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trade stock, stock recommendation
Begin Part 2 of 2
TEAM TRADES
These sessions are difficult. What looked to be the return of selling was snuffed with some upside war news that sent stocks higher. A little covering became more short covering, and then some more on top of that. We closed out some new and old downside positions while at the same time keeping an eye on those upside patterns that had formed up well during the selling: those stocks that can hold up and complete their patterns during selling are showing uncommon relative strength and support. They set themselves for a move higher when the buyers come in. One example today (and there were a few) was ADLR. The stock was in a 5-month base, spending the last month moving laterally, forming the handle. It was tedious, but the accumulation was good and the pattern held. Tuesday when the market started back up it made the breakout. ADLR was up all session on some good volume, but with just over 1.5 hours left it made the breakout move, surging on strong volume. The stock hit the buy at 14.74, moved to 14.82ish and moved laterally. The volume was good, the action was solid on the breakout, so it was time to buy. With the stock holding laterally, it was fairly easy; it gets trickier when the stock is running up fast. With this rest we were able to put in a limit order near the ask and see if it would pullback and hit it. We got a partial fill and then needed to bump up the limit a bit to get the full fill. The stock then moved up another 20 cents or so in the last 15 minutes. Not a bad move at all.
THE PLAYS:
NEW PLAYS
Upside:
ROOM (Hotel Reservations--$50.39; -0.19; optionable): Online hotel reservations
http://biz.yahoo.com/p/r/room.html
STATUS: Testing the 200 day MVA (49.41). We looked at ROOM as a put, but it did not fail at the 200 day MVA, instead making the strong volume move over that level Thursday. It is now testing that breakout, showing a doji with a long tail all the way down to the 18 day MVA on the low (48.05) and rebounding smartly on rising, above average volume. Money flow has jumped up on this move and it looks ready for a trade here up to the 55 level.
Volume: 1.085M Avg Volume: 772.636K
BUY POINT: $51.05 Volume=1.2M Target=$55 Stop=$47.48
POSITION: URD AJ - Jan. $50c (60 delta) or URD AI - Jan. $45c (73 delta)
http://www.investmenthouse.com/ct/room.html
UTHR (United Therapeutics--$16.45; 0; no options): Drug manufacturer
http://biz.yahoo.com/p/u/uthr.html
STATUS: Flat base. UTHR broke out of its 13-week cup w/handle base in early September, and for the past three weeks has moved laterally above 16 and the 18 day MVA (15.88). It is consolidating the breakout move as the market traded lower during that time. Very good action considering the market falling back. It did not partake in the Tuesday rally, but with accumulation at 4 up weeks on rising volume to just 1 down week on rising volume, it is just a matter of time before it starts its next leg higher.
Volume: 160.637K Avg Volume: 206.136K
BUY POINT: $16.79 Volume=310K Target=$20.25 Stop=$15.61
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/uthr.html
CONTINUING PLAYS:
Upside:
COCO (Corinthian Colleges--$38.43; +0.69; optionable): Education
http://biz.yahoo.com/p/c/coco.html
STATUS: Ascending wedge. Finally getting some volume as the stock moved up to the breakout and actually held it through the close. We wanted to make sure it did hold the move as it tested intraday again down to the 10 day MVA (37.33) several times during the session. Now it looks ready to continue the move higher.
Volume: 1.014M Avg Volume: 786.454K
BUY POINT: Breakout: $38.11; new positions on a continued move up. Volume=809K Target=$42.75 Stop=$35.44
POSITION: UCS BF - Feb. $30c (74 delta) and/or Stock
http://www.investmenthouse.com/ct/coco.html
Play Date: 09/26/2002
ITRU (Intertrust Technologies--$3.12; -0.07; no options): Application software
http://biz.yahoo.com/p/i/itru.html
STATUS: Cup. Beautiful handle forming on very low volume. Accumulation in the base is positive at 2 up weeks on rising volume to 1 down week on rising volume; again, a simple majority is all that it takes.
Volume: 154.335K Avg Volume: 395.772K
BUY POINT: $3.35 Volume=550K Target=$4.75 Stop=$2.99
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/itru.html
PRX (Pharmaceutical Resources--$28.3; +0.32; optionable): Generic drugs
Play Date: 08/20/2002
http://biz.yahoo.com/p/p/prx.html
STATUS: Ascending wedge. Another good volume session as it tests the top of the pattern. Still looks ready.
Volume: 352.7K Avg Volume: 287.318K
BUY POINT: $28.91 Volume=525K Target=$34.65 Stop=$26.89
POSITION: PRX KE - Nov. $25c (71 delta) and/or Stock
http://www.investmenthouse.com/ct/prx.html
Downside:
ACS (Affiliated Computer--$44.56; +2.01; optionable): ITS
Play Date: 09/28/2002
http://biz.yahoo.com/p/a/acs.html
STATUS: Put. Jumped up to the 50 day MVA, but on lower, below average volume. Along for the ride with the market. A move lower can be used for aggressive positions.
Volume: 1.238M Avg Volume: 1.545M
BUY POINT: $41.96 Volume=1.8M Target=$38 Stop=$43.35
POSITION: ACS WI - Nov. $45p (-56 delta)
http://www.investmenthouse.com/ct/acs.html
UBS (UBS Warburg--$42.21; +1.21; optionable): Bank
Play Date: 09/28/2002
http://biz.yahoo.com/p/u/ubs.html
STATUS: Put. Rallied up to the 18 day MVA on the close but on much lower volume. Right back to the down trendline on lower volume. Looks ready to fall if the market runs out of steam.
