSI Systems--$25.77; -0.44; optionable): Chip equipment
http://biz.yahoo.com/p/o/osis.html
After Hours: $25.77
EARNINGS: 08/23/2010
STATUS: OSIS peaked in January and sold since, but if you look at the weekly chart you see an ABCD upside pattern. The past four weeks OSIS has formed a double bottom w/handle pattern, using the 200 day SMA as support for both bottoms. Nice action here and looking for a break over the 50 day EMA (26.58) that can hold into the close to give us the trigger for the buy and a run back up toward the March peak at 31.50ish.
VIDEO: http://investmenthouse1.com/ihmedia/OSIS.wmv
Volume: 283.513K Avg Volume: 257.568K
BUY POINT: $26.68 Volume=275K Target=$31.55 Stop=$25.48
POSITION: OSIS 10J25.00 - Oct. $25c (58 delta, wide sprd) &/or Stock
Play Date: 06/01/2010
WYNN (Wynn Resorts--$81.53; -2.35; optionable): Resorts and casinos
http://biz.yahoo.com/p/w/wynn.html
After Hours: $82.30
EARNINGS: 07/30/2010
STATUS: ABCD up. You have to like Steve Wynn and his comments regarding what the administration is doing to the country; he quoted Tocqueville the other day re the US republic lasting until the elected realize they can bribe the voters with the voters' own money. How timely. In any event the stock pattern is near term bullish with an ABCD pattern starting in late February. It formed the D point last week and rallied off of that through the 50 day EMA, and is now testing that move, coming back to the 50 day Tuesday to test. Looking for this to hold and make a break upside for a run back up to the pattern highs near 93. That move lands a 55%ish gain on the option play.
VIDEO: http://investmenthouse1.com/ihmedia/WYNN.wmv
Volume: 2.541M Avg Volume: 3.223M
BUY POINT: $82.81 Volume=3.6M Target=$92.94 Stop=$80.48
POSITION: WYNN 10I80.00 - Sept. $80c (59 delta) &/or Stock
Downside:
Play Date: 06/01/2010
AAPL (Apple, Inc.--$260.83; +3.95; optionable)
http://biz.yahoo.com/p/a/aapl.html
After Hours: $261.74
EARNINGS: 04/20/2010
STATUS: Double top. As noted in the Summary and Plays Table, AAPL is still in an uptrend, but it has set up a pretty classic near term downside play: a double top at the 78% Fibonacci retracement. It sold off in the May flash crash, and looking at the closing lows there as the starting point it has twice retraced up to the 78% level and has failed . . . or at least it looks ready to fail a second time as it showed an evening star doji Tuesday after tapping that level. AAPL can still recover after some near term selling and continue its uptrend. We are not condemning it to a selloff, just a correction back to the recent closing low near 239. We are looking to play that move off of this evening star doji. A run to the target lands a 60%ish gain.
VIDEO: http://investmenthouse1.com/ihmedia/AAPL.wmv
Volume: 31.303M Avg Volume: 23.89M
BUY POINT: $259.21 Volume=34M Target=$239.11 Stop=$266.44
POSITION: AAPL 10S260.00 - July $260p (-44 delta)
Play Date: 06/02/2010
WBMD (WebMD Healgh Holdings--$44.53; -1.00; optionable): Web-based medical information
http://biz.yahoo.com/p/w/wbmd.html
After Hours: $44.53
EARNINGS: 07/26/2010
STATUS: Bear flag. Peaked in April as MACD made a lower high and has struggled since, making lower highs and lower lows. Broke through the 50 day EMA just over a week back then rallied last week to test that break. It closed just under the 50 day Friday, then gapped lower and closed at the session low Tuesday. There is an upside gap back in mid-February, and we are looking for WBMD to come back and test that gap. If it continues lower from the Tuesday selling we are ready to move in for a run to the target. That move lands a 47%ish gain.
VIDEO: http://investmenthouse1.com/ihmedia/WBMD.wmv
Volume: 104.717K Avg Volume: 397.7K
BUY POINT: $44.42 Volume=500K Target=$40.36 Stop=$45.94
POSITION: WBMD 10U45.00 - Sept. $45p (-50 delta)
Play Date: 06/02/2010
ZMH (Zimmer Holdings--$54.17; -1.76; optionable): Medical equipment
http://biz.yahoo.com/p/z/zmh.html
After Hours: $54.17
EARNINGS: 07/19/2010
STATUS: Bear flag. You would think that medical appliances would be rather defensive, but ZMH is not acting as if that is the case. It sold below a key support point at 55 a week back and rallied last week to test the break lower. It stalled at the 200 day SMA on the Friday high and then turned to the downside Tuesday on strong, above average volume. Not much for ZMH as support until 50ish; that is our initial target where we will bank some of the 40%ish gain. The real support, however, is down at 47.50ish, and we will let some of our position ride to see if it reaches that level.
