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stock watch, stock prices
Begin Part 2 of 3 (Please note three parts, not two as suggested in part 1)
All prices reflect prices at the close on Monday.
NOTE: Stop losses are plotted at one-quarter to one-half point below pivot points.
THE PLAYS: Several stocks continue to look good on the report as they hold on to their patterns (CNX, CORS, ADVP, WR, LIN, SRCL, FTS and RE). The puts are looking good as well; OEX gave a tremendous return from the options entry point at $21, to today's $68. Outstanding.
Best Plays:
1) CNX: Looks ready to leap up again.
2) CORS: Trying to make a move on stronger volume.
3) BKLY: Pulled back from the breakout move, but is still in the handle.
4) SDS: A perfect doji here can mean a move up.
5) WR: Looking for the volume spike to deliver.
6) YUM: Looking for a bounce up from the 10 day MVA.
7) LIN: Holding up nicely in the handle.
8) SRCL: Will look for a bounce from the 18 day MVA.
9) RE: At support in the handle.
10) Puts: JPM, IMPH, LH, DS, DJX
READY TO BREAK TO A NEW HIGH (or just did):
Back to a formerly covered stock:
CNX (Consol Energy Inc--$30.85; -0.05; no options): Metals and mining
http://biz.yahoo.com/p/c/cnx.html
STATUS: Pulling back again to support, the 10 day MVA (30.76), in a tight lateral movement that formed the last three days. Volume was much stronger Monday, shooting just above average to 188,500 (avg. 157,00). The stock on its last pullback tested to the 18 day MVA (currently at 30.26), which CNX might do, but this tight movement and second doji at the top of the intraday range looks mighty good for a move up from here. This is the support from which the stock made its last breakout move. Initial profit target: $31-$32.
BUY POINT: Up from here on continued rising volume. Stop loss: 30.26.
POSITION: Stock.
Continued Plays:
HI (Household International--$58.43; -1.84; optionable (HI)): Financial
http://biz.yahoo.com/p/h/hi.html
STATUS: Broke support of the 10 and 18 day MVAs (59.44 and 59, respectively) on stronger, above average volume (2 million; avg. 1.7 million). With that move, the stock is headed for a test of the 50 day MVA (57.15), the level from which it launched its last run up to the March high (62). We will look for a bounce back from there, but it needs to slow the fall.
BUY POINT: Aggressive: On a bounce from the 57 level (50 day MVA) on strong volume. New high: Over 62 on strong, above average volume.
POSITION: Both positions: Stock and/or July $55 calls to buy (HI GK).
A small financial stock:
CORS (Corus Backshares Inc--$51.38; +0.50; no options): Banking
http://biz.yahoo.com/p/c/cors.html
STATUS: Moved up slightly from the star doji on rising volume (16,900; avg. 29,000) as it refused to tank with the other financial stocks. On a strong breakout over the March high of 53.38 we will look at taking positions with stock. Like the stronger volume, which is trying to build. Buying and money flow remain outstanding.
BUY POINT: Over 53.38 on strong volume (23,000 or better).
POSITION: Stock.
BREAKOUTS:
New Play (from the weekend):
BKLY (W.R. Berkley Corp--$46.88; -1.25; no options): Insurance
http://biz.yahoo.com/p/b/bkly.html
STATUS: Pulled back from Friday's breakout move out of the handle of its 10-week cup base. Volume was stronger as the stock pulled off the high of 48.75, trying to sustain the breakout move (313,500; avg. 333,000). Volume is the problem; a stock cannot break out on below average volume. We anticipate a test of the 10 day MVA (45.85) and move back up, which would keep the stock in the handle. Buy point is 47.98. Initial target if we get the volume: $55-$57.
BUY POINT: 47.98, on volume of 500,000 or better. Remains a buy on the breakout up to 50.38. Stop loss on the breakout: 47.48 47.73.
POSITION: Stock.
Continued Plays:
ADVP (Advancepcs--$47.44; -2.50; optionable (QVD)): Health Services
http://biz.yahoo.com/p/a/advp.html
STATUS: Sure had high hopes for Friday's move on huge volume, but the stock pulled back to test the 10 day MVA on the low of 47, as volume dropped back. Volume is still high at 2 million (avg. 686,000), so if the 10 day MVA does not hold the stock, look for a test of the 18 day MVA (45.69). The stock remains in the double-bottom with handle pattern and most likely pulled back with the overall market. Buying, money flow and relative strength are all outstanding. Initial profit target on the breakout: $58-$62.
BUY POINT: over 50.32, on continued strong volume. Stop loss: 49.82 50.07.
POSITION: Stock and/or June $45 calls to buy (QVD FI).
DME (Dime Bancorp Inc--$30.45; -2.26; optionable (EIM)): Savings and loan
http://biz.yahoo.com/p/d/dme.html
STATUS: Sold back with other financial stocks, losing the breakout attempt from the ascending wedge pattern and tanking back down to close on the 18 day MVA (30.44). The stock appears ready to test the 50 day MVA again (28.84), as it did at the end of February prior to the recent run up. We will see if it does, but this move isn't what we were looking for.
