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us stock market, stock recommendation
Begin Part 2 of 2
Support and Resistance
Nasdaq: Closed at 1468.74
Resistance: Price resistance at 1500 and the 200 day MVA (1502). 1574, the May low, is next.
Support: The August high at 1427. 1418, the interim test after the September 2001. The 10 day MVA (1412) is possible support. The 18 day MVA at 1385. 1357.09, the October 1998 bear market low. July, August, and September interim highs at 1345. The 50 day MVA (1334).
S&P 500: Closed at 930.55
Resistance: Price resistance at 950. 965, the September 2001 closing low along with the August 2002 high. Then price resistance at 990.
Support: The November high at 925.66. 921 is some price support. July, August and September interim highs at 909 to 911. The 10 day MVA is right there at 911 as well. The top of the late October consolidation range at 899 and the 18 day MVA (903). The 50 day MVA (890). The September 2000/May 2001 downtrend line at 877. The March down trendline at 866. 850 to 855 (the October 1997 and Q2 1998 lows).
Dow: Closed at 8804.84
Resistance: A range of resistance from 9000 on up to 9050. The 200 day MVA (9205). 9500 from June and July lows.
Support: The November high at 8800 and then the late July and early September interim high at 8726 to 8762.14 (8745 closing). The 10 day MVA (8617). The 18 day MVA (8539) and then the October high at 8500. The exponential 50 day MVA (8410) and then 8250.
Economic Calendar
11-25-02
Existing home sales, October (10:00): 5.35M expected, 5.40M prior.
11-26-02
Q3 GDP, preliminary (8:30): 3.2% exepcted, 3.1% actual.
Consumer confidence, November (10:00): 83.0 expected, 79.4 prior.
New home sales, October (10:00): 980K expected, 1.021M prior.
11-27-02
Initial jobless claims (8:30): 376k prior.
Personal income, October (8:30): 0.0% expected, 0.4% prior.
Personal spending, October (8:30): 0.2% expected, -0.4% prior.
Michigan sentiment, final, November (9:45): 85.0 expected, 85.0 prior.
Durable goods orders, October (10:00): 3.0% expected, -4.9% prior.
Chicago PMI, November (10:00): 47.5 expected, 45.9 prior.
Fed Beige Book (12:00)
SUBSCRIBERS QUESTIONS
Q: What is the likely future direction of a stock that has risen for several consecutive days (7), but with declining volume each day?
A: Some stocks can run on low volume. They defy the normal logic of needing more buyers to push it higher, but if there are no sellers they can do it as they fly under the radar screen of short sellers. WTW is famous for that and it has some good runs. But it also gets whacked down, and that is the usual result of a low volume ascent. The longer it moves up on low volume, the more likely it will fail, but volume can always kick in. In short, a stock can climb on low volume but the moves tend to be abrupt when a change comes.
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THE PLAYS:
LMLP (LML Payment systems--$9.40; +0.74; no options): Business payment systems
http://biz.yahoo.com/p/l/lmlp.html
STATUS: Cup w/handle breakout. It is hard to argue that business investment is not picking up as these smaller business stocks form good patterns with solid accumulation and start to breakout. LMLP is one of those, showing outstanding accumulation in its 8-month base at 10 accumulation weeks to 4 distribution weeks. Friday it made the breakout move, blasting over the handle high point on massive volume (massive for this stock). Money flow was and is racing up ahead fo the price move, a very good indication. In addition, relative strength is higher now than it was when the stock was over 12 back in March. That indicates the stock is outperforming the large caps right now even as the large caps have enjoyed a good run in this rally.
Volume: 355.61K Avg Volume: 86.227K
BUY POINT: $9.48 Volume=135K Target=$12 Stop=$8.82
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ci/lmlp.html
Play Date: 11/23/2002
MSN (Emerson Radio--$3.71; -0.07; no options): Electronic equipment
http://biz.yahoo.com/p/m/msn.html
STATUS: Cup w/handle. MSN blasted off its lows in August and ran up to over 4. It then started the current base that shows accumulation at 3 weeks to 2 distribution weeks. Electronics are coming back and this is a really nice pattern.
