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us stock market, stock recommendation
Begin Part 2 of 2
THE PLAYS:
Upside:
LNCR (Lincare Holdings--$35; +0.77; optionable): Health services
http://biz.yahoo.com/p/l/lncr.html
STATUS: Cup. LNCR is moving in 2 month cup base on the heels of a late August breakout attempt that did not succeed. Instead of collapsing LNCR formed the current base. This is good action as it shows buyers still in the stock and the weeding out process continues. Friday LNCR showed a good price move though volume was lacking. It has excellent accumulation in the base, however, at 3 accumulation weeks to 1 distribution week. A breakout pushes the stock to a new high and that is what we like as there are no owners that bought at a higher price ready to try and get out 'even' when the stock gets close to where the bought it.
Volume: 795.97K Avg Volume: 1.478M
BUY POINT: $35.32 Volume=1.1M Target=$40.55 Stop=$32.85
POSITION: LQN BZ - Feb. $32.50c (70 delta, low OI) or LQN BF - Feb. $30c (81 delta) and/or Stock
http://www.investmenthouse.com/ci/lncr.html
SIE (Sierra Health Services--$19.6; -0.11; optionable): Health care plans
http://biz.yahoo.com/p/s/sie.html
STATUS: Cup. SIE is a stock we have been in before, and after a good run up to August it is forming its first significant base in awhile, a 2.5 month cup that used the 200 day MVA (16.32) as its floor. Like to see stocks form bases over that important support level. Volume dried up at the bottom as it should, and now it is starting its second move up the right side of the base on some better volume. Last week it encountered its first resistance point on the move at 20 and stalled. This week we are looking for a breakout over that level on strong volume as our entry point.
Volume: 250.9K Avg Volume: 387.379K
BUY POINT: $20.08 Volume=550K Target=$24 Stop=$18.67
POSITION: SIE CW - Mar. $17.50c (77 delta, low OI) and/or Stock
http://www.investmenthouse.com/ci/sie.html
UPL (Ultra Petroleum--$8.99; +0.23; optionable): Independent oil & gas
http://biz.yahoo.com/p/u/upl.html
STATUS: Cup. UPL is in a 6-month base as it nears an all-time high (a new issued in early 2001). Over the past month is has worked more or less laterally in a range from 8 to 9 as it tries to build pressure for a breakout over 9 and onto a new high over 9.50. Accumulation in the base is very good at 5 up weeks on rising volume to 2 down weeks on rising volume. We really like new issues that perform well. This is UPL's second base since going public. It broke out of the first base in March, rallied, and then started this second base. But for the quick trip to 6 in July when everything in the market sold, UPL held right on top of the prior base. That is exactly what you want to see in bases: stacking one on top of the other during a difficult market. When things get better, the runs between the bases get longer and so do the gains. Another thing we like s that a breakout will put it at another new high where there are not any shareholders that bought at a higher price and are just waiting for the chance to get out 'even.' In those situations the stock can rally up the short term moving averages with relative east. Really, really like that.
Volume: 220.7K Avg Volume: 229.031K
BUY POINT: $9.22 Volume=345K Target=$11.15 Stop=$8.57
POSITION: UPL CU - Mar. $7.50c (76 delta) and/or Stock
http://www.investmenthouse.com/ci/upl.html
WSH (Willis Group Holdings--$34.21; 0; optionable): Insurance brokers
http://biz.yahoo.com/p/w/wsh.html
STATUS: Testing the breakout. WSH is in one of our favorite positions: testing the breakout. WSH broke out of a 4-month cup w/handle base last week, ran up, and is now testing the breakout. The neat thing is that the breakout point it is testing is coincident with the 10 day MVA (34.14); we like to play breakouts off the short term moving averages as they move up those after a solid breakout 4 to 5 times before they need to test lower. It makes a great entry point and this one has two good attributes: breakout point and 10 day MVA. It also showed a 'hammer' doji on lower, below average volume. That is a perfect confluence of signals that WSH is ready to move. Insurance got a boost from the anti-terror insurance bill last week, and WSH looks ready to continue its move.
