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us stock market, trend trading stock
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: 07/03/2010
CAT (Caterpillar--$59.18; -0.79; optionable): Heavy machinery
http://biz.yahoo.com/p/c/cat.html
After Hours: $59.07
EARNINGS: 07/22/2010
STATUS: CAT fell sharply this week in the market selling, bit did not collapse. Indeed it has come back to the 200 day SMA, holding over the double bottom in late May and early April, undercutting the 200 day MA Thursday then reversing to hold that level. Friday CAT tried to pounce, but it faded back to the 50 day EMA on the close. CAT continues to show surprising resilience and we don't have any problem with that. If CAT bounces off the 200 day SMA and can make the move stick it is in a good risk/reward position to take some positions to play a rebound as the market rebounds from its oversold condition.
VIDEO: http://investmenthouse1.com/ihmedia/CAT.wmv
Volume: 7.878M Avg Volume: 10.211M
BUY POINT: $60.78 Volume=12M Target=$69.94 Stop=$57.78
POSITION: CAT 10K60.00 - Nov. $60c (56 delta) &/or Stock
Play Date: 07/03/2010
LULU (Lululemon Athletica--$36.32; -1.48; optionable): Apparel
http://biz.yahoo.com/p/l/lulu.html
After Hours: $36.69
EARNINGS: 09/06/2010
STATUS: Rolling. LULU is one of the group of market leaders that have been far and away the better performers. LULU peaked in early April and based, rallying again in mid-June to a new rally high. It could not make the break stick, however, selling off in the last two weeks when the entire market sold. It did not break down, however, instead holding the lower gap point from March, a level held in May and June. This past week LULU sold to that support and looks to be holding it, preparing for another bounce back to the upside. Want to see the move through the buy point hold into the close and that is when we move in to play a roll back up to the top of the range carved out over the past three months.
VIDEO: http://investmenthouse1.com/ihmedia/LULU.wmv
Volume: 1.428M Avg Volume: 1.633M
BUY POINT: $36.88 Volume=2M Target=$45.11 Stop=$34.98
POSITION: LULU 10L35.00 - Dec. $35c (59 delta) &/or Stock
Play Date: 07/03/2010
SANM (Sanmina-Sci Corp.--$13.12; -0.35; optionable): Printed circuit boards
http://biz.yahoo.com/p/s/sanm.html
After Hours: $13.12
EARNINGS: 07/23/2010
STATUS: Test 200 day SMA. SANM peaked a nice run in late April . . . as did many stocks . . . and then fell into the current selloff. The selling took SANM down to the mid-June low just above the 200 day SMA. It made a pair of lows there, bouncing in late May and early June. After that June bounce SANM sold back the past two weeks, again to the 200 day SMA where it held Thursday and Friday. Another semiconductor related issue that is holding its lows from the past two months and that puts it in position to provide us a nice upside rebound to the recent peak in June as the overall market bounces. That bounce provides a very nice gain and should do so in a short period.
VIDEO: http://investmenthouse1.com/ihmedia/SANM.wmv
Volume: 920.611K Avg Volume: 1.428M
BUY POINT: $13.33 Volume=2M Target=$16.21 Stop=$12.51
POSITION: SANM 10J12.50 - Oct. $12.50c (78 delta) &/or Stock
Play Date: 07/03/2010
SWKS (Skyworks Solutions--$16.64; -0.05; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/s/swks.html
After Hours: $16.55
EARNINGS: 07/19/2010
STATUS: Showing excellent relative strength even in this pullback over the past two weeks. A strong mover from November 2009, SWKS flattened out in March, pausing its run. Got very choppy in May, gapping higher to a new rally high and immediately reversing. Based out through mid-June and then broke higher once more; apparently it had its rest and was ready to mover once more. The selling the last two weeks of June brought it back, but it also managed to hold quite nicely at the 50 day EMA Thursday and Friday, bouncing up off its intraday lows. Its closes those two days are equivalent with the Fibonacci 38% retracement level. Very solid and ready to move in as SWKS continues higher and extends its move.
