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Begin Part 2 of 2
THE PLAYS:
Best Plays:
1) CYH: Very solid pattern.
2) SO: Breaking out on volume in a weak market.
3) STN: Held steady as a rock Monday as the market sold.
4) ZMH: Still a very nice pattern.
5) CENT: Still very solid as it tests back on very low volume.
6) BER: Looking for one more test higher before it falls.
7) STJ: Weak attempt at the 18 day MVA.
NEW PLAYS
Upside:
CYH (Community Health Systems--$26.76; -0.34; optionable): Hospitals
http://biz.yahoo.com/p/c/cyh.html
STATUS: Cup w/handle. Working through a 4-month base after rising to its recent peak in June near 30. CYH is now in the second week of its handle, moving laterally on lower, below average volume. Accumulation is positive at 3 up weeks on rising volume to 2 down weeks on rising volume. Holding up very well in a market that is plunging as health services continues to be a safe haven that has not collapsed under this pressure.
Volume: 300.5K Avg Volume: 327.545K
BUY POINT: $27.61 Volume=500K Target=$31.75 Stop=$25.68
POSITION: CYH DE - April $25c (70 delta) and/or Stock
http://www.investmenthouse.com/ct/cyh.html
SO (The Southern Company--$29.36; +0.68; optionable): Electric utilities
http://biz.yahoo.com/p/s/so.html
STATUS: Breaking out. Not a clearly defined pattern, but SO continues to work higher and higher. The past 9 weeks it has moved laterally in a narrow range except for a dip in mid-September that quickly recovered. Volume has been excellent the past three weeks with accumulation solid at 7 up weeks on rising volume to just 3 down weeks on rising volume since April; very solid accumulation. Relative strength is breaking out with the move and money stream is rising ahead of the price.
Volume: 3.211M Avg Volume: 2.296M
BUY POINT: $29.47 Volume=3M Target=$33.88 Stop=$27.41
POSITION: SO BE - Feb. $25c (70 delta) and/or Stock
http://www.investmenthouse.com/ct/so.html
Downside:
ROIA (Radio One--$14.34; -1.27; optionable): Broadcast radio
http://biz.yahoo.com/p/r/roia.html
STATUS: Put. Broke below the 50 day MVA (16.34) and started to fall harder Monday on rising, above average volume. The stock bounced up off 11 on the low Monday, but we are willing to start some positions on a further fall and then complete the buy as ROIA moves below 14 on continued strong volume. It is not a far drop, but the option price and delta still provide a nice return.
Volume: 350.073K Avg Volume: 260.954K
BUY POINT: $14.11 Volume=300K Target=$11 Stop=$15
POSITION: UDO NW - Feb. $17.50p (-56 delta)
http://www.investmenthouse.com/ct/roia.html
CONTINUING PLAYS:
Upside:
CENT (Central Garden & Pet--$17.8; -0.15; optionable): Wholesale industrial equipment
Play Date: 09/12/2002
http://biz.yahoo.com/p/c/cent.html
STATUS: Cup w/handle. Held its ground on continued lower, below average volume as the stock tests its former high at 18. Again we anticipate a move back toward 17 before another run to breakout to a new high.
Volume: 74.203K Avg Volume: 130K
BUY POINT: New positions: After a test of 17. Breakout: 18.25. (orig. 16.95 and $16.15) Volume=300K Target=$18.15 Stop=$15.75
POSITION: EQH KV - Nov. $12.50c (82 delta, low OI) and/or Stock
http://www.investmenthouse.com/ct/cent.html
DP (Diagnostic Products--$44.6; -1.37; optionable): Diagnostic substances
http://biz.yahoo.com/p/d/dp.html
STATUS: Cup w/handle. Moving in the handle to its 4.5 month base, DP sold lower Monday toward the 18 day MVA (44.11) as it makes a lower low in the handle. That is not bad action as you want to see a stock pullback slightly in the handle to shake out the remaining weak holders. Volume was the questionable feature, however, as it held steady at above average levels. Preferably volume should contract. Looking for the 18 day MVA to hold. From there the stock needs to make the breakout on solid volume. Accumulation is solid at 6 up weeks on rising volume to 4 down weeks on rising volume. Money flow is outstanding as DP has been a recent leader as it builds the right side of its base.
