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Begin Part 2 of 2
We apologize for the late report. We have been monitoring the futures markets and overseas markets after the Iraq news. Futures remain strong and foreign markets are up. Still, it is a long way until morning. Moreover, many downside plays are still well below resistance and the stop points. The futures continue to run strong tonight. These downside plays are very weak patterns, and unless the rally is very strong, many of the downside plays will be hard pressed to really race over resistance. Thus we are not going to automatically close out all positions, but we will be careful with those already at resistance that gap over it and are October expirations.
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TEAM TRADES
Team Trades are taken from various Invesment House reports. The trades are for illustrative and educational purposes as we attempt to give some insight into the positions taken by our staff during the session using our investing techiques taught in the online seminars. Thus some trades will be on stocks or indexes that are not covered in some reports, but one of the best ways to learn is to look at real time positions and then look back and determine what was done right, what was done wrong, and what would be a better plan the next time given the same circumstances.
GDW: Savings and loan that broke its 200 day MVA Thursday and tested that breach Friday. It was down again early Monday, and we were looking for renewed selling to take advantage of the test. We were looking at some November put options as they were currently available, gave us more time, and still provided a decent delta (the further out you go expiration wise the lower the delta). The November 65 puts were trading at 3.70 by 4.00 just after the stock hit the buy point. We dropped an order a dime in ahead of the ask as the stock was falling, but the fill came in at the ask. That was fortunate as the stock tanked after that. It then started a rise after lunch, however, with the rest of the market. It did not regain all that was lost, but we were in much better position right before lunch. At the close the options were 4.70 by 5.00.
THE PLAYS:
Monday plays:
INVN: Up again on the war fear but well off of its intraday high.
IVGN: Up again but low volume. Should move Tuesday.
FTN: Tanked but fought back from the low.
PEP: Rallied up to the down trendline on low volume.
Best Plays:
1) XRIT: Lots of accumulation and momentum.
2) CCCG: Forming the handle.
3) Continuing: COLM could really move Tuesday.
NEW PLAYS:
Upside:
XRIT (X Rite--$8.86; +0.18; no options): Photographic equipment
http://biz.yahoo.com/p/x/xrit.html
STATUS: Cup. XRIT has formed a nice cup in 2002, and accumulation is solid at 12 up weeks on rising volume to just 6 down weeks on rising volume. That means there are net buyers of the stock. Not just a few, but a lot. It has enjoyed a good move up of late, clearing the 200 day MVA at 8.35 three sessions back. Monday it was up on strong volume again as relative strength broke out with the stock's move. It may form a handle here where it moves laterally for a few sessions, but news such as Iraq could send it and most stocks moving higher. We are willing to take some positions on that move. This stock may not be one that we hang onto for a long time, but it has good accumulation, and if it continues to move well we will stay with it.
Volume: 79.9K Avg Volume: 33.136K
BUY POINT: $9.02 Volume=65K Target=$10.35 Stop=$8.22
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/xrit.html
Revisited: These look as if they could move on a good rally.
CCCG (CCC Information Services--$12.80; -0.49; no options): Management services
Play Date: 09/12/2002
http://biz.yahoo.com/p/c/cccg.html
STATUS: Cup w/handle. Now CCCG is forming that handle, pulling back Monday on much lower volume. The stock has very solid accumulation, excellent money flow, and relative strength is breaking out. It may need another few days of the handle, but the Iraq news is just the news that might break it out big time.
Volume: 52.9K Avg Volume: 34.363K
BUY POINT: $13.45 Volume=51K Target=$16.15 Stop=$12.41
POSITION: Stock (no option chain)
http://www.investmenthouse.com/cd/cccg.html
STE (Steris--$22.96; +0.21; optionable): Medical appliances
Play Date: 08/21/2002
http://biz.yahoo.com/p/s/ste.html
STATUS: Double bottom/cup. STE has been on our screen for awhile. You can say it is in a big double bottom of sorts starting back in November 2001 or a more recent V-shaped cup dating back to May. In either event, 23 roughly marks the resistance in the pattern. STE has been moving the last week above the 18 day MVA on the lows (22.44) and just below 23 as volume backed way off. It looks ready to make the breakout move and the Iraq news may be the catalyst. Still want to see the volume on the move as that has been lacking on each attempt higher.