BUY POINT: Back over 32 (upper level of the ascending wedge) on strong volume.
POSITION: Stock and/or June $25 calls to buy (EIM FE).
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.
Continued Plays:
WFT (Weatherford International--$57.10; -0.91; optionable (WFT)): Oil and gas equipmt http://biz.yahoo.com/p/w/wft.html
STATUS: Decent price/volume action as the stock continues the pullback, testing its recent breakout run. Volume was lower and just below average at 1.6 million as the low tapped support at the 10 day MVA (56.13). We will look for a move up from that support level or the buy point of 55.31. Since volume remains rather high for a pullback, we anticipate a continued pullback to either level. This could finally give a better entry point for new positions; protect existing option plays. Strong money flow and high relative strength continue.
BUY POINT: On a move back up after a test of 55-56, that move on rising volume.
POSITION: Stock and/or May $50 calls to buy (WFT EJ).
SDS (Sungard Data Systems Inc--$55.90; -0.60; optionable (SDS)): Business software
http://biz.yahoo.com/p/s/sds.html
STATUS: Pulled back to test the 18 day MVA as expected, showing a perfect star doji as the stock closed just under that support level. The star doji, coming after a 4-day pullback on lower volume (except for today, when volume rose only slightly to 866,100), strongly indicates a change in direction. We will see if SDS can turn it around, with the stronger volume and close just under support. The stock is trying to form an ascending wedge. Relative strength is out ahead of price.
BUY POINT: Aggressive: On a move back up from here, on continued rising volume. New High: Over 60.14 (February high) on above average volume.
POSITION: Aggressive: Stock and/or July $50 calls to buy (SDS GJ). New High: Stock and/or July $55 calls to buy (SDS GK).
OEI (Ocean Energy Inc--$18.39; -2.82; optionable (OEI)):
http://biz.yahoo.com/p/o/oei.html
STATUS: Totally lost it on a heavy drop to the 50 day MVA (18.09), tested on the low of 18.25. No new positions here; we were looking for a continued test of the stock's nice breakout of last week.
EAT (Brinker Int'l--$30.44; -0.56; optionable (EAT)): Restaurants.
http://biz.yahoo.com/p/e/eat.html
STATUS: The stock broke out Thursday, moved just higher Friday, then pulled back Monday, but volume was not what we like to see on a pullback, coming in much higher and well above average (1.3 million). Look for a test of the February high of 30.21, or the 10 day MVA, lower at 29.68. That's what the stronger volume points to. Watch existing positions; hang onto profit if so inclined. We are setting a stop just below the breakout.
BUY POINT: On a move back up after a test of 29.68 (or higher), on similarly strong volume.
POSITION: Stock and/or July $30 calls to buy (EAT GE, 10 open interests).
YUM (Tricon Global Rest Inc--$38.81; -1.12; optionable (YUM)): Restaurants
http://biz.yahoo.com/p/y/yum.html
STATUS: Pulled back on lower volume (707,800; avg. 857,000) after reaching a breakout high of 40.19 last week. The 10 day MVA is at 38.55, and on a continued move back to that support, we will look for a bounce back up on stronger volume, for a move back over 40.19. The breakout was from a short cup with handle base that formed in the upper right side of the stock's much larger base (previous high 44.38).
BUY POINT: On a move back over 40.19 on rising volume.
POSITION: Stock and/or July $35 calls to buy (YUM GG).
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 Play (from the weekend):
WR (Western Resources Inc--$24.70; -0.06; optionable (WR)): Utilities
http://biz.yahoo.com/p/w/wr.html
STATUS: In an ascending wedge pattern that formed after the stock dropped off the January high of 25.88. The stock Friday threw a huge volume spike (6.7 million; volume Monday shrank back to a diminutive 147,300; average is 480,000) as the stock showed a tight doji on the slight pullback (in price, at least). That spike just may give us what it signals a strong move up. The wedge is serving as the handle to a long cup with handle pattern, not a particularly desirable pattern for a handle in a bear market, but the spike makes it interesting. Looking at positions on a strong move over 25.88, the January high. Strong money flow and high relative strength.
BUY POINT: 26.01, on volume of 648,000 or better. A buy on the breakout up to 27.31. Stop loss: 25.51 25.76.
POSITION: Stock and/or May $22.50 calls to buy (WR EX; 28 open interest).
BASING/TRADING RANGES:
New Plays (from the weekend):
JLG (Jlg Industries Inc--$13.54; -0.39; optionable (JLG)): Manufacturing
http://biz.yahoo.com/p/j/jlg.html
STATUS: An unfortunate drop back from the tight handle in the cup base, to the 10 day MVA. Volume at least was lower at 92,100 (avg. 151,000) on the move, so we will look for a bounce back up. If we don't get it, the handle will lose its excellent form (indeed, this move doesn't do it a lot of good), but that does not mean we won't get a breakout. Stock shows good buying and money flow, and relative strength has moved out ahead of price, which is a bullish sign. Initial profit target: $16-$17 after a breakout.
BUY POINT: 14.21, on volume of 227,000 or better. Stop loss: 13.71-13.96.