Volume: 175.4K Avg Volume: 183.636K
BUY POINT: New positions: 40.89; (orig. $41.15). Volume=225K Target=$37.75 Stop=$43.15
POSITION: UBS WI - Nov. $45p (-65 delta)
http://www.investmenthouse.com/ct/ubs.html
WATCHLIST/ CONTINUING:
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
ABFS 09/24 BO 28.99 +0.29 29.18 33.45 309K 421K 27.14
ACS 09/28 Put 44.56 +2.01 42.45 38 1.2M 1.8M 43.35
AET 09/23 Put 36.96 +1.15 38.65 35.85 2.1M 1.7M 40.25
AMGN 09/28 Put 44.56 +2.86 41.96 39 21M 15M 43
AMLN 09/18 cup hdl 16.64 +0.02 13.55 16.25 870K 750K 12.45
APOL 08/15 A Wedge 45.25 +1.82 40.65 48 2.1M 3.3M 42
AXP 09/03 Put 32.72 +1.54 33.18 29.25 5.4M 8.5M 33.55
BRCM 08/17 Test 50 11.22 +0.54 19.2 19.8 11M 9M 17.25
BSTE 09/30 cup hdl 25.84 -3.15 31.25 35.94 1.5M 652K 29.06
CENT 09/12 BO 17.45 +0.34 16.15 18.15 97K 300K 15.75
CLE 09/07 DB hdl 21.03 -0.77 22.41 25.94 1.1M 365K 20.84
COCO 09/18 Test 18 38.43 +0.69 38.11 42.75 1M 809K 35.44
CTSH 09/14 Test BO 55.24 -2.23 63.32 70 887K 348K 58.89
CTSH 09/05 A Wedge 55.24 -2.23 60.35 67.94 887K 348K 56.75
CUB 09/18 Put 16.61 -0.39 18.98 16 167K 85K 21
DIAN 09/28 BO 46.06 -1.25 46.28 50 350K 425K 43.04
GDW 09/21 Put 65 +2.82 62.29 58.55 852K 675K 63.85
GDW 09/14 Put 65 +2.82 63.54 60 852K 675K 64.55
GLG 09/18 cup hdl 9.1 -0.15 10.59 12.75 621K 1.3M 9.45
HD 09/16 Test 50 26.38 +0.28 34.55 38 23M 10M 32.13
IDXX 09/26 cup hdl 31.49 +0.54 32.11 36.75 361K 468K 29.86
ITMN 09/28 BO 33.99 +1.17 31.85 36 1.6M 2M 30.05
ITRU 09/26 cup hdl 3.12 -0.07 3.35 4.75 154K 550K 2.99
KDE 09/25 A Wedge 24.43 +0.7 21.31 25.55 360K 180K 21.55
LH 09/24 Put 33.6 -0.18 33.55 27.75 849K 2.5M 35
MMSI 09/23 A Wedge 20.7 +1.39 20.5 24.65 175K 150K 18.94
PDCO 09/21 cup hdl 51.17 -0.01 53.21 61.25 420K 557K 49.49
PFE 09/07 Put 30.5 +1.48 30.55 27 20M 25M 30.25
PIXR 08/30 Test BO 47.39 -0.71 50.25 56.55 501K 580K 48.15
PL 09/25 Put 31.98 +1.21 30.45 27.45 167K 200K 31.55
PRX 08/20 cup hdl 28.3 +0.32 28.91 34.65 353K 525K 26.89
RF 09/25 Put 34.1 +1.43 32.95 30 1.1M 650K 33.65
RINO 09/28 A Wedge 15.38 +0.09 15.55 19.45 164K 225K 14
RINO 08/28 cup hdl 15.38 +0.09 13.8 16.75 164K 300K 14
ROOM 10/01 Test BO 50.39 -0.19 51.05 55 1.1M 1.2M 47.48
STJ 09/21 Put 36.54 +0.84 36.25 32.05 1.1M 1.9M 33.71
STT 09/17 Put 39.56 +0.92 39.59 35.75 2.3M 1.5M 40.97
SY 09/19 Put 11.99 +0.37 12.75 10 833K 680K 13.55
TCB 09/17 Put 43.63 +1.3 44.65 40.75 424K 375K 44.25
TEVA 08/12 DB hdl 68.85 +1.85 68.25 77.85 1.2M 1.2M 66.50
TIER 09/04 cup hdl 18.97 +0.05 20.21 23.25 171K 239K 18.65
TTWO 08/24 cup hdl 28.84 -0.16 26.61 31.94 3.3M 1.5M 26.05
TTWO 08/17 cup hdl 28.84 -0.16 24.75 29.85 3.3M 1.5M 26.05
UBS 09/28 Put 42.21 +1.21 41.15 37.75 175K 225K 42.98
UNT 09/25 Cup 19.71 +0.56 18.31 22 312K 255K 16.95
UTHR 10/01 Test BO 16.45 0 16.79 20.25 161K 310K 15.61
VRTX 09/30 Put 19.56 +1.07 17.96 15.75 913K 900K 19.45
WEN 09/21 Put 34.65 +1.54 32.75 30 1.4M 1.6M 33.33
WFC 09/30 Put 48.81 +0.65 47.98 45.75 7.8M 5.5M 49.03
Good Investing!
Jon L. Johnson and 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.
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