VIDEO: http://investmenthouse1.com/ihmedia/SWKS.wmv
Volume: 3.12M Avg Volume: 6.678M
BUY POINT: $16.96 Volume=8.5M Target=$19.55 Stop=$15.97
POSITION: SWKS 10K15.00 - Nov. $15c (88 delta) &/or Stock
Play Date: 07/03/2010
TEN (Tenneco Automotive--$20.24; -0.84; optionable): Auto parts
http://biz.yahoo.com/p/t/ten.html
After Hours: $20.24
EARNINGS: 07/26/2010
STATUS: Rolling. TEN is testing the 200 day SMA at the bottom of its 2 month trading range where it has traded roughly between 20 and 27. It has sold with the market the past two weeks, gapping below the 50 day EMA Tuesday and then tapping at the 200 day SMA on the Thursday low before rebounding to close flat on the session. Friday it was down but still held above the 200 day and those May and June lows. Nice sharp rebound off the support at the bottom of the range with volume rising nicely above average on the recovery. Oversold as is the market, and looking to play TEN to the upside in its range as the overall market makes a comeback off this recent sharp selloff.
VIDEO: http://investmenthouse1.com/ihmedia/TEN.wmv
Volume: 1.443M Avg Volume: 1.433M
BUY POINT: $21.11 Volume=2M Target=$25.91 Stop=$19.63
POSITION: TEN 10J20.00 - Oct. $20c (58 delta) &/or Stock
Downside Play:
Play Date: 07/03/2010
BTU (Peabody Energy--$38.99; -0.50; optionable): Coal
http://biz.yahoo.com/p/b/btu.html
After Hours: $38.95
EARNINGS: 04/22/2010
STATUS: Bear flag. The market is likely to bounce before it sells significantly more, but in the event it does not (and even if it does), BTU is in position to move downside and make us some money. A week back BTU bumped up against its 200 day SMA as BTU rebounded off the early June low. BTU failed a break through attempt and gapped lower Tuesday. It spent the rest of the week bumping the 18 day EMA and then on Friday started lower, making a new closing low on this selling leg. If it continues to break lower, particularly if the market fails without an upside bounce, we move in for a move to an initial target at 35. That move lands a 35%ish gain and we would take some profit there and then see if it breaks down through that support.
VIDEO: http://investmenthouse1.com/ihmedia/BTU.wmv
Volume: 4.013M Avg Volume: 6.849M
BUY POINT: $38.48 Volume=8M Target=$35.05 Stop=$40.38
POSITION: BTU 10U40.00 - Sept. $40p (-50 delta)
CONTINUING PLAYS IN POSITION TO MOVE:
Play Date: 06/29/2010
CREE (Cree, Inc.--$60.84; +0.13; optionable): Semiconductor equipment
http://biz.yahoo.com/p/c/cree.html
After Hours: $60.80
EARNINGS: 08/10/2010
STATUS: Rolling. CREE pulled back for a couple weeks, finally tapping the 200 day SMA on the lows Thursday and reversing to form a doji. Nearly an identical move Friday, and that leaves the stock hovering over the May intraday lows and the June low at the 60 mark. This one is positioned for that jump up, and now just has to take it. To recap: This is CREE's fourth time to test 61 over the past two months. With the 200 day SMA (58.77) rising up below the bottom of this recent range. Sold yes, but volume was still below average. Will see how CREE manages to hold this support, and if it can again find its footing and start back up from this level we will look to move in if it can bounce and make the move stick. Looking for a move up to the mid-May gap point, the most obvious resistance outside of the prior high.
VIDEO: http://investmenthouse1.com/ihmedia/CREE.wmv
Volume: 2.487M Avg Volume: 3.542M
BUY POINT: $61.11 Volume=3.8M Target=$70.72 Stop=$58.87
POSITION: CREE 10I60.00 - Sept. $60c (57 delta) &/or Stock
Play Date: 07/01/2010
FFIV (F5 Networks--$68.65; -0.95; optionable): PC networking, communications
http://biz.yahoo.com/p/f/ffiv.html
After Hours: $68.63
EARNINGS: 07/21/2010
STATUS: Ascending triangle. After a great test back and rebound Thursday, FFIV did ease lower to wrap up the week. It is still holding right at the key support from the recent up trendline, however, and still looks ready for the bounce. When it can make the push higher from this level, we look at making our move. To recap: Looking to add some positions as FFIV tests back to the 50 day EMA and its up trendline off the February low. FFIV sold during the overall market selloff, but it was an orderly pullback, coming back to logical support and still building a bullish pattern. Thursday FFIV sold but then reversed to close positive. If it can continue higher then it is worth adding some positions off of this very logical support level.