Volume: 240K Avg Volume: 174.363K
BUY POINT: $47.74 Volume=260K Target=$54.94 Stop=$44.4
POSITION: DP CI - Mar. $45c (70 delta) and/or Stock
http://www.investmenthouse.com/ct/dp.html
Play Date: 09/26/2002
IDXX (Idexx Labs--$31.27; -0.2; optionable): Diagnostic substances
http://biz.yahoo.com/p/i/idxx.html
STATUS: Cup w/handle. A bit more volatile Monday, testing below the 18 day MVA on the low (30.69) and recovering to close above the 10 day MVA on rising, above average volume. A bit wilder than we want. That means we want to see the breakout on strong volume that holds toward the close of the breakout session. Excellent accumulation at 5 up weeks on rising volume to 1 down week on rising volume. Money flow is ahead of the price, and relative strength is ahead of where it was at the May high.
Volume: 293.203K Avg Volume: 288.772K
BUY POINT: $32.11 Volume=468K Target=$36.75 Stop=$29.86
POSITION: IQX LF - Dec. $30c (61 delta) and/or Stock
http://www.investmenthouse.com/ct/idxx.html
Play Date: 09/26/2002
ITRU (Intertrust Technologies--$2.89; -0.1; no options): Application software
http://biz.yahoo.com/p/i/itru.html
STATUS: Cup. ITRU got a bit volatile as well, testing below the 50 day MVA on the low (2.75) and recovering on low volume. Not the best action after such a nice handle. Still have to wait for the breakout. Accumulation in the base is positive at 2 up weeks on rising volume to 1 down week on rising volume. Looks ready.
Volume: 217.835K Avg Volume: 367.772K
BUY POINT: $3.35 Volume=550K Target=$4.75 Stop=$2.99
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/itru.html
MTEC (Meridian Medical Tech--$34.13; -1.4; no options): Medical instruments
http://biz.yahoo.com/p/m/mtec.html
STATUS: Cup w/handle. Handle got a bit wilder, testing down to the 10 day MVA on the close on some rising though still below average volume. Still a good handle though the trading range was getting a bit wild. That puts an asterisk beside this one that means it needs to settle down again, not sell much lower, and then provide a strong breakout. Accumulation is solid at 5 up weeks on rising volume to 3 down weeks on rising volume and money flow is racing up ahead of the price as it forms this lateral handle.
Volume: 85.745K Avg Volume: 95.227K
BUY POINT: $37.87 Volume=175K Target=$45.45 Stop=$34.77
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/mtec.html
STN (Station Casinos--$17.02; +0.1; optionable): Resorts and casinos
http://biz.yahoo.com/p/s/stn.html
STATUS: Cup w/handle. Still working in the handle of its base, holding solidly above the 10 day MVA (16.71) and moving slightly higher as volume jumped back above average. Accumulation is excellent at 5 up weeks on rising volume to just 1 down week on rising volume. Now we see if it can give the breakout.
Volume: 505.5K Avg Volume: 400.363K
BUY POINT: $17.62 Volume=600K Target=$12.45 Stop=$16.39
POSITION: STN DC - April $15c (86 delta) and/or Stock
http://www.investmenthouse.com/ct/stn.html
Play Date: 10/01/2002
UTHR (United Therapeutics--$15.8; -0.34; no options): Drug manufacturer
http://biz.yahoo.com/p/u/uthr.html
STATUS: Still consolidating the breakout of its 3-month cup w/handle pattern. It closed lower than the 18 day MVA (15.96) on slightly rising, though still very low volume. Great accumulation at 6 accumulation weeks to 2 distribution weeks.
Volume: 96.1K Avg Volume: 201.409K
BUY POINT: $16.79 Volume=310K Target=$20.25 Stop=$15.61
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ct/uthr.html
Play Date: 10/05/2002
ZMH (Zimmer Holdings--$38.41; +0.03; optionable): Medical appliances
http://biz.yahoo.com/p/z/zmh.html
STATUS: Ascending wedge. Monday was down and back up, showing a doji right on the 10 day MVA on rising, above average volume. The doji does not give much insight to what happens next. The stock is still in a good 2-month base showing positive accumulation at 2 up weeks on rising volume to just 1 down week on rising volume.
Volume: 1.266M Avg Volume: 1.176M
BUY POINT: $39.68 Volume=1.8M Target=$47.55 Stop=$36.9
POSITION: ZMH LG - Dec. $35c (89 delta) and/or Stock
http://www.investmenthouse.com/ct/zmh.html
Downside:
Play Date: 10/02/2002
BER (W.R. Berkley--$32.83; +0.17; optionable): P&C insurance
http://biz.yahoo.com/p/b/ber.html
STATUS: Put. BER continues to work below 33 but is not giving way. Monday it was up on rising, above average volume. It is having trouble with 33 on the high as there is price resistance from prior lows at that point. We anticipate that BER will try to bounce toward the 10 or 18 day MVA (33.34 and 33.58, respectively) and then fail. On a test of those levels and another fall (with a bounce in the overall market) that will be a good entry point.