Volume: 110.2K Avg Volume: 120K
BUY POINT: $3.98 Volume=150K Target=$5.48 Stop=$3.7
POSITION: Stock (no option chain)
http://www.investmenthouse.com/ci/msn.html
PECS (PEC Solutions--$34.04; -0.16; optionable): Business management services
http://biz.yahoo.com/p/p/pecs.html
STATUS: Cup w/handle. PECS is in the handle of its 11-month pattern, sporting solid accumulation at 10 up weeks on rising volume to 6 down weeks on rising volume. The price/volume action is good, as volume at the bottom of the base dried up and then surged as the stock formed the right side of its base. The handle has been on mostly lower volume punctuated with a few volume spikes. It is holding on the close above the 18 day MVA in the handle, a sign of support for the stock even as it drifts lower intraday. This sector has really improved, an indication that the business side of the economy is improving. Looks ready for a good breakout.
Volume: 299.549K Avg Volume: 380K
BUY POINT: $36.32 Volume=650K Target=$43.65 Stop=$33.78
POSITION: PQD DF - April $30c (70 delta, low OI) and/or Stock
http://www.investmenthouse.com/ci/pecs.html
VRNT (Verint Systems--$14.25; -0.25; no options): Business software
http://biz.yahoo.com/p/v/vrnt.html
STATUS: Cup w/handle. Another new issue in May, VRNT is currently testing back toward the 10 day MVA (13.45) after it ran up to its high that it hit the first week of trading. The formation of the cup was good with that volume dry-up in August to early October and then the volume swell as the stock ran up the right side of its base in November. This is the first real pullback, and we look for the stock to finish forming the handle this week and then start a breakout drive. Accumulation is very solid at 7 accumulation weeks to just 4 distribution weeks. Friday it showed a hammer doji, but we think it has some more handle formation to do. We will sit back and let it form the base and then show us the breakout.
Volume: 326.127K Avg Volume: 50K
BUY POINT: $14.75 Volume=113K Target=$18 Stop=$13.55
POSITION:
http://www.investmenthouse.com/ci/vrnt.html
CONTINUING PLAYS:
Looking good and ready to move again.
IGEN
NTST
OMX
PPD
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
$OEX 11/01 BO 475.03 -2.83 457.5 485 9.1M 0 458
Current. Opted not to take the gain on the 478 high, waiting for a drift higher this holiday week.
ADI 11/06 Test BO 29.7 -1.29 26.5 32.45 4.3M 5.8M 27.97
Current. Testing back on some lower volume, not reaching the 200 day MVA near 32 on the move.
ALN 11/09 Test BO 8.96 -0.12 7.28 9.75 362K 200K 8.15
Current. Testing the last move higher, being one of the early breakouts in the rally. After a bit of a test further toward 8.50 it will be another add-to point.
AMZN 10/21 cup hdl 23.99 +0.59 20.32 24.38 12M 10M 21.45
Current. Nice move Friday, continuing the recovery off the downgrade (and the breakout as well) on continued rising, above average volume.
ARTI 11/02 Cup 18.61 +1.63 14.85 20 1.2M 150K 16
Current. Resuming the move after the Thursday reversal. Very strong volume and a very solid move.
AVID 10/30 cup hdl 18.63 -0.61 15.65 20.45 433K 177K 17.35
Current. Took some gain Thursday, and now testing back toward the 10 day MVA at 18. Volume was up some but do not think this is a reversal.
BER 11/13 cup hdl 39.21 +0.16 38.4 45 365K 306K 37.65
Current. Up again Friday but lower overall volume.
BMRN 11/21 BO 7.52 +0.11 7.66 10.45 592K 750K 6.94
Buy not hit. Close to the breakout.
BSX 10/19 Test BO 39.96 -1.13 37.75 45.75 4M 3.3M 39
Current. Turned lower on sharply rising volume Friday, something that has been an ominous sign in the health area. If it breaks the 18 day MVA and cannot recover we will not take chances.