VIDEO: http://investmenthouse1.com/ihmedia/FFIV.wmv
Volume: 1.222M Avg Volume: 1.605M
BUY POINT: $69.96 Volume=1.6M Target=$78.95 Stop=$66.54
POSITION: FFIV 10J70.00 - Oct. $70c (49 delta) &/or Stock
Play Date: 06/26/2010
LSCC (Lattice Semiconductor--$4.30; -0.03; optionable): Semiconductors
http://biz.yahoo.com/p/l/lscc.html
After Hours: $4.30
EARNINGS: 07/19/2010
STATUS: LSCC gapped up to start the week but then faded back into the weekend. This formed a little stair step pullback the past two weeks, with the stock now resting nicely over the June lows. It has formed a doji the past two sessions at this support, and looks primed to make the turn higher from this point. To recap: LSCC is in a 9 week flag or pennant formed after a solid February to early May run. The test to form the pattern posted a double bottom at the 50% Fibonacci retracement level; you look for a pattern such as that double bottom to play off of the 50% level to regenerate the upside momentum and keep the stock running. It did in fact rally off of that second bottom into Monday last week where it peaked near the early June high and then slid back to the gap up point from late April. Good test of that initial move off the 50% Fibonacci double bottom. If LSCC continues higher on some decent trade through the buy point we will look at starting up the play. Looking for a run up toward the 127% Fibonacci extension though our target is a bit shy of that.
VIDEO: http://investmenthouse1.com/ihmedia/LSCC.wmv
Volume: 868.528K Avg Volume: 2.568M
BUY POINT: $4.48 Volume=2.8M Target=$5.45 Stop=$4.17
POSITION: LSCC 10L2.50 - Dec. $2.50c (88 delta) &/or Stock
Play Date: 06/30/2010
NDN (99 Cents Only Stores--$14.94; +0.14; optionable): Discount variety stores
http://biz.yahoo.com/p/n/ndn.html
After Hours: $14.94
EARNINGS: 08/06/2010
STATUS: Trend reversal. NDN continues to look solid as it finished the week off with a short bounce higher from the 50 day EMA. This short move up was on the heels of the three day lateral run along the 50 day as the stock took a quick test, and now it is trying to get going. If it can continue higher from this point and hold it, we have our buy. To recap: NDN peaked its last run in early April after rounding off the move starting in February. It has slid lower into early June, rebounding to the 200 day SMA last week, then bursting through on a strong shot of volume. Monday it moved through the 50 day EMA, then Tuesday it tested, holding right on top of that level once more. Nice break above the near term downtrend and looking for NDN to continue up from this modest test. The economy is viewed to be in jeopardy, and these kind of deep discount stores work well in a weaker economy. On a renewed break to the upside we are looking to pick up some NDN.
VIDEO: http://investmenthouse1.com/ihmedia/NDN.wmv
Volume: 709.659K Avg Volume: 679.394K
BUY POINT: $15.02 Volume=850K Target=$17.44 Stop=$14.27
POSITION: NDN 10I15.00 - Sept. $15c (44 delta) &/or Stock
Play Date: 06/30/2010
NFLX (Netflix--$107.08; -2.58; optionable):Mail order DVD's, games
http://biz.yahoo.com/p/n/nflx.html
After Hours: $107.00
EARNINGS: 07/19/2010
STATUS: ABCD. Looked like it might have been ready after the test and rebound Thursday, but it just went ahead and slid on us Friday. Not a problem at all as it is just continuing the test at the 50 day EMA, and it is still in great position for a bounce. So, we will keep an eye on this one early in the week to see what it gives us. To recap: NFLX is one of the leaders I have talked about, one we are watching during the selling to see if it sets back up and gives us a new buy point. After a good rally off the 50 day EMA starting in mid-May it peaked in mid-June and started the current test. It is stair-stepping back, coming again to the 50 day EMA to test the move. In so doing it has formed the familiar ABCD pattern. We like how volume rose as it fell to this key level, indicating that buyers were stepping up to support it. If NFLX can put in the bottom here and bounce it will have formed the D point and I am looking for a move up to the prior high as the initial target. Now we see if this leader can make that move for us.
