us stock market, stock watch

Begin Part 2 of 2

All prices reflect prices at the close on Wednesday.

THE PLAYS: Some great moves from IVGN, ADSK, FRED and LNCR. More looking good.

Best Plays:
1) SRCL: A nice-looking move up that's begging for more volume.
2) LNCR: Moving up toward a breakout.
3) CORS: Still looks great in the ascending wedge.
4) ADSK: Trying for a new high again.
5) PFGC: Good move on good volume for the week.
6) BGEN: 18 day MVA bounce ahead.
7) MAY: A retailer that is breaking out.
8) STE: Finally making its move.
9) Puts: Included several that look good. Check out GS and BRCD.

READY TO BREAK TO A NEW HIGH (or just did):

New Plays (from the weekend):

SRCL (Stericycle Inc--$39.25; +3.25; optionable (URL)): Materials and construction
http://biz.yahoo.com/p/s/srcl.html
STATUS: After showing a doji Monday, the stock sold back to the 18 day MVA (35.72) after its earnings report, but as volume dropped back to average Wednesday (198,500) the stock stretched back up to grab at the level of the doji. We want to see stronger volume to support a continued move out of the base (previous high is 42.25). On a pullback, look for support at the 10 day MVA (36.98), or the 38 level. Strong money flow and relative strength has broken out ahead of price.
BUY POINT: Over Tuesday's high of 40.75 on above average volume.
POSITION: Aggressive: Stock and/or May $40calls to buy (URL EH). 86 open interests.

CIMA (Cima Labs Inc--$58.25; -3.75; optionable (UVK)): Drug delivery
http://biz.yahoo.com/p/c/cima.html
STATUS: Continued down below the 50 day MVA (62.39) and is sitting on its up trendline (Sept/Dec/Feb lows), but volume though declined (290,000) remains well above average. May get a bounce, but no new positions until the stock makes a strong move back over the 50 day MVA.

TESTS OF THE BREAKOUT: Some of these stocks are moving back on low volume to test the breakout. We often take profits on option plays when they start to pullback on the breakout move and then get back in when the stock bounces up off of the breakout point. This second move is where some of the biggest gains are made.

New Play (from the weekend):

LNCR (Lincare Holdings Inc--$58.94; +2.44; optionable (LQN)): Health services
http://biz.yahoo.com/p/l/lncr.html
STATUS: Continues to approach the handle high in its 8-week cup with handle base (59.69), on rising volume of 692,600 (avg. 831,000). The stock made a stronger move up in its handle Monday as volume shot above average, so we want to see today's higher volume break above average to keep the stock moving toward breakout. Previous basing high is 63.13. Excellent money flow and buying, and relative strength has broken out ahead of price.
BUY POINT: Breakout: 59.82, on volume of 1.2 million or better.
POSITION: Breakout: Stock and/or May $55 or $60 calls to buy (LQN EL or EL).

Continued Plays (tests of the breakout):

SDS (Sungard Data Systems Inc--$55.70; +0.27; optionable (SDS)): Business software
http://biz.yahoo.com/p/s/sds.html
STATUS: The stock continued to step higher, showing its fourth consecutive doji, moving Wednesday above the 10 day MVA (55.42). The stock pulled off its high of 56.75 and didn't hold the opening price (56). SDS had pulled back from the recent breakout high of 60.14 and carved the recent 4-day move back up on mostly decreasing volume (just higher Wednesday at 946,000; avg. 895,090). Look for some consolidation at the 10 day MVA until the stock can surge back up from this doji on stronger volume.
BUY POINT: Aggressive: Over 57 on rising volume. Watch for resistance at 58.
POSITION: Stock and/or July $55 calls to buy (SDS GK).

ASD (American Standard--$56.63; -0.12; optionable (ASD)): Materials and construction
http://biz.yahoo.com/p/a/asd.html
STATUS: Moved higher Tuesday as volume moved to where we wanted it (above average), but the stock pulled back Wednesday to a doji as volume dropped back well below average (286,700). Can pull back to the 56 level if price cannot move up from here just yet. 10 day MVA is at 55.54. The stock hit a breakout high of 57.60, and shows good buying and excellent money flow. Relative strength is out ahead of price.
BUY POINT: Over 57.60 on volume in the range of 387,000.
POSITION: Stock and/or July $55 calls to buy (ASD GK).