CDWC 10/31 cup hdl 52.15 -1.14 53.81 62 1.4M 2.8M 51.74
Current. Nice recovery off the downgrade and then took a breather Friday, holding the 18 day MVA on the close & lower volume. Shaking off the downgrade but still has work to do; needs to get over 54.
CENT 10/15 Test BO 19 -0.5 18.55 22.25 154K 192K 19.05
Current. Tapped at the 50 day MVA on rising volume but recovered to some support at 19. If cannot move back over 19.50 we will exit.
COH 10/22 cup hdl 32.66 -1.09 30.25 36.35 964K 1.5M 31
Current. Gapped higher Thursday and then gave most of it back Friday though volume backed off. Looks like a test of the breakout over 32 should hold.
CREE 11/07 Test BO 22.49 -0.14 19.15 24.45 1.7M 3.9M 19.75
Current. Paused a bit Friday but showed good action rallying after opening lower.
CVD 11/05 Test BO 23.62 +0.61 23.65 28 233K 581K 22.25
Current. Nice move Friday as CVD looks ready to really break loose here.
DELL 11/04 cup hdl 28.61 -0.37 30.55 36 27M 36M 28.41
Current. After being unable to capitalize on the HPQ news, Dell backed down toward the 50 day MVA at 28. Volume was lower, however, and there is support at 28. Needs to hold here.
ECL 10/30 cup hdl 49.98 +0.17 49.11 56.55 530K 1M 46
Buy not issued. Volume picked up late in the week but we held off looking for a more definitive move. Another big volume move over 50 is time to enter.
EXBD 11/11 cup hdl 33.93 +0.22 34.65 40 117K 528K 32.22
Buy not hit. Looks very solid.
EXPE 11/02 cup hdl 75.02 +0.08 70.55 84 2.2M 3.2M 70.45
Current. Nice wedge following the pattern.
FOX 11/05 cup hdl 27 +0.5 27.15 32.45 2.8M 1.5M 25.25
Current. Continuing the solid recovery from that shelf offering announcement.
GYMB 09/18 cup hdl 19.5 +0.08 19.64 22.45 418K 586K 18.27
Still bouncing up the 50 day MVA, but kind of ambiguous here w/the two peaks at 20.
HAR 11/21 Test 18 60.5 +0.59 60.55 70 199K 488K 56.31
Buy not issued. Moving up but no volume.
HLYW 10/14 Test BO 18.44 +0.05 19.45 22 448K 1.2M 18.09
Exited.
HNR 10/17 Test BO 7.28 -0.22 6.38 7.75 163K 288K 6.95
Current. Rougher session Friday, but held the 10 day MVA on the low.
HTCH 11/13 BO 26.59 +0.23 26.61 31.75 511K 351K 24.35
Current. Up on momentum Friday as volume tailed off some. Slowing a bit but still chugging up the 10 day on its third bounce up the short term so still in good shape.
HYSL 11/06 Test BO 29.42 -0.03 28.11 33.75 631K 636K 27.15
Current. Tapped the 10 day MVA and then recovered on solid volume. Good action.
IBM 11/11 Test 50 84.43 -0.47 78.45 88 9.1M 12M 80
Current. Took some gain Friday on the lower volume doji.
IGEN 11/16 DB hdl 38.89 +0.23 38.81 45 144K 300K 35.97
Buy not hit.
IMN 11/22 A Wedge 41.66 -0.02 42.41 48 488K 700K 39.44
Buy not hit. Excellent consolidation.
KLAC 11/05 Test BO 42.85 0 37.86 45 18M 20M 39
Current. Held steady on lower volume. Holding the gains is good.
KLAC 10/19 BO 42.85 0 33.05 45 18M 1.9M 39
Current.
KR 11/09 Put 15.95 +0.45 13.98 12 5.5M 6M 15.01
KRON 11/13 BO 43.51 -0.29 40.12 47.94 524K 450K 40
Current. Big volume as the stock held steady after the big move.
LBIX 10/14 cup hdl 3.71 +0.01 3.22 4.35 34K 145K 3.32
Current. Another doji at the 18 day MVA.
LMLP 11/23 cup hdl 9.4 +0.74 9.48 12 356K 135K 8.82
New.
