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stock recommendation, stock option
Begin Part 2 of 2
THE PLAYS:
Good movers: SSD; VALM; DJX; COLM; CUB; GE; DOCC; LOW; WTFC; WTW
Monday plays:
QLGC: Covered call worked out well.
GE: Nice move.
IWM: Making the break.
WTFC: Blasted higher on strong volume.
Best Plays:
1) VRTS: Another good big covered call.
2) GISX: May not be ready tomorrow, but the pattern is good.
3) Watchlist: ACL still looks good. AMGN held up well in the biotech selling.
SUBSCRIBER CHOICE
LVLT (Level 3 Communications--$5.76; +0.28; no options): Telecom processing
http://biz.yahoo.com/p/l/lvlt.html
STATUS: This stock received a lot of attention when Warren Buffet announced he was buying convertible bonds the company had issued. The stock jumped on the news, but it is not the same thing. Buffet obviously believes the company is going to make it or else his bonds would be worthless. The stock, however, does not have to race ahead for him to make his money; his money comes from the yield on the bonds, and if the stock does rally he can always convert. For Buffet it was another one of his smart patient moves. Does that make the stock a good buy here? Well it spiked to just over $7 on the news, tested lower and then tried again but failed. The result was a small double top that sent LVLT back down to its 50 day MVA (5.26). It is trying to consolidate there on very low, below average volume the past two weeks. Seems that after the initial euphoria that Buffet was 'investing in technology' everyone decided the stock was not that great. It is holding above some prior tops at 5.50, rallying up the past two sessions. Volume remains very weak, however. It is still mired in its back, and it has to clear 7.50 near its November high before we would consider it a possible buy if even then. It is noteworthy that the stock stalled on the Buffet move at that same point.
Volume: 3.066M Avg Volume: 5.284M
http://www.investmenthouse.com/cd/lvlt.html
NEW PLAYS:
Another Big Covered Call:
VRTS (Veritas--$19.74; +0.84; optionable): Software
http://biz.yahoo.com/p/v/vrts.html
STATUS: This is another covered call play we are looking for a solid, more or less maintenance-free return over the next 5 months. The action is not bad. The January $20 calls are asking 4.20 with the stock not even at $20 yet. That gives a solid 21.25% (4.2% per month) return on a buy/write play as discussed in the weekend report with QLGC. One thing to consider further: though this is not really the time to be getting far out on margin, the returns are stated on a cash account bases; if you use 50% margin for example, the return is doubled. Just something to consider as we are not recommending this is the time to be strung out on margin yet, but perhaps some margin percentage.
Volume: 8.584M Avg Volume: 12.741M
BUY POINT: $19.76 Volume=8.5M Target=$20 Stop=$17.45
POSITION: VIV AD - January $20 c to sell, Stock to buy
http://www.investmenthouse.com/cd/vrts.html
GISX (Global Imaging Systems--$20; +1.11; optionable): Specialty retail
http://biz.yahoo.com/p/g/gisx.html
STATUS: Ascending triangle. GISX is in a 7.5 month pattern taking up this whole year. Accumulation over the past few months is excellent at 6 up weeks on rising volume to 2 down weeks on rising volume. That means that the stock is being accumulated, and the higher lows in the pattern suggest that as well. It keeps finding resistance at 21, however, so that is the point that it needs to break on strong volume to propel the stock to greater heights.
Volume: 145.7K Avg Volume: 128.454K
BUY POINT: $21.11 Volume=193K Target=$25.25 Stop=$19.35
POSITION: QHJ KW - Nov. $17.50 c (74 delta, low OI) and/or Stock
http://www.investmenthouse.com/cd/gisx.html
MEMBER PORTFOLIO: CUB, EBAY, HOTT; LOW, NOC, PG, QLGC, RCII, SRCL, WM
LOW 07/06 Test 50 36.79 -1.15 0 0 4.1M 0 0
Earnings due out this week, and LOW was showing life Wednesday and Thursday before some lighter volume selling Friday. We anticipate it may try to move up toward the 50 day MVA near 39.40 early int eh week.
WM 08/03 A Wedge 37.89 -0.11 37.55 42.25 3M 5.2M 38.85
Current. A nice low volume test of the 10 day MVA on the low (37.20) as WM has continued to test its move 6 sessions back. Looks just about ready to continue the move.
CONTINUING/WATCHLIST:
We have made a change to the table. Instead of average volume we have included the target volume.
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
$DJX 08/12 A Wedge 89.91 +2.13 87.72 92.55 556K 0 87.35
Nice move over the 50 day MVA. Not much volume on the move.
ACL 08/06 DB hdl 35.4 +0.1 35.81 42.94 113K 900K 33.31
Buy not hit. Very low volume and another doji on the 10 day MVA. Looks ready.
AMGN 08/14 BO 46.42 -1.11 47.75 52.75 12M 18M 45.15
Buy not hit.
AMGN 08/03 Test 50 46.42 -1.11 44.75 52.65 12M 20M 45.15
Current. Back to the 10 day MVA on the close on continued low volume. Still a very nice pattern.
AMI 07/24 A Wedge 6.45 +0.06 6.77 9.94 82K 173K 6.45
Current. Good move on rising volume.
BRKL 08/12 BO 12.65 +0.03 12.11 15.12 556K 1.1M 11.85
Current. Holding flat on continued below average volume.
CFCP 07/29 A Wedge 14.43 +0.05 15.55 18.65 12K 55K 14.35
Buy not hit. Still in the pattern.