FRED (Fred's Inc--$21.69; -1.44; no options): Retail
http://biz.yahoo.com/p/f/fred.html
STATUS: Lost this one after the stock looked promising on a high volume move out of the lateral consolidation Monday. It immediately plunged to the 200 day MVA on its low today (21.25). Classic example of why we keep moving up stop losses on a good move. No new positions.

WEDGES, PENNANTS, and FLYING PLATEAUS (AND FLAGS): These are some of our favorite patterns as the moves can be explosive. In this market, however, we need to see the move on the breakout on strong volume.

Wedges:

New Plays (from the weekend):

A small financial stock that is in a good pattern:

CORS (Corus Backshares Inc--$49.38; 0.00; no options): Banking
http://biz.yahoo.com/p/c/cors.html
STATUS: Pulled back from the upper level of the ascending wedge (50) as volume dropped to a scant 5,800 (avg. 34,636), moving up slightly on its open at the 10 day MVA (49). This is a nice shakeout of holders, and we continue to look for the breakout from this good-looking pattern. At least the pattern didn't lose it on the missed rate cut today. Buying looks better all the time, and money flow remains outstanding. Relative strength is out ahead of price, too.
BUY POINT: 50.26, on volume of 47,000 or better. A buy on the breakout up to 52.77.
POSITION: Stock.

Continued Play (from recent TTR updates):

VAR (Varian Medical Systems Inc--$66.40; -3.19; optionable (VAR)): Scientific and technical instruments
http://biz.yahoo.com/p/v/var.html
STATUS: We aren't giving up on it yet, and at least volume was lower and well below average (156,000; avg. 249,681) on this drop below the 18 day MVA (67.13). VAR may have to test its 50 day MVA again (at 63.80) as it did in January, after which the stock ran up to its current upper resistance level in the 70 range (VAR is in an ascending wedge). Otherwise, price support at 65-66 can halt this move down. Still shows good buying and great money flow.
BUY POINT: Aggressive: Up from here on stronger volume. Breakout: 71.13, on volume of 337,000 or better.
POSITION: Aggressive: Stock and/or May $60 calls to buy (VAR EL). Breakout: Stock and/or May $70 calls to buy (VAR EN); options have 56 open interests.

Continued Play:

A smaller stock that trades on decent volume.

RBNC (Republic Bancorp Inc--$12.38; -0.18; no options): Regional Banks
http://biz.yahoo.com/p/r/rbnc.html
STATUS: Tuesday's star doji didn't deliver as RBNC dropped to close just under support (18 day MVA at 12.43) on huge volume (435,500; avg. 203,409) as Greenspan had financials in turmoil. The stock is sitting on its up trendline (connects Jan/Feb lows and supports the ascending wedge), to where it moved up from the low of 12.25. We will see if it holds, but on this volume, not likely. Outstanding money flow and buying, and high relative strength.
BUY POINT: Breakout: 13.01, on volume of 275,000 or better. Remains a buy on the breakout up to 13.66.
POSITION: Stock.

Pennants:

Continued Play:

EDS (Electronic Data Systems--$63.83; +1.13; optionable (EDS)): Software
http://biz.yahoo.com/p/e/eds.html
STATUS: Holding up well. EDS moved off the 18 day MVA (61.64) Tuesday on above average volume, then moved higher today to a high of 65. Volume remained high but down at 2.9 million, pulling the stock back down to close. We will look for a move back up on a volume surge, keeping an eye out for lower support at the 10 day MVA (62.54). The stock is consolidating from a breakout high of 65.50, reached two weeks ago.
BUY POINT: Breakout: Over 65.50 on volume in the range of 3 million (avg. volume is 2.4 million).
POSITION: Stock and/or June $65 calls to buy (EDS FM).