Volume: 181.6K Avg Volume: 177.181K
BUY POINT: Looking for a move up to test 33 and then another failure, $32.88 Volume=190K Target=$30.88 Stop=$34.55
POSITION: BER WG - Nov. $35p (-61 delta)
http://www.investmenthouse.com/ct/ber.html
LNY (Landrys Restaurants--$19.57; -0.73; optionable): Restaurants
http://biz.yahoo.com/p/l/lny.html
STATUS: Put. Tanking as anticipated, falling Monday on rising volume.
Volume: 210.5K Avg Volume: 195.681K
BUY POINT: No new positions at this point (orig. $20.20). Volume=190K Target=$18 Stop=$21.45
POSITION: LNY MX - Jan. $22.50p (-60 delta)
http://www.investmenthouse.com/ct/lny.html
Play Date: 10/05/2002
RE (Everest Re Group--$53.62; +0.07; optionable): Accident and health insurance
http://biz.yahoo.com/p/r/re.html
STATUS: Put. A big doji below the 50 day MVA (54.89) on rising volume. It tried to make the move (55.70 on the high) and then fell back. Did not tank with the market, and it may try to move up again if the market makes a relief bounce. Will watch for it to fail at the 50 day MVA again and then move in.
Volume: 599K Avg Volume: 557.818K
BUY POINT: $53.35 Volume=550K Target=$50 Stop=$55
POSITION: RE WK - Nov. $55p (-55 delta, no OI)
http://www.investmenthouse.com/ct/re.html
Play Date: 10/05/2002
STJ (St. Jude Medical--$35.85; +0.65; optionable): Medical appliances
http://biz.yahoo.com/p/s/stj.html
STATUS: Put. STJ rallied up over the 18 day MVA on the high (36.50) but then fell back to close below it and the 10 day MVA (36.03) as volume backed off to below average levels. The selling was on volume spikes Thursday and Friday while the attempted rally was on lower volume. Classic test higher on lower volume after failing a test of the breach of the 50 day.
Volume: 923.4K Avg Volume: 1.256M
BUY POINT: $35.05 Volume=1.3M Target=$32 Stop=$36.35
POSITION: STJ MU - Jan. $37.50p (-57 delta)
http://www.investmenthouse.com/ct/stj.html
VRTX (Vertex Pharmaceuticals--$17.57; +0.19; optionable): Drug manufacturer
Play Date: 09/30/2002
http://biz.yahoo.com/p/v/vrtx.html
STATUS: Put. VRTX tested the 10 day MVA on the high (18.11) and turned down but finished positive as volume was so-so. Not bad and we are looking for another test up Tuesday to 18 and then a more serious roll down. It may have to do this testing as the rest of the market gives a relief bounce. That is okay. We will be patient and let it set up again.
Volume: 479.112K Avg Volume: 832.954K
BUY POINT: On anotehr test of 18 that fails, $17.96. Volume=900K Target=$15.75 Stop=$19.45
POSITION: VQR WD - Nov. $20p (-61.6 delta, low OI)
http://www.investmenthouse.com/ct/vrtx.html
WATCHLIST/ CONTINUING:
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
ABFS 09/24 BO 27.23 -2.38 30.1 34.45 518K 421K 27.75
Exited as the stock gapped below the 18 day MVA and could not recover.
AMGN 09/28 Put 44.7 +1.04 41.96 39 18M 15M 43
Current. Still hanging on, moving back over the 50 day MVA on above average volume. Needs to fail now or exit.
AMLN 09/18 cup hdl 14.95 -0.85 13.55 16.25 978K 750K 14.45
Current. Tested the 18 day MVA on a bit lower volume. Much steeper than we wanted. Needs to hold here.
APOL 08/15 A Wedge 40.18 -0.37 40.65 48 2.9M 3.3M 42
Current. Rallied up to near 42 after selling and then fell back. A relief bounce should push it higher but needs to close over 41.50.
BER 10/02 Put 32.83 +0.17 32.88 30.88 182K 190K 34.55
Buy not issued. One more test.
BG 10/05 Test BO 23.15 -1.09 24.25 28.55 206K 400K 22.55
Buy not hit. Testing back to the 18 day MVA on lower volume, but quite a drop.
BRCM 08/17 CCall 9.7 -0.4 19.2 19.8 10M 9M 17.25
Current. Doji on lower volume.
CENT 09/12 BO 17.8 -0.15 16.15 18.15 74K 300K 16.45
Current.
CLE 09/07 DB hdl 19.35 -1 22.41 25.94 253K 365K 20.84
COCO 09/18 Test 18 33.93 +1.72 38.11 42.75 1.6M 809K 35.44
Up to the 50 day MVA on lower though still strong volume. Now it needs to continue the move and not fail.