Volume: 336.2K Avg Volume: 649.392K
BUY POINT: $34.55 Volume=974K Target=$39 Stop=$32.13
POSITION: WSH DF - April $30c (low OI) and/or Stock
http://www.investmenthouse.com/ci/wsh.html
Revisited:
Play Date: 10/19/2002
AMLN (Amylin Pharmaceuticals--$17.63; +0.15; optionable): Drug manufacturer
http://biz.yahoo.com/p/a/amln.html
STATUS: New buy point. Testing the breakout. AMLN broke out in September, and now it is stepping up the short term moving averages, using them as support as it rises. Thursday and Friday AMLN sold back to the 10 day MVA (16.99), showing doji's on those levels as volume moved back below average. This is just the action you want to see on a test. We will look for some rising volume on a move back up to add to positions. As stocks typically move up off the short term MVA 4 to 5 times before testing lower, this is also a good place for new positions for a move up to 23 ultimately before it starts a deeper test.
Volume: 838.959K Avg Volume: 848.007K
BUY POINT: $17.85 Volume=750K Target=$20.45 Stop=$16.15
POSITION: AQM DC - April. $15c (72 delta) and/or Stock
http://www.investmenthouse.com/ci/amln.html
SCSS (Select Comfort--$7.67; -0.23; no options): Home furnishings (beds)
http://biz.yahoo.com/p/s/scss.html
STATUS: Testing the breakout. SCSS id doing exactly what we think UPL will do if UPL can put together a strong breakout: riding up its short term moving averages after a strong breakout to a multi-year new high. Typically stocks will bounce up off the short term moving averages 4 to 5 times after a solid breakout before they need to test lower to consolidate the move. That move is usually to the 50 day MVA, a point that makes another excellent entry for the strong stock. This is SCSS' second test of the 10 day MVA (7.55). It is an early breakout leader in the market, and thus it is strong and will most likely give us the 4 to 5 bounces up. That makes this a good add-to point and even a good entry point for new positions as it tends to run $1.50 on each bounce. The bounces get stronger both up and down on the later cycles, so it can give even more than $1.50 on those moves. $3 from the buy point is a 38% move or so, and that is not a bad use of your money over a 3 to 4 week period if it sticks to its schedule of making a rotation about every 6 sessions. This is what we call averaging up into winners, and in a uptrending market it can start making you some very serious money as you sit back and let the stock work for you.
Volume: 337.9K Avg Volume: 251.887K
BUY POINT: $7.75 Volume=200K Target=$9.55 Stop=$7.21
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ci/scss.html
CONTINUING PLAYS:
Watchlist that still look good:
ESPD: Making the move.
BSX: See the new buy point.
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
$OEX 10/10 Test 18 449.02 +2.81 398 415 13M 0 401
Ready to take the gain.
ACAS 09/10 Put 20.29 -0.16 17.35 14.75 443K 900K 18.25
Current. Doji right at the 50 day MVA on much lower, below average volume. Looking for a fall to test the 18 day MVA at 19 to exit.
AGAM 10/03 Test 50 5.99 -0.1 5.71 7 81K 100K 5.31
Buy not issued. Flirting with us, gapped higher then sold down Friday on lower volume. Had the volume Thursday but we held off, looking for a bit of a consolidation of the move from 5.25.
AMLN 10/19 Test BO 17.63 +0.15 17.85 20.45 839K 750K 16.15
New buy point.
AMLN 09/18 cup hdl 17.63 +0.15 13.55 16.25 839K 750K 16
Current.
APOL 10/12 BO 43.41 -0.72 44.24 50.88 3M 3.3M 42.05
Buy not issued. Holding the 18 day MVA on rising, above average volume after reaching much lower.
APOL 08/15 A Wedge 43.41 -0.72 40.65 48 3M 3.3M 42
Current.
BBI 10/08 Test 50 24.3 +0.76 25.24 28.65 1.1M 600K 23.75
Current. Recovered over the 50 day MVA on some stronger volume. Will now see if it can make a complete rebound.
BLUD 10/10 BO 20.16 +0.16 20.22 24.24 287K 650K 18.75
Buy not issued. Another doji at 20.
BSX 10/19 Test BO 36.1 -0.3 36.55 43.75 1.9M 3.3M 33.99
New buy point.
BSX 09/12 cup hdl 36.1 -0.3 30.94 40 1.9M 3.3M 33.94
Current. Nice lateral move testing the 10 day MVA on lower volume.
CCCG 09/12 Cup 17.44 -0.52 13.45 20 91K 51K 15.50
Current. Coming back to test 17 as expected.
CCE 10/15 cup hdl 23.87 +0.57 23.38 28 1.9M 1.6M 21.74
Buy not issued. Hit the buy point on lower though still solid volume. A solid move on the heels of a good volume Thursday. A bit volatile with Wednesday's move but that was based on KO's earnings, and that is a separate business.