BASING/TRADING RANGES:

New Play (from Monday):

JNY (Jones Apparel--$38.40; +1.07; optionable (JNY)): Retail
http://biz.yahoo.com/p/j/jny.html
STATUS: After a good-looking move up Monday, the stock sold back down the next day but pulled back Wednesday to close just on top of its 10 day MVA (38.30). Volume remained quite high but down at 1.56 million (avg. 1 million). We'd like to see a hold at this support, but the stock has tested down to the 50 day MVA (36.49) on its last two pullbacks, and we could see that move again. The stock is consolidating in a trading range with a high at 40.38.
BUY POINT: New high: Over 40.38, on continued strong volume.
POSITION: Stock and/or May $40 calls to buy (JNY EH).

New Plays (from the weekend):

ADSK (Autodesk Inc--$38.13; +1.50; optionable (ADQ)): Software
http://biz.yahoo.com/p/a/adsk.html
STATUS: Trying to break out of its handle (to a base of almost one year's duration), but after a strong move up from 32 which hit a high of 39.38 Monday, the stock has pulled back and bounced on the 18 day MVA (36.09). The move back up today was on continued decreasing volume of 935,300 (average 808,000), however. Looking for a breakout with another surge in volume.
BUY POINT: Breakout: 40.01 on continued strong volume.
POSITION: Breakout: Stock and/or July $35 calls to buy (ADQ GG under 100 open interest).

IVGN (Invitrogen Corporation--$80.50; +0.50; optionable (IUV)): Biotechnology
http://biz.yahoo.com/p/i/ivgn.html
STATUS: The stock broke out of its wedging consolidation Monday, but after pulling back Tuesday the stock tested all the way down to 76.13 (just below the 18 day MVA, at 76.70) before pulling back up for a tight doji. The pattern could indicate a move up, and it is encouraging that the stock is holding to close over the breakout point of 80.44. Still, it is a wild pattern, and we prefer them to be calm before breaking out, not all over the map. The breakout high was 82.88, with the high from November at 87.44.
BUY POINT: A move over 82.88 on continued strong volume (2.08 million; average 733,800).
POSITION: Stock and/or May $80 calls to buy (IUV EP).

PFGC (Performance Food Group--$53.00; +2.44; no options): Food wholesale
http://biz.yahoo.com/p/p/pfgc.html
STATUS: Made a big move today, but there was not good volume behind it (120,400; average 204,700). The stock is just below its intraday high of 53.44 made in the center spike of a shallow cup pattern (high in the left side is 56.75). We want to see a lot more volume on a continued move. Shows good buying and great money flow.
BUY POINT: Over 53.44 on above average volume.
POSITION: Stock.

A Trading Play:

SFA (Scientific-Atlanta Inc--$46.90; -0.35; optionable (SFA)): Telecom
http://biz.yahoo.com/p/s/sfa.html
STATUS: The move has broke down as it has pulled back below the 50 day MVA (51.22) after Friday's promising drive back over that level. The stock could have support at today's closing level, showing a loose doji after tapping up near the 50 day at its high of 50.65. Nothing much going on now, and we are not interested until we get another strong move over the 50 day.
BUY POINT: Aggressive: Back over the 50 day on above average volume (down to 1.85 million today; average 2.24 million).
POSITION: Aggressive: Stock and/or June $50 calls to buy (SFA FJ).

Continued Plays:

BGEN (Biogen Inc--$71.56; +0.81; optionable (BGQ)): Biotechnology
http://biz.yahoo.com/p/b/bgen.html
STATUS: Pulled back from Monday's move out of its recent wedging consolidation over its 18 day MVA (69.82), which it formed after its run up from the January low of 50.25 (in the right side of a cup base extending back to August). The stock tested back below the 18 day at today's low of 69.38, showing a loose doji on increased volume (3.7 million; average 3 million). The pattern could indicate that the stock has solid support and will move up, with Monday's high at 75.
BUY POINT: Aggressive: A move over 73.50 on increased volume. Breakout: Over 75.
POSITION: Both buy points: Stock and/or July $70 calls to buy (BGQ GN).