COH 08/13 BO 27.25 -0.01 25.55 30 800K 1.4M 24.95
Current. Took a day of rest on lower, below average volume.
COLM 08/13 BO 38.8 +1.07 36.85 42.38 156K 275K 36
Blasted higher but on continued below average volume.
COLM 08/01 Dbl btm 38.8 +1.07 35 39.95 156K 275K 35.45
COLM 07/27 Dbl btm 38.8 +1.07 34.25 39.95 156K 275K 35.45
CUB 07/06 Cup 23.09 +1.66 0 0 124K 0 0
Huge move off the 50 day MVA on rising, average volume.
CVTX 08/17 Test 18 26.3 -0.84 26.75 34.95 439K 1.3M 24.88
Current. Still a good, below average volume pullback on the 10 day MVA.
DOCC 08/08 BO 15.6 +1.05 13.75 16.5 360K 200K 13.51
Current. Huge move on strong volume.
DOCC 07/25 BO 15.6 +1.05 11.9 16.5 360K 200K 13
Current.
DROOY 05/21 A Wedge 2.95 -0.26 4.85 7 2.9M 4M 4.30
EBAY 07/02 Test 50 61.86 +2.89 57.95 63 8.8M 600K 58.50
Blasted off on so-so volume.
GE 08/17 A Wedge 32.89 +1.34 31.85 36 24M 35M 29.62
Current. Good move; could have used some more volume.
GISX 08/19 A Wedge 20 +1.11 21.11 25.25 146K 193K 19.35
New.
HOTT 07/06 Test 50 17.5 +0.62 0 0 550K 1M 0
INTL 08/05 Dbl btm 24.46 +0.46 21.49 24.65 519K 375K 22.95
Target hit.
IVGN 08/08 BO 36.75 +0.38 36.35 42.25 823K 1.5M 33.57
Current. Shook off the biotech selling today.
IWM 08/17 A Wedge 80.05 +1.1 79.02 82.65 1.6M 2M 77.25
Current. Solid move on rising, above average volume.
LOW 07/06 Test 50 41 +4.21 0 0 12M 0 0
Exploded higher on strong volume.
LVLT 08/19 A Wedge 5.76 +0.28 0 0 3.1M 7.9M 0
MLNM 08/14 Test 50 13.49 -0.86 14.35 19 6.6M 7M 13.35
Current. Tested the 10 day MVA on rising, above average volume as it got caught up in the biotech news of the day.
MOR 08/15 A Wedge 11.84 +0.35 11.25 13.48 14K 23K 10.46
Current. Gapped higher and showed a tight doji on lower, below average volume. May take a breather here, but a good move so far.
MTXX 07/31 A Wedge 10.66 +0.12 10.5 12 63K 38K 9.94
Current. Added a bit more today on continued above average volume.
NBTB 08/10 A Wedge 17.5 -0.05 18.35 22 22K 85K 17.07
Buy not hit. Patiently waiting on this one as well.
NOC 07/06 Test 50 117.25 +0.1 0 0 1.1M 1.7M 0
PG 07/05 Put 91.25 +0.26 0 0 3.8M 4.5M 0
QLGC 08/17 Big CC 37.37 +0.91 36.48 37.5 12M 12M 33.55
Current. Made the buy point with good option prices.
RCII 07/06 Cup 57.59 +0.9 0 0 298K 0 0
Continued moving higher though on below average volume.
SBIB 08/08 Dbl btm 15.3 +0.03 15.35 18.35 43K 203K 14.28
Buy alert not issued. Edging higher on no volume Monday.
SCIO 07/29 cup hdl 25.56 -0.47 32.55 39 1.5M 1.5M 29.95
Went nowhere Monday on below average volume.
SSD 08/01 PreSplt 31.65 +1 29.02 34 24K 25K 29.96
Current. Solid move on rising, above average volume.
TELK 08/03 Test BO 13.92 +0.3 14.65 17.65 143K 400K 13.05
Current. Moving up off the 18 day MVA on lower and lower volume.
USNA 08/10 cup hdl 6.43 +0.32 7.35 10 25K 65K 6.55
Buy not hit. Still holding on in the handle on low volume.
VALM 07/29 BO 23.41 +1.12 22.38 26.85 108K 120K 21.85
Current. Now it is moving well on strong, above average volume.
VFC 08/10 DB hdl 42.75 +0.31 40.65 45 491K 440K 41.55
Current. Held support at 42 and then started up on rising, above average volume.
VRTS 08/19 CC 19.74 +0.84 19.76 20 8.6M 8.5M 17.45
New.
WEDC 08/07 A Wedge 7.49 +0.04 7.63 9.85 40K 105K 7.1
Buy not hit. Still in a very good pattern.
WM 08/03 A Wedge 38.04 +0.15 37.55 42.25 5.3M 5.2M 38.85
Current. A good move, maybe not price, but on a recovery on strong, above average volume.
WTFC 08/17 cup hdl 35.04 +1.17 34.02 40.32 326K 225K 31.64
Current. Huge move on huge volume.
WTW 08/10 BO 48.06 +1.31 44.44 49.75 402K 546K 42.74
Current. Still rising. Volume was higher but still below average.
WTW 05/23 Test BO 48.06 +1.31 43.7 50 402K 250K 42.74
Current.
XOMA 08/15 A Wedge 5.5 -0.16 4.92 6.51 1.1M 710K 4.95
Current. Gapped higher and then closed lower. Volume was lower but still above average. Needs to hold near this range.
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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stock recommendation
stock option
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