CENT 10/15 Test BO 18.55 +0.41 18.55 22.25 188K 192K 17.25
Buy not issued. Right at the buy point and rising on better volume.
CHIR 10/16 Cup 42.51 +0.42 41.55 47 2.1M 3.5M 38.64
Buy not issued. Gapped lower but then 'melted up' on lower volume. Will be ready this week.
COCO 09/18 Test 18 36.99 -0.22 38.11 42.75 534K 809K 35.44
Current. Holding at the 18 day MVA with a doji on much lower, below average volume.
COCO 08/01 Rv H&S 36.99 -0.22 29.95 36 534K 809K 35.75
Current.
COO 09/26 cup hdl 55.85 +0.5 54 61 234K 375K 53.75
Current. Holding up better, riding the 10 day MVA on lighter volume.
CRL 10/14 A Wedge 39.77 -0.18 40.22 46.45 380K 700K 37.55
Buy not hit. But it looks so ready to move.
CYH 10/07 cup hdl 26.42 +0.25 27.61 31.75 257K 500K 25.68
Buy not hit. Dumped Thursday on strong volume and made a weak recovery Friday. Will keep an eye on it but not our favorite action in a handle.
DP 10/02 cup hdl 45.65 +0.23 47.74 54.94 118K 260K 44.4
Buy not hit. Worth keeping an eye on this week given the low volume in the handle along the 18 day MVA.
ETR 09/24 Put 38.7 -0.05 37.88 34 1.5M 1.3M 41.35
Current. Cannot get below 38. Time to exit.
HCA 10/07 cup hdl 50.66 +1.33 49.52 56.94 2.7M 3.2M 47.55
Current. Bounce back but on lower volume. Still strong and we will have to see how it pans out after that wild Thursday session.
HGR 10/17 cup hdl 16.7 +0.32 16.84 20.25 81K 231K 15.66
Buy not issued. Tried to make the move but no volume.
HLYW 10/14 Test BO 19.95 +0.53 19.45 22 1.1M 1.2M 18.09
Current. Resumed the move on rising, above average volume, but needs to clear 20.
HNR 10/17 Test BO 6.14 -0.05 6.38 7.75 103K 288K 5.78
Buy not hit.
HRB 10/14 Put 44.51 -0.36 41.96 38.12 1.7M 2.8M 43.45
Buy not hit. Still trying to roll over at the 200 day MVA, but with 42 as potential support just below, the risks are high.
INGR 10/03 cup hdl 18.75 -0.54 19 22.25 377K 525K 17.84
Still forming up.
ITRU 09/26 cup hdl 2.91 -0.05 3.35 4.75 128K 550K 2.99
Buy not hit. Lost a lot of its charm. Giving it a few more sessions to see if it can blast off of the 50 day MVA.
LBIX 10/14 cup hdl 3.42 +0.03 3.22 4.35 112K 145K 2.99
Current. Took the day off on some low volume.
LNCR 10/19 Cup 35 +0.77 35.32 40.55 796K 1.1M 32.85
New.
MME 10/01 cup hdl 41.5 +0.44 37.95 43.65 664K 650K 38.74
Current. Starting to struggle. MME has some of the best fundamentals in the market and a top pattern, but it has hit near 43 twice in three sessions and turned over sharply. It received a valuation downgrade (no big deal) and then warned Q4 was going to be below estimates, its first miss in ages. If it does not hold 40 we are not going to be in it to see where it ultimately lands.
MMSI 09/23 A Wedge 20.1 -3.62 20.5 24.65 1M 150K 19.65
Current. In all kinds of trouble, MMSI looked better Thursday, gapping up and holding a lot of the gain on higher volume. It was crushed Friday on massive volume. Held the 50 day MVA, and on any bounce we will exit.
NBIX 10/08 Rv H&S 42.35 +0.75 42.35 50.75 619K 1.1M 39.39
Buy not issued. Still looks very ready.
PETM 08/26 cup hdl 20.1 +0.02 17.04 22.85 1M 2.8M 18.05
Current. Held its own after Thursday's doji on big volume. May test back lower here toward 19. We were looking again at a covered call sale using the Nov. $17.50 calls, but with a $1 drop the gain would be small for the risk. Going to let it bounce again and then look at the numbers.
PFGC 10/12 Test 50 36.52 -0.11 36.55 39.5 416K 500K 35.15
Current. Very nice test of the 10 day MVA.