Other Basing Plays continued:

LOW (Lowe's Companies Inc--$55.88; -1.62; optionable (LOW)): Retail
http://biz.yahoo.com/p/l/low.html
STATUS: LOW has pulled back after Monday's move, tapping what has been good recent support at its 18 day MVA (54.80) at its low today. Volume has dropped way off, however, indicating the selling is not that strong (2.64 million today; average 2.9 million). The stock has been moving up in the right side of an eleven-month base, and has drawn back twice the last two weeks from 59.55. Looking for the stock to hold here on support, and move back over the recent high, but it could be tough for retailers to move as it looks like we will have to wait for a rate cut. Excellent money flow and relative strength.
BUY POINT: Over 59.68 on continued strong volume.
POSITION: Stock and/or July $55 calls to buy (LOW GK).

MAY (May Department Stores Co--$39.59; +1.30; optionable (MAY)): Retail
http://biz.yahoo.com/p/m/may.html
STATUS: Broke out of its recent wedging consolidation that the stock formed after leveling off from its climb up the right side of its 21-month base (previous high 45.25). Volume was solid on the move, coming in at 2.1 million (average 1.4 million). Looking for a continued move. The stock has been strong, with a steady move up from 19 over the past five months.
BUY POINT: A continued move up on strong volume. A buy up to 41.64 on the breakout.
POSITION: Stock and/or June $35 or $40 calls to buy (MAY FG or MAY FH).

STE (Steris Corp--$18.70; +0.65; optionable (STE)): Health services.
http://biz.yahoo.com/p/s/ste.html
STATUS: Finally made a move up out of its recent consolidation of dojis over the 18 day MVA (17.96), moving up on increased volume (249,300; average 271,500). The move is out of the stock's second recent handle to its 20-month base, with the handle high at 19.10 (and an intraday January high of 20.13). Good buying.
BUY POINT: Breakout: 19.38, on volume of 405,000 or more.
POSITION: Stock and/or June $17.50 calls to buy (STE FW).

Put Plays: New and continued.

MERQ (Mercury Interactive Corp--$62.94; -1.00): Software
http://biz.yahoo.com/p/m/merq.html
STATUS: MERQ continued down, hitting down to its November-January lows at 58-60 at its intraday low of 58.50. The stock managed to pull back up to close with a doji, which could indicate a little bounce, and if it does bounce, we can look at a put play back down from resistance. We will look for the turn back to be at the 10 day MVA (69.67, also in the range of recent levels).
BUY POINT: On a run back down after a move up to the 10 day MVA.
POSITION: April $80 or $85 puts to buy (RQB PP or RQB PQ).

VRTS (Veritas Software--$64.94; +2.63; optionable (SEZ, VUQ)): Software
http://biz.yahoo.com/p/v/vrts.html
STATUS: Crept up slightly, but could only manage a doji. The stock has been holding the past week to close over the 60 level, and has what has been support in a down trendline connecting November-December closing highs, currently at 55. We will see if the stock can make a bit more of a move up here, looking for it to hit resistance at the 10 day MVA (69.45) and turn back down, giving us another chance at a put play.
BUY POINT: On a move back down on continued strong volume (up to 19.6 million; average 12.4 million) after an unsuccessful test of the 10 day MVA.
POSITION: April $80 puts to buy (VUQ PZ).

CIEN (Ciena Corporation--$67.19; -2.56; optionable (UEE)): Telecommunications
http://biz.yahoo.com/p/c/cien.html
STATUS: Another strong tech that continued its drop, today closing back below its down trendline (connecting October and December closing highs, at 67.25), and below recent closing lows. Volume was way up on the selling at 27.7 million (average 16.7 million) as the stock hit 64.75 at its low (recent intraday low at 65.75, with December and January lows at 58-60.
BUY POINT: On a continued drop in market weakness.
POSITION: April $80 puts to buy (UEE PP).

QQQ (Nasdaq 100--$47.45; -1.55; optionable (QQQ)):
STATUS: Another solid drop on the heels of Tuesday's downward move, but Wednesday saw the drop come on sharply higher volume (102 million; average 56 million). Not looking like a bounce here, and on a continued move, a continued put play.
BUY POINT: On a continued drop from here on continued strong volume.
POSITION: April $55 (or further in the money options depending upon the delta at that point) puts to buy (QQQ PC).

