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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: 07/08/2010
PNRA (Panera Bread--$75.30; +1.48; optionable): Lunch casual diners
http://biz.yahoo.com/p/p/pnra.html
After Hours: $75.00
EARNINGS: 07/28/2010
STATUS: Rolling. Strong 45 degree run from November to late April - - a bit stronger and longer than most but it ended at the same time. PNRA sold into the May flash crash and has since worked in a 9 week rolling trading range. The bottom of the range is at the February flat consolidation at 72, tapped Wednesday on the intraday low. This is the second test of this support during this range, and volume spiked as PNRA tested the level. That shows us buyers stepping in to support it at this level. Started to roll back up on Thursday on lower though still above average volume. Not too far into the move, and ready to move in as PNRA continues the move up off the bottom of its range. A leader that had a long run and needed a break, and while it takes that break we are looking to play the move.
VIDEO: http://investmenthouse1.com/ihmedia/PNRA.wmv
Volume: 553.367K Avg Volume: 520.372K
BUY POINT: $75.44 Volume=725K Target=$84.94 Stop=$72.42
POSITION: PNRA 10K75.00 - Nov. $75c (55 delta) &/or Stock
Play Date: 07/08/2010
VSAT (Viasat--$32.53; +0.59; optionable): Communication equipment
http://biz.yahoo.com/p/v/vsat.html
After Hours: $32.53
EARNINGS: 08/06/2010
STATUS: Triangle. VSAT has spent the past year rallying nicely and then selling pretty sharply as it consolidates those moves. After a February to April run VSAT is consolidating again, forming an 8 week triangle that is using the 200 day SMA on the lows as support. VSAT just made its second test of the bottom of the pattern and started to bounce. We are looking to picking up some VSAT as it continues the move, and then we see if it makes the breakout from the pattern. If so, we can pick up some more positions on that move or on the test of the breakout. Taking some positions off this move as it gives us a good entry point for potentially strong gain with a close stop point for a good risk/reward picture.
VIDEO: http://investmenthouse1.com/ihmedia/VSAT.wmv
Volume: 155.483K Avg Volume: 285.28K
BUY POINT: $32.64 Volume=400K Target=$36.74 Stop=$30.89
POSITION: VSAT 10I30.00 - Sept. $30c (67 delta, low OI) &/or Stock
Downside:
Play Date: 07/08/2010
ICE (Intercontinental Exchange--$107.31; +0.53; optionable)
http://biz.yahoo.com/p/i/ice.html
After Hours: $107.31
EARNINGS: 08/04/2010
STATUS: Bear flag. Not all stocks reversed back through resistance on the recent bounce. ICE cracked and it fell hard the past three weeks, slipping under the surface of the 200 day SMA support. Tuesday it rebounded, Wednesday it added a bit more, tapping the 200 day SMA on the high. It also showed a doji on the candlestick chart, and below a resistance point such as the 200 day SMA that can mean a bounce is over. If ICE backslides below the Wednesday close, preferably with a gap, we will look to move in and play another downside leg toward the February lows. That move lands a 55+% gain on the put options.
VIDEO: http://investmenthouse1.com/ihmedia/ICE.wmv
Volume: 898.043K Avg Volume: 1.049M
BUY POINT: $106.64 Volume=1.4M Target=$96.22 Stop=$108.66
POSITION: ICE 10U110.00 - Sept. $110p (-52 delta)
CONTINUING PLAYS IN POSITION TO MOVE:
Play Date: 06/14/2010
DLM (Del Monte Foods--$14.72; -0.19; optionable): Processed and packaged foods
http://biz.yahoo.com/p/d/dlm.html
After Hours: $14.72
EARNINGS: 08/30/2010
STATUS: Flag. After moving higher with the rest of the market Wednesday, DLM faded back to support Thursday. It is holding right at the 50 day EMA, and that leaves it in position to bounce right back up. This is one to watch Friday and early next week for the entry. To recap: You have to eat no matter what the economic conditions. After a solid March through late April surge that tested toward a 10 year high, DLM tested back through early last week, bracketing the 50 day EMA as it tested. Surged higher starting Tuesday, picking up some big volume Thursday as it gapped to the April peak. Testing back Friday and Monday, holding over the 10 day EMA as it does. Might take another day or two to test, but a very nice setup to make the next break higher. Want to see a move through the buy point on more solid trade.