VIDEO: http://investmenthouse1.com/ihmedia/NFLX.wmv
Volume: 1.6M Avg Volume: 3.456M
BUY POINT: $110.22 Volume=4.4M Target=$126.55 Stop=$106.46
POSITION: NFLX 10I110.00 - Sept. $110c (54 delta) &/or Stock
Play Date: 07/01/2010
PCLN (Priceline.com--$176.41; -5.62; optionable):
http://biz.yahoo.com/p/p/pcln.html
After Hours: $176.25
EARNINGS: 08/09/2010
STATUS: Rolling. The stock started to bounce Thursday, just was not quite ready to keep it going as it stepped back Friday to the support from the May and June lows. That still leaves it in great position to start the run up off support, so when it can show the jump higher from this point we are ready to move in. To recap: PCLN broke the February lows in late May, but it held another support level and had rolled up and down a couple of rotations since. This week PCLN completed the last move down to those prior lows and Thursday it started to bounce. Good risk/reward positioning and we are looking to play PCLN to the upside on this roll back to the top of this lower level range. If it makes the breakout, no issues with that.
VIDEO: http://investmenthouse1.com/ihmedia/PCLN.wmv
Volume: 1.423M Avg Volume: 1.492M
BUY POINT: $182.55 Volume=1.8M Target=$199.35 Stop=$174.92
POSITION: PCLN 10H180.00 - Aug. $180c (54 delta) &/or Stock
Play Date: 07/01/2010
TIBX (Tibco Software--$12.09; +0.11; optionable): Business software
http://biz.yahoo.com/p/t/tibx.html
After Hours: $12.09
EARNINGS: 09/20/2010
STATUS: Breakout test. Really can't ask for a better setup as TIBX continues to hold over the 10 day EMA, showing a doji. Very similar to the Thursday move with the intraday test lower, but this time it tapped the 18 day EMA before snapping back up into the close. As the stock is also settled over the June high it is ready to spring higher, we just need to show a little patience and let the play come to us. To recap: Very nice pattern has set up, setting the foundation for a new run higher. Solid March to early May rally, then it needed to consolidate the gains. TIBX then formed a 7 week triangle, using the 50 day EMA for higher and higher lows. Last Friday TIBX gapped out of the triangle on some huge volume, but as it was a Russell rebalance we decided to wait. Sure enough TIBX is testing, using the market selling to its advantage, sitting right on the 10 day EMA with a doji Wednesday. Strength in a weak market. When TIBX bounces and can hold the move we will step in to the upside.
VIDEO: http://investmenthouse1.com/ihmedia/TIBX.wmv
Volume: 3.68M Avg Volume: 3.698M
BUY POINT: $12.24 Volume=5M Target=$13.94 Stop=$11.38
POSITION: TIBX 10K12.50 - Nov. $12.50c (51 delta) &/or Stock
DOWNSIDE PLAYS:
Play Date: 06/29/2010
OII (Oceaneering Intl.--$44.78; +0.65; optionable): Offshore drilling services
http://biz.yahoo.com/p/o/oii.html
After Hours: *
EARNINGS: 07/28/2010
STATUS: Bear flag. OII was down early in the week and then stepped laterally from there. It is holding just fine under the 10 day EMA and for now we just see how that continues. If it can hold under this level and fade for us, we look to move in. To recap: As RIG and BP tumbled lower in May to early June, OII sold with them. Since July OII bounced, moving up to the late May lows mid-June. Last week OII sold with the market, bounced modestly, and then Tuesday gapped lower on rising trade. OII looks ready to continue lower toward that prior low just below 40. Ready to continue lower, and as it does we are ready to play the move. A move to the initial target lands a 50%ish gain; if you use the October options a 40% move.
VIDEO: http://investmenthouse1.com/ihmedia/OII.wmv
Volume: 494.743K Avg Volume: 1.284M
BUY POINT: $44.04 Volume=1.5M Target=$40.02 Stop=$46.08
POSITION: OII 10T45.00 - Aug. $45p (-52 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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