POSITION: Stock and/or July $12.50 calls to buy (JLG GV).
LIN (Linens 'n Things Inc--$36.65; -0.21; optionable (LIN)): Retail
http://biz.yahoo.com/p/l/lin.html
STATUS: Holding solidly after gapping higher last week, consolidating slightly as volume drops appropriately lower (233,200; avg. 619,045) in the handle to the stock's newly formed smaller cup base. Handle high is 37.40. Relative strength is out ahead of price. Initial profit target: $43-$45.
BUY POINT: Breakout: 37.53, on volume of 929,000 or better. A buy on the breakout up to 39.41. Stop loss: 37.03-37.28.
POSITION: Stock and/or July $35 calls to buy (LIN GG).
Continued Plays:
SRCL (Stericycle Inc--$38.44; -0.94; optionable (URL)): Materials and construction
http://biz.yahoo.com/p/s/srcl.html
STATUS: SRCL is moving in the handle to a two-month cup pattern, holding above support at the 18 day MVA (37.59). After pushing up from that level Friday the stock pulled back on lighter volume today (95,300; average 175,000). Still looking good and holding up well, and we are looking for a breakout over the handle high of 40.75. Initial profit target: $47-$49.
BUY POINT: Breakout: 40.88, on volume of 262,000 or better. Remains a buy on the breakout up to 42.92. Stop Loss: 40.38 40.63.
POSITION: Aggressive: Stock and/or May $35 calls to buy (URL EG).
FTS (Footstar Inc--$45.90; -0.60; no options): Retail
http://biz.yahoo.com/p/f/fts.html
STATUS: After making a promising move up in its handle last week, FTS has pulled back the last three sessions, forming a double handle to its 10-week cup with handle base. The stock continues to hold its 18 day MVA (45.54), with what was strong support on the last drop at the 50 day below that at 44.22. We want it to hold here. On a breakout over the handle high (48.90) we will look at taking positions with stock. Initial profit target: $56-$59. High relative strength.
BUY POINT: Breakout: 49.03, on volume of 300,000 or better. A buy on the breakout up to 51.48. Stop loss: 48.53 48.78.
POSITION: Stock.
MFC (Manulife Financial Corp--$26.80; -0.48; optionable (MFC)): Insurance
http://biz.yahoo.com/p/m/mfc.html
STATUS: Still in the handle to its 8-week double-bottom pattern. The stock pulled back and closed just under its 50 day MVA (26.91), hitting last week's low at its intraday bottom of 26.70. Volume continued to be low (153,800; average 270,900), so we will watch for the stock to hold here, still looking for a breakout over the handle high of 28.22 (middle peak is 29.14). Tapped on the low a long-term up trendline that connects August and January lows, contributing to the support.
BUY POINT: 28.35; on volume of 405,000 or better.
POSITION: Stock and/or June $25 calls to buy (MFC FE; options have no open interest).
ADSK (Autodesk Inc--$35.13; -3.62; optionable (ADQ)): Software
http://biz.yahoo.com/p/a/adsk.html
STATUS: ADSK was trying to break out of an 11-month base that is within a larger base. However, after the strong move up at the end of February followed by a consolidation in the over the 10 day MVA (37.55) and the pattern high of 40.38, the stock dropped back today. The drop took the stock back to its February range, and it closed right above support of its 50 day MVA (34.95), with volume dropping back below average at 740,900 (average 872,700). We will see if it holds, but it is not a play until it moves back over the 10 day MVA.
RE (Everest Re Group Ltd--$64.29; -0.30; optionable (RE)): Insurance
http://biz.yahoo.com/p/r/re.html
STATUS: Continues to hold support at its 10 day MVA (64.15) with its third consecutive doji in the handle of the 10-week cup base. Volume has dropped off in the handle, up today at 286,500 (average 492,400), and the stock is behaving well. On a breakout over the pattern high of 67.75, we will look at taking positions with stock or options. We like orderly pullbacks on low volume, such as this. Buying looks good as money flow continues its uptrend.
BUY POINT: Breakout: 67.88 on volume of 738,000 or better.
POSITION: Stock and/or July $60 calls to buy (RE GL 12 open interest).
LOW (Lowe's Companies Inc--$59.64; -2.83; optionable (LOW)): Retail
http://biz.yahoo.com/p/l/low.html
STATUS: Broke out of the ascending wedge (that had formed in the upper right side of the stock's base) last week, but after hitting 64.59 on Thursday's intraday high the stock has pulled back. On today's drop the stock caught support at its 10 day MVA (59.28), which is above its pattern highs at 59.55. We are looking for the stock to hold here, watching for a move back up toward the breakout high. Still shows excellent money flow and relative strength. Stops are still at 57.50-57.75 for existing positions.
BUY POINT: Aggressive: On a move back up from here on increased volume (down to 3.46 million today; average 3 million). Safer: A move over the breakout closing high of 62.47, with increased volume.
POSITION: Aggressive: Stock and/or July $55 calls to buy (LOW GK). Safer: Stock and/or July (60 calls to buy (LOW GL).
End Part 2 of 3
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stock watch
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