CYH 10/07 cup hdl 26.76 -0.34 27.61 31.75 300K 500K 25.68
New.
DP 10/02 cup hdl 44.6 -1.37 47.74 54.94 240K 260K 44.4
Buy not hit. A bit deeper test than we would want but still in the pattern.
HD 09/16 Test 50 24.21 -1.59 34.55 38 17M 10M 32.13
Still struggling to hold at 24.
IDXX 09/26 cup hdl 31.27 -0.2 32.11 36.75 293K 468K 29.86
Buy not hit. Still in the pattern.
ITMN 09/28 BO 30.28 -0.72 31.85 36 1.8M 2M 29.95
Current. Testing the 200 day MVA on some rising volume. Needs to jump here.
ITRU 09/26 cup hdl 2.89 -0.1 3.35 4.75 218K 550K 2.99
Buy not hit. Down to the 50 day MVA. Volume lower but dropping deeper than we wanted.
KDE 09/25 A Wedge 23.75 -0.02 21.31 25.55 265K 180K 22.85
Current. Big doji that held above the 10 day MVA.
LNY 10/05 Put 19.57 -0.73 20.2 18 210K 190K 21.45
Falling well.
MMSI 09/23 A Wedge 21.72 +0.3 20.5 24.65 222K 150K 19.65
Current. Up again in a down market.
MTEC 10/05 cup hdl 34.13 -1.4 37.87 45.45 86K 175K 34.77
Buy not hit. Moving back to the 10 day MVA while still in the handle.
PDCO 09/21 cup hdl 48.97 -1.52 53.21 61.25 250K 557K 49.49
Buy not hit. Dropped with a thud to the 50 day MVA though on continued below average volume.
PFE 09/07 Put 28.3 -0.25 30.55 27 19M 25M 29.12
Current. A bit lower. Tried the 10 day MVA on the high but failed.
PL 09/25 Put 28.1 -0.8 30.45 27.45 109K 200K 30.25
Continued the plunge toward the target. Volume backed way off, so if it gets near the target we take it.
RE 10/05 Put 53.62 +0.07 53.35 50 599K 550K 55
Buy not hit. Getting close.
RGIS 10/03 cup hdl 27.29 -0.37 28.84 33 372K 525K 26.82
Buy not hit. Doji at 27. Letting it work toward the breakout if it will.
RINO 09/28 A Wedge 14.21 +0.09 15.55 19.45 145K 225K 14
Buy not hit.
RINO 08/28 cup hdl 14.21 +0.09 13.8 16.75 145K 300K 14
Current. Hit the 50 day MVA on the low and recovered. Watching closely.
ROIA 10/07 Put 14.34 -1.27 14.11 11 350K 300K 15
New.
ROOM 10/01 Test BO 43.76 -3.05 51.05 55 1.6M 1.2M 47.48
Current. Tanked to the simple 50 day MVA on much stronger volume as ROOM tanked below our stop point and gave no bounce. After this hard selling looking for one, but if not coming will have to close it anyway.
SO 10/07 BO 29.36 +0.68 29.47 33.88 3.2M 3M 27.41
New.
STJ 10/05 Put 35.85 +0.65 35.05 32 923K 1.3M 36.35
New buy point.
STN 10/05 cup hdl 17.02 +0.1 17.62 12.45 506K 600K 16.39
Buy not hit. Still solid pattern.
SY 09/19 Put 11.06 +0.01 12.75 10 405K 680K 13.55
Still finding support at 11.
TEVA 08/12 DB hdl 66.2 -1.06 68.25 77.85 563K 1.2M 66.50
Current. Held at 66 on continued below average volume. Needs to re-take the 50 day MVA over 67 Tuesday.
TTWO 08/24 cup hdl 26.27 -1.68 26.61 31.94 1.7M 1.5M 27.25
Current. Held some support at 26 as TTWO was looking okay until late. Lighter volume so we see if TTWO takes part in a relief bounce.
TTWO 08/17 cup hdl 26.27 -1.68 24.75 29.85 1.7M 1.5M 27.25
Current.
UNT 09/25 Cup 17.97 -0.65 18.31 22 224K 255K 17.95
Current. Dropped on above average volume. Held at 18 but not looking solid.
UTHR 10/01 Test BO 15.8 -0.34 16.79 20.25 96K 310K 15.61
Buy not hit. Still in a tight consolidation, but has to make the move.
VRTX 09/30 Put 17.57 +0.19 17.96 15.75 479K 900K 19.45
Buy not issued. May test 18 one more time.
ZMH 10/05 A Wedge 38.41 +0.03 39.68 47.55 1.3M 1.8M 36.9
Buy not hit. Still solid.
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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