Volume: 205.8K Avg Volume: 486.409K
BUY POINT: $23.28 Volume=711K Target=$26.78 Stop=$21.85
POSITION: STE LD - Dec. $20c (72 delta) and/or Stock
http://www.investmenthouse.com/cd/ste.html
MEMBER PORTFOLIO: CUB, EBAY, HOTT; LOW, NOC, PG, QLGC, RCII, SRCL, WM
These are the stocks that our subscribers vote to put in a 'portfolio' to track their progress and comment upon when they reach buy points, sell points, or levels to write some covered calls on. They are not covered every report, but when something interesting is developing we take note.
PG 07/05 Put 93 +1 0 0 3.6M 4.5M 0
Good move on some rising volume. One of the strong Dow stocks it could really move.
RCII 08/24 Test 18 58.41 +0.67 58.02 66.45 224K 701K 53.96
Moving up, just needs volume.
CONTINUING/WATCHLIST: These are stocks that are current plays (the buy point hit), waiting for the buy point to be hit (buy not hit), or buy not made for various reasons (buy alert not issued). The date references the date the play first appeared on the report. Pivot is the buy point.
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 09/09 Put 83.00 -0.13 85.24 82.25 216K 0 85.75
Current. Doji above support at 82.50. Will be up Monday. Don't want it over 85.
ABK 08/27 Put 56.01 -1.25 57.94 53.15 1.4M 850K 58.05
Current. Bombed to54 on the low but then ran back up to close at the gap down point.
ALLY 09/07 cup hdl 15.61 -0.4 15.86 18.25 1.3M 675K 14.55
Current. Tested the 18 day MVA on much stronger volume but managed to recover the 10 day.
AMMD 09/05 cup hdl 21.77 -0.08 23.57 27 249K 420K 21.92
Buy not hit. Still in the pattern with a doji.
ANN 09/03 Put 26.27 +0.52 24.96 21.25 254K 1.6M 26.45
Current. UP to the 200 day MVA on very low volume. Most likely will hit the stop Tuesday.
BEN 09/04 Put 33.93 +0.02 34.35 30.75 395K 950K 34.55
Current. At resistance on low volume.
BRKL 08/12 BO 12.19 -0.01 12.11 15.12 216K 1.1M 11.85
Current. Doji on low volume.
C 09/11 Put 29.88 +0.5 29.96 26 12M 20M 32
Current. Up to 30 on the high but low volume. Will probably test 32 Tuesday.
CARS 08/30 cup hdl 24.83 -0.17 25.18 28.95 74K 400K 23.42
Buy not issued. Trying to gather strength to move over the breakout. No volume Monday.
CCCG 09/12 Cup 12.8 -0.49 13.45 16.15 53K 51K 12.41
Buy not hit.
CFCP 07/29 A Wedge 13.77 -0.67 15.55 18.65 11K 55K 14.35
Buy not hit. Below the 50 day MVA on rising volume.
CMA 09/11 Put 54.02 +0.52 55.45 52 712K 1M 57.45
Current. UP to 54 on lower volume. May try back up to test the 10 day MVA at 56.
COH 08/22 cup hdl 29.03 +0.05 27.55 33 1.6M 1.4M 28
COH 08/13 BO 29.03 +0.05 25.55 30 1.6M 1.4M 28
Current. Holding up on strong volume. Should run Tuesday.
COLM 08/13 BO 37.95 -0.2 36.85 42.38 82K 275K 36
COLM 07/27 Dbl btm 37.95 -0.2 34.25 39.95 82K 275K 35.45
Current. Nice test of the 18 day MVA on low volume.
CUB 08/24 Test 50 21.12 +0.56 22.25 27.94 50K 205K 20.69
CVS 09/09 Put 29.57 -0.14 29.24 26 1.2M 3.3M 30.65
Buy not issued. Not making the drop.
CYBX 08/20 Flat 18.35 -0.15 17.65 21.25 97K 280K 16.41
Buy not issued. Good test of the 18 day MVA on below average volume.
DROOY 05/21 A Wedge 4.5 0 4.85 7 2.2M 4M 4.30
EBAY 08/27 Put 57.85 -0.15 56.95 53.25 2.7M 13M 56.25
ELAB 09/07 cup hdl 21.3 +0.53 19.25 22.65 151K 218K 18.85
Current. Good move.
FAF 09/09 cup hdl 21.12 -0.17 22.03 25.35 301K 511K 20.44
Buy not hit. Still in the pattern. Volume moved Monday.
FTN 09/14 Put 36.36 -0.39 36.59 32.85 314K 500K 38
Current. Hit the buy but recovered much of the loss.
HOTT 07/06 Test 50 19.74 +0.22 0 0 247K 1M 0
INVN 09/14 BO 36.27 +0.51 35.85 44 1.8M 1.5M 33.34
Buy not issued. Closed off the intraday high. May slow now that war news is less.