PNC 10/12 Put 37.9 +0.96 39.74 36.11 2.7M 1.7M 40.15
Lower volume recovery attempt.
QCOM 10/16 BO 36.2 +0.21 34.05 40 17M 20M 33
Current. Tested lower and then turned in a positive session on continued above average volume. Were tempted to buy some more calls but did not.
QCOM 10/10 BO 36.2 +0.21 31.1 38 17M 20M 32.25
Current.
QLGC 08/17 CCall 28.61 +0.19 36.48 0 16M 12M 33.55
Current. Another doji just below the 50 day MVA. Signals a possible fall but it is working for us.
RGIS 10/03 cup hdl 28.8 0 28.84 33 378K 525K 27.74
Buy not issued. Nice lower volume test of the 10 day MVA.
RINO 09/28 A Wedge 16.83 +0.25 15.75 20 884K 225K 14.65
Current. Another gap higher though it gave back much of the gain.
RINO 08/28 cup hdl 16.83 +0.25 13.8 16.75 884K 300K 14.75
Current.
SBUX 10/16 cup hdl 22.33 +0.61 24.21 29 4.9M 5.5M 22.35
Ugly pounding tried to recover to the 200 day MVA.
SCSS 10/19 cup hdl 7.67 -0.23 7.75 9.55 338K 200K 7.21
New buy point.
SCSS 09/21 cup hdl 7.67 -0.23 6.02 9 338K 200K 6.75
Current.
SHFL 10/12 A Wedge 21.9 0 20.38 24 237K 375K 19.75
Current. Doji at 22 on light volume. Taking the day off after a good move.
SIE 10/19 Cup 19.6 -0.11 20.08 24 251K 550K 18.67
New.
SLAB 10/16 Test 50 24.8 +0.18 24.4 28 655K 1.3M 22.69
Current. Resting on low volume. Money flow is huge.
STE 10/07 BO 26.04 +0.13 25.24 29.4 302K 711K 24.15
Current. A breather at the 10 day MVA, much needed after the Thursday gap higher and reversal.
STE 09/28 BO 26.04 +0.13 23.95 28.75 302K 711K 24.15
Current.
TEVA 08/12 DB hdl 66.89 +0.98 68.25 77.85 698K 1.2M 66.50
Exited.
TTWO 08/24 cup hdl 27.03 -0.13 26.61 31.94 1.6M 1.5M 27.25
Current. Testing the 50 day MVA (26.35).
TTWO 08/17 cup hdl 27.03 -0.13 24.75 29.85 1.6M 1.5M 27.25
Current.
UHS 10/09 cup hdl 53.32 -0.98 54.25 62 1.9M 800K 50.95
Held the 18 day MVA on the low as volume spiked up, an indication it may try to hold.
UNFI 10/15 BO 22.96 -0.05 24.05 28.85 172K 185K 22.37
Buy not issued. No volume on the move yet and somewhat violent last week.
UPL 10/19 Cup 8.99 +0.23 9.22 11.15 221K 345K 8.57
New.
USNA 10/14 Flat 8.68 -0.37 7.35 10 89K 65K 7.25
Current. Testing the move on very low volume.
VAR 09/16 A Wedge 46.95 +1.09 43.96 50.55 387K 550K 43.94
Current. Right back up to 47 where it needs to break over.
VRTS 08/19 CCall 15.46 -0.94 19.76 20 11M 8.5M 17.45
Current. Hit the 50 day MVA and moved back on some up and down earnings in the software sector.
VRTX 09/30 Put 18.73 -0.12 17.96 15.75 520K 900K 19.45
Just simmering at the 50 day MVA.
VZ 10/10 Test 50 34.97 -0.79 34.75 38.45 8.2M 10M 32.94
Current. Moving laterally above the 10 day MVA at 34 as volume backed off. Friday it showed a volume move back to average, so it may be stirring for another attempt at moving up after taking a week's rest.
WAG 10/09 Put 34.51 +0.37 32.28 30 2.3M 3.5M 33.35
Exited.
WEDC 10/19 BO 9.62 +0.58 9.45 12 260K 142K 7.95
Current. This was a bonus alert. It blasted off on some excellent volume.
WSH 10/19 Test BO 34.21 0 34.55 39 336K 974K 32.13
New.
XRAY 10/05 cup hdl 42.39 +0.09 42.28 48.75 673K 900K 39.85
Current. Took a breather on some lower volume.
Good Investing!
Jon L. Johnson and your IH Alerts 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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