VIDEO: http://investmenthouse1.com/ihmedia/DLM.wmv
Volume: 1.893M Avg Volume: 2.019M
BUY POINT: $15.44 Volume=2.2M Target=$18.55 Stop=$14.39
POSITION: DLM 10I15.00 - Sept. $15c (59 delta) &/or Stock
Play Date: 06/23/2010
KLIC (Kulicke & Soffa--$7.59; +0.01; optionable): Chip equipment
http://biz.yahoo.com/p/k/klic.html
After Hours: $7.59
EARNINGS: 07/26/2010
STATUS: Double bottom w/handle. KLIC was basically flat on the Thursday session after moving nicely higher Wednesday. It tapped support with the 50 day EMA on the intraday low, and is poised to start up again. With just a little time this one can start to work, so we will wait on it. To recap: KLIC is another chip equipment stock that is setting up nicely for an upside move . . . as long as it can complete this current pattern and show us the goods, i.e. a breakout. Nice rally into April but it peaked and needed a base to rest. It has put in some good work, forming a double bottom at the 200 day SMA and then rallying over the past two weeks on some decent upside volume. The past week a lateral move to form the handle, and though Tuesday was a bit rocky in terms of how much it tested, it is still above the 18 day EMA and the February and March peaks, a logical support area for the handle test. Watching for KLIC to hold this general area and then make an upside break through the buy point that sticks to the close. If it can do that, and it may take another day or two or three, then we are ready to move in with the buy
VIDEO: http://investmenthouse1.com/ihmedia/KLIC.wmv
Volume: 1.664M Avg Volume: 2.288M
BUY POINT: $7.75 Volume=2.5M Target=$9.38 Stop=$7.21
POSITION: KLIC 10J7.50 - Oct. $7.50c (64 delta) &/or Stock
Play Date: 06/26/2010
LSCC (Lattice Semiconductor--$4.61; -0.03; optionable): Semiconductors
http://biz.yahoo.com/p/l/lscc.html
After Hours: $4.61
EARNINGS: 07/19/2010
STATUS: This is another stock that showed life Wednesday, and then followed up with a Thursday pause. Still, LSCC bounced up from the lows to hold the 50 day EMA, and can very easily continue to bounce up from this level. When it does take that next step higher, we see if it hits our buy and sticks it. 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: 1.114M Avg Volume: 2.56M
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: 06/15/2010
NETL (Netlogic Microsystems--$29.61; +0.05; optionable): Semiconductors
http://biz.yahoo.com/p/n/netl.html
After Hours: $29.61
EARNINGS: 07/28/2010
STATUS: Reverse head and shoulders. NETL gave a very strong Wednesday bounce to move up off the May and June lows, and then paused Thursday. Nothing wrong with the lateral step to a doji, and the stock is in great shape. It can start right back up to hit our buy, but a short test and bounce would work as well. To recap: Worked laterally to finish up last week, and then tried to bounce Monday. Did not stick the move, but still in good shape at this level. If the stock can get a little fade and hold, we can look to buy it as it sticks a bounce higher. To recap: As with many stocks, a bit of side-step Thursday as NETL pauses after some solid upside that moved it past the early June peak. If it catches fire upside we can start some more positions. To recap: Looking at adding some positions on our current play as NETL has morphed its pattern into a bit of a reverse head and shoulders, forming the right shoulder the past two weeks. Tuesday NETL broke through the neckline resistance on the best volume in over a week, clearing the 50 day EMA on the way and holding just about all of the gain on the session. Solid upside break and ready to move into more positions as NETL continues this new move.