VIDEO: http://investmenthouse1.com/ihmedia/ZMH.wmv
Volume: 3.235M Avg Volume: 2.056M
BUY POINT: $54.05 Volume=2.5M Target=$50.46 Stop=$55.48
POSITION: ZMH 10U55.00 - Sept. $55p (-48 delta)
CONTINUING PLAYS READY TO MOVE:
Play Date: 05/24/2010
NVLS (Novellus Systems--$25.31; -0.51; optionable): Chip equipment
http://biz.yahoo.com/p/n/nvls.html
After Hours: $25.31
EARNINGS: 07/21/2010
STATUS: This one ran nicely higher last week out of the double bottom pattern and then paused Friday (though with a nice bounce up from the intraday low). Started this week lower with and finished well off the intraday highs, but really just giving a short test back for us. This gives us a better entry, so we see how it holds now at the 18 day, or a little lower at the 50 day, and buy it with the bounce back up. To recap: NVLS looks promising here with strong upside volume kicking in at an important support level that has held many times over the past decade. Of course it didn't hold in the 2008 bear market, but it has recovered the level and is acting as if it does not want to let it go. After a rally from February through late April, NVLS tested back with the market, but during the May twin dips it has tested back to the 61% Fibonacci retracement level, forming a double bottom at that point. Something of a head and shoulders from late March, but with the longer term support and the double bottom at the Fibonacci retracement level as well as the spotty track record of head and shoulders patterns, we are looking for NVLS to break to the upside. Friday NVLS was surging on volume. It came back well off the high but it also held onto a good chunk of the move. Monday NVLS faded slightly on lower, below average volume. Still solid, and looking for NVLS to continue higher, and as it does we are ready to move in if it can make that move stick.
VIDEO: http://investmenthouse1.com/ihmedia/NVLS.wmv
Volume: 3.097M Avg Volume: 3.112M
BUY POINT: $25.21 Volume=4M Target=$28.95 Stop=$23.45
POSITION: NVLS 10I24.00 - Sept. $24c (57 delta) &/or Stock
Play Date: 05/27/2010
PNRA (Panera Bread--$80.52; -0.31; optionable): Eateries
http://biz.yahoo.com/p/p/pnra.html
After Hours: $80.52
EARNINGS: 07/26/2010
STATUS: This one has stepped laterally both last Friday and then Tuesday to start this week, showing a doji both days. Yes, it did close off the intraday high both sessions, but this one is poised to move for us. Now it can do one of two things for a good buy: start right up and stick the move, or take a quick test lower towards the rising 10 day EMA and bounce. At this point we are just waiting to see it show the move higher and stick for a buy, but are sitting back to see which path it takes to get to that point. To recap: Double bottom. Similar to EAT. PNRA trended nicely up the 18 and 20 day MA from November through April. After that kind of move a rest is needed and this selling has allowed PNRA to test and set the foundation for a new run. It has formed a double bottom the past month and on Thursday gapped over the 50 day EMA, breaking out from the short pattern. Looking to participate in a run back up to the prior highs as our initial target.
VIDEO: http://investmenthouse1.com/ihmedia/PNRA.wmv
Volume: 1.101M Avg Volume: 508.848K
BUY POINT: $80.78 Volume=755K Target=$88.54 Stop=$77.54
POSITION: PNRA 10H80.00 - Aug. $80c (52 delta) &/or Stock
Play Date: 05/24/2010
URI (United Rentals--$12.21; +0.06; optionable): Rental and leasing service
http://biz.yahoo.com/p/u/uri.html
After Hours: $12.21
EARNINGS: 07/26/2010
STATUS: ABCD. This one gapped lower to start the day, but held the 50 day EMA and bounced sharply higher. Came well down from the better intraday levels Tuesday, as did nearly all other stocks, but did manage to hang onto some upside. Showing life as it tries to bounce, and just has to stick another move like this for us to pick it up. To recap: This is the perfect business for a weaker economy or even a slow recovering economy. The pattern is also a nice one as well, the classic ABCD stair-step after a big surge in late April to early May. Last week URI tested the 50 day EMA and has held, making a lower low on the pullback from the B point while also holding inside the strong 'A' move higher. As URI makes the move higher and can make it stick, we are ready to move in.
VIDEO: http://investmenthouse1.com/ihmedia/URI.wmv
Volume: 1.6M Avg Volume: 1.843M
BUY POINT: $12.23 Volume=2.2M Target=$14.69 Stop=$11.44
POSITION: URI 10I10.00 - Sept. $10c (73 delta) &/or Stock
DOWNSIDE PLAYS:
Play Date: 05/29/2010
CVS (CVS Corp.--$34.34; -0.29; optionable): Drug stores
http://biz.yahoo.com/p/c/cvs.html
After Hours: $34.34
EARNINGS: 08/04/2010
STATUS: Bear flag. Nearly identical to the move from Friday, with the long intraday reach up to the 18 day EMA and then snapping back down into the close. Showed a doji both Friday and now Tuesday under the 200 day SMA, and is just clawing along at this point. This one is ready to lose its grip and start to fall, and now we see if it can do that in the next day or so. To recap: Unlike many plays that have formed the old standby ABCD up pattern, CVS formed a broad umbrella top from the early April peak on into early May. That rounded top has the same and opposite effect of a rounded bottom: it sets up a move in the opposite direction. CVS started that move with the early May flash crash. It bounced but failed, gapping through the 200 day SMA. Last week CVS rebounded to the 200 day SMA, but on Friday it was showing a doji on the candlestick chart right at that key level after tapping the gap down point on the intraday day high. If CVS fails at this point, holding a move through the buy point, we are ready to move in for the downside play. A move to the initial target lands a 90%ish gain.
VIDEO: http://investmenthouse1.com/ihmedia/CVS.wmv
Volume: 19.128M Avg Volume: 10.532M
BUY POINT: $34.33 Volume=12M Target=$30.65 Stop=$35.11
POSITION: CVS 10T35.00 - Aug. $35p (-50 delta)
Good Investing!
Jon L. Johnson and your IH Alerts Team
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 in 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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