IVGN 08/08 BO 36.61 +0.32 36.35 42.25 807K 1.5M 33.57
New buy not hit, but getting ready for Tuesday.
JOSB 09/10 cup hdl 22 +0.08 20.76 24 53K 158K 19.31
Current. Doji at 22 on low volume. Tuesday may boost it over this level.
JP 08/30 Put 41.54 -0.38 41.72 38.55 261K 700K 42.65
Current. Was ready to roll over at the down trendline. We will see how it holds up Tuesday.
KMG 09/12 Put 44.02 -0.2 43.74 40 528K 700K 45.35
Current. Doji at 44. May have to bail.
LOW 09/12 Test BO 45.47 +0.5 45.9 52.75 3.8M 7.5M 43.35
Buy not hit. Up on some rising volume. May be ready.
MCK 09/07 Put 31.03 -0.31 31.65 28 1.1M 1.9M 33.45
Current. Started to fall but recovered a bit late.
MEDI 08/31 Put 23.99 -0.01 25.35 22 2.8M 8.2M 25.25
Current. Low volume rally up to resistance at 24.
MTG 09/10 Put 48.7 -6.53 57.55 53.75 4.3M 950K 56.25
Target hit.
NBTB 08/10 A Wedge 17.65 -0.59 18.35 22 134K 85K 17.07
Buy not hit. Tried to make the move; had the volume.
NOC 07/06 Test 50 128 +2 0 0 1.4M 1.7M 0
PEP 09/11 Put 40.95 +0.8 39.35 36 4.2M 7M 40.78
Buy not hit. Up to the down trendline.
PETM 08/26 cup hdl 18.15 +0.22 17.04 20.45 996K 2.8M 16.45
Current. Up on some low volume.
PG 07/05 Put 93 +1 0 0 3.6M 4.5M 0
Good move on some rising volume. One of the strong Dow stocks it could really move.
PPG 09/05 Put 51.41 -0.06 53.49 49.75 457K 1M 53.55
Current. Tapped lower again but recovered. Volume was very low. May test toward 53 again.
QLGC 08/17 CCall 32.15 -1.57 36.48 0 10M 12M 33.55
Hard fall on rising volume, but held 32.
RCII 08/24 Test 18 58.41 +0.67 58.02 66.45 224K 701K 53.96
Moving up, just needs volume.
RFMD 09/05 Test 18 5.98 -0.51 7.12 9 4.6M 9.5M 6.62
Buy not hit. Now it may just be ready to make the same roll up to 8.
SKO 08/27 Put 15.1 -0.16 14.59 12.25 133K 300K 14.75
Current. Was rolling over at the 18 day MVA. Tuesday may send it up and force us out.
STE 08/21 Cup 22.96 +0.21 23.28 26.78 206K 711K 21.85
Buy not issued. May be ready now.
VMI 09/10 BO 23.4 -0.95 24.23 26.85 25K 120K 22.53
Buy not issued.
VMI 08/30 BO 23.4 -0.95 22.38 26.85 25K 120K 23
Current. Fell below the 50 day MVA Monday. Not going to let it fall much, but should bounce Tuesday to let us take some gain.
VRTS 08/19 CCall 17.25 -0.49 19.76 20 7.6M 8.5M 17.45
Current. Holding at the short term MVA.
VWKS 08/30 cup hdl 7.86 +0.18 8.45 10.25 92K 890K 7.86
Buy not issued. May be ready after all of this up and down.
WEDC 08/30 BO 8.69 +0.05 8.55 12 87K 105K 7.95
WEDC 08/07 A Wedge 8.69 +0.05 7.63 9.85 87K 105K 7.88
Current. Wending its way up, showing higher volume Monday.
WOR 09/04 A Wedge 18.1 -0.15 19.06 22.85 201K 625K 17.65
Buy not hit. Holding the 18 day MVA, but has lost its pop.
WTW 08/10 BO 44.85 +0.1 44.44 49.75 767K 546K 45.94
Current. Held the 50 day MVA with a high volume bounce. Should do more Monday.
WTW 05/23 Test BO 44.85 +0.1 43.7 50 767K 250K 45.94
Current.
XRIT 09/16 Cup 8.86 +0.18 9.02 10.35 80K 65K 8.22
New.
XTO 08/24 cup hdl 20.38 -0.15 21.05 24.25 334K 811K 19.58
Buy not hit. May not make it now with the Iraq news.
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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