VIDEO: http://investmenthouse1.com/ihmedia/NETL.wmv
Volume: 1.302M Avg Volume: 1.438M
BUY POINT: $29.88 Volume=2M Target=$34.89 Stop=$27.79
POSITION: NETL 10J27.50 - Oct. $27.55c (67 delta) &/or Stock
Play Date: 06/30/2010
NFLX (Netflix--$116.98; -1.51; optionable): Mail order DVD's, games
http://biz.yahoo.com/p/n/nflx.html
After Hours: $116.78
EARNINGS: 07/21/2010
STATUS: ABCD. This stock really tried to continue the Wednesday bounce, but as nothing stuck it finished well off the intraday highs. That does give us an opportunity, however. We can see how it holds up at the coinciding 10 and 18 day EMA, and look to buy it with the bounce up from that support. 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: 3.755M Avg Volume: 3.451M
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: 06/28/2010
STE (Steris--$31.32; +0.09; optionable): Medical appliances and equipment
http://biz.yahoo.com/p/s/ste.html
After Hours: $31.32
EARNINGS: 07/26/2010
STATUS: ABCD upside. This stock finished in the green Thursday, but it was wedged under the 200 day SMA, showing a doji. We will see if it can continue higher from this point, but a better entry could be had with a short test back. Then with the solid bounce that holds we would pick it up. To recap: STE jumped higher to start February and then trending higher up the 10 day EMA into late April. Strong solid run. Since then it has stepped back, forming the B point in early May, the C point in mid-May, then down to the D point mid-June. STE rallied of that point and recaptured the 200 day SMA on that move. The past week it is testing again, this time holding the 200 day SMA and starting to bounce Friday and then again Monday. Nice setup as STE tests the bounce off the D point. As STE breaks higher once more and moves through the buy point, we are ready to move in if it can make it stick toward the close.
VIDEO: http://investmenthouse1.com/ihmedia/STE.wmv
Volume: 335.275K Avg Volume: 540.517K
BUY POINT: $31.21 Volume=700K Target=$36.95 Stop=$29.87
POSITION: STE 10I30.00 - Sept. $30c (68 delta) &/or Stock
Play Date: 07/03/2010
TEN (Tenneco Automotive--$21.29; +0.34; optionable): Auto parts
http://biz.yahoo.com/p/t/ten.html
After Hours: $21.29
EARNINGS: 07/29/2010
STATUS: Rolling. TEN gapped up, raced to the 18 day EMA, and then stumbled back to close with a doji. It is a little above our buy point now, but with a short test and then renewed upside, we would have quite a nice buy. So, we will watch carefully to see how this one reacts Friday. To recap: 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: 972.393K Avg Volume: 1.462M
BUY POINT: $21.11 Volume=2M Target=$25.91 Stop=$19.63
POSITION: TEN 10J20.00 - Oct. $20c (58 delta) &/or Stock
Downside:
Play Date: 07/06/2010
CLF (Cleveland-Cliffs--$49.42; +0.99; optionable): Steel components
http://biz.yahoo.com/p/c/clf.html
After Hours: $49.58
EARNINGS: 07/26/2010
STATUS: CLF gapped up and then formed a nice little doji under the 200 day SMA. It is starting to look tired, so we watch closely to see where the stock stalls out. When it makes that turn back down and holds it, we move in. To recap: CLF tested the 200 day SMA twice in the past two months, bouncing higher on each test. Last week it tested it again, but this time it did not hold. It broke through that level, made a modest test, then gapped upside Tuesday but flipped over for a loss. Looks to continue lower and we are ready to move in as it does. A move to the target lands a 40%ish gain.
VIDEO: http://investmenthouse1.com/ihmedia/CLF.wmv
Volume: 7.423M Avg Volume: 8.373M
BUY POINT: $48.37 Volume=10M Target=$40.11 Stop=$50.68
POSITION: CLF 10T45.00 - Oct. $45p (-45 delta)
Play Date: 07/06/2010
DECK (Deckers Outdoor--$47.00; +0.28; optionable): Footwear
http://biz.yahoo.com/p/d/deck.html
After Hours: $47.00
EARNINGS: 07/21/2010
STATUS: DECK gapped up as did many others Thursday, but it also faded back into the close. It is showing the weakness we want to see right under the 50 day EMA, and looks very ready to start back down. When it fails at this moving average and sticks the move lower, then we pick it up. To recap: DECK came back to test its 50 day EMA last week, and it could not hold. It bounced to end the week, trying to get back above that level. It fell a bit short and rolled over Tuesday on strong, above average volume. There is a gap higher from back in early March, and DECK may just try and fill that. A move down to our target lands a 45%ish gain.
VIDEO: http://investmenthouse1.com/ihmedia/DECK.wmv
Volume: 852.275K Avg Volume: 1.541M
BUY POINT: $46.64 Volume=1.8M Target=$38.89 Stop=$48.69
POSITION: DECK 10U45.00 - Sept. $45p (-46 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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