OEX (Standard & Poors 100--$640.71; -10.26; optionable (OEY)):
STATUS: Dropped back again today, continuing down from resistance at its 10 day MVA (660), this time harder and on increased volume (1.18 million; average 1.2 million). Its recent low is 626.83, and we can look for a continued drop back toward the recent low.
BUY POINT: On a continued move down.
POSITION: April $670 puts to buy (OEY PF).

New Puts:

AMCC (Applied Micro Circuits--$26.75; -3.56; optionable (AEX)): Electronics: Semiconductor, Integrated Circuits
http://biz.yahoo.com/p/a/amcc.html
STATUS: Hit a new low on stronger, above average volume (24.9 million). From here, the stock doesn't have any near-term support. AMCC continues to turn down from its 10 day MVA and shorter term down trendline (Jan/Feb highs).
PLAY: On a continued move down on stronger volume, April $40 puts to buy (AEX OH or AEX QH).

VTSS (Vitesse Semiconductor--$39.44; -4.12; optionable (VQT)): Semiconductor
http://biz.yahoo.com/p/v/vtss.html
STATUS: A new low for the year Wednesday, continuing to sell down harder after tapping its 10 day MVA Monday on that day's high (54.13). Volume popped up, above average at 10.1 million, and on that momentum, the stock can head down to the May low of of 35.63 or lower. Money flow and relative strength have tanked.
PLAY: On a continued moved down on stronger volume, April $55 puts to bu (VQT PK).

BRCD (Brocade Communications--$38.81; -4.69; optionable (UBF)): Computer
Peripherals
http://biz.yahoo.com/p/b/brcd.html
STATUS: Moved down on stronger, slightly above average volume (15.5 million). The stock moved up to its down trendline (January and February highs) Monday at the end of a 3-day run, but did not break that resistance and looks ready to move lower. February low is 33.97.
PLAY: On a move down from here on continued strong volume. Watch the February low for possible resistance. April $50 puts to buy (UBF PJ).

VRSN (Verisign Inc--$47.69; -0.50; optionable (VUQ)): Internet Software & Services
http://biz.yahoo.com/p/v/vrsn.html
STATUS: Holding at the 46-47 level (intraday low, 46.75) as volume dropped to 6.5 million. The high tapped near upper resistance, the 10 day MVA (51.75). On a move up from this loose doji, the stock can meet the moving average again, but we will look for a move down from there once again. VRSN has turned down from that resistance since mid-January.
PLAY: On a move down from the 53 range after a move up to that level, or, on a move below the February low of 45.88 on stronger volume. From 53, April in the money puts to buy with a delta of .75 or better (not listed at the time of this writing, so check with your broker in the morning). Below 45.88, April in the money puts to buy, with delta of .75 or better (not listed as well).

GS (Goldman Sachs Inc--$91.75; -6.59; optionable (GS)): Bank
http://biz.yahoo.com/p/g/gs.html
STATUS: Sold down on stronger volume (4.7 million; avg. 2.77 million). The stock looks ready to continue sliding after turning down from its 10 day MVA (98.54) Tuesday.
PLAY: On a continued move down on stronger volume. Watch 90 for potential support.
April $110 puts to buy GS PB).

WEBM (Webmethods Inc--$43.00; -4.75; optionable (UUW)): Business Software
http://biz.yahoo.com/p/w/webm.html
STATUS: Hit a low of 40.75 but pulled up to close just higher (and above the previous February low of 42.24). Volume was huge, however (3.3 million; avg. 1.28 million), and on a move back under the low, the stock has no other support. Previous low (prior to the one noted above) was back in April at 44.50; the stock was issued a year ago.
PLAY: Aggressive: On a move down from here on continued strong volume. Safer: Below 40.75 on continued strong volume. April $50 or $55 puts to buy (UUW PJ or UUW PK).

Your Technical Traders Report 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.

us stock market
stock watch