LXK 10/29 cup hdl 66.17 +0.52 61 72 1.7M 2.2M 62.48
Current. Continued the good action Friday
MSN 11/23 cup hdl 3.71 -0.07 3.98 5.48 110K 150K 3.7
New.
MVL 11/04 BO 9.38 -0.02 8.74 10.75 711K 400K 8.35
Current. Took the day off though volume was still strong. Moving well, however, as TOY showed good earnings.
MXIM 11/09 Test BO 41.9 -0.74 34.25 45 10M 12M 39.94
Current. Like the doji over the 200 day MVA as it may test again and then move up again.
NBIX 10/08 Rv H&S 48.23 +0.13 44.85 51.75 352K 1.1M 44.94
Current. Lower volume move back up to 49. Needs to clear this level as it is already resistance.
NTST 11/14 Test BO 6 -0.05 5.96 7.45 66K 100K 5.54
Buy not hit. Looks very ready.
NVLS 11/19 Test 50 34.4 -1.49 32.26 38 15M 12M 32.45
Current. Took some gain Thursday and riding the rest as it tests back again.
NXTL 11/19 Test BO 13.83 -0.34 13.05 16.15 24M 35M 12.45
Current. Nice tight doji just off the Thursday high. Trying to make a break over 14.
NXTL 11/12 Test 50 13.83 -0.34 12.15 16.15 24M 4.5M 12.45
Current.
NYCB 11/18 Put 29.15 +0.15 27.45 25 698K 950K 28.55
OMX 11/18 A Wedge 5.88 +0.13 5.96 7.11 944K 2.1M 5.54
Buy not issued. Was up on good volume but was backing off its high so we held off. Will be ready this week.
PECS 11/23 cup hdl 34.04 -0.16 36.32 43.65 300K 650K 33.78
New.
PIXR 11/20 BO 58.1 -0.3 57.85 66 495K 775K 53.8
Current. Took a breather on lower, average volume.
PNRA 11/07 cup hdl 35.45 -0.36 34.38 39.75 889K 1.2M 33.96
Current. Nice test of the breakout Friday.
POSS 11/18 Test BO 15.9 +1.02 15.01 18.45 187K 127K 13.75
Current. Recovered well after that higher volume selling Thursday. Nice recovery.
PPD 11/14 Test BO 24.84 -0.11 25.51 30.55 531K 450K 23.72
Current. Testing the 10 day MVA still with another good tight doji on some lower volume. Looks good for another bounce higher.
QCOM 11/07 Test BO 40.68 +0.04 34.78 42 16M 18M 37.75
Current. Held steady Friday on lower volume. Continuing to ride the rest of the positions.
QLGC 11/07 Test BO 43.26 -1.24 41.4 50 16M 25M 39
Current. Decent recovery after gapping lower on the BRCD lukewarm news.
QLGC 08/17 CCall 43.26 -1.24 36.48 0 16M 12M 37
Current.
QQQ 11/02 BO 27.72 -0.01 25.96 28 74M 90M 25.85
Current. Up to near the 200 day. Passed on taking the gain, looking for a drift higher this holiday week.
RINO 10/24 Test BO 16.8 +0.58 17.35 20.75 225K 225K 16.06
Current. Finally recovering, rising on some rising though still below average volume.
RINO 08/28 cup hdl 16.8 +0.58 13.8 20 225K 300K 16.06
Current.
SFAM 11/02 BO 6.18 -0.34 6.09 9 264K 400K 5.42
Current. Testing back toward 6 on some lower volume.
SLE 10/26 Test BO 23.39 -0.09 23.11 27.55 2.3M 3.8M 22.05
Current. Still in that great, lateral consolidation.
SNDK 10/30 cup hdl 26.6 -0.15 21.76 28 5.1M 3M 23.94
Current. Holding the gain.
UOPX 09/23 cup hdl 36.64 +0.25 35.45 42 166K 262K 33.97
Current. Low volume, holding the gains.
UTHR 11/12 DB hdl 17.02 -0.27 17.65 21.45 84K 295K 16.21
Current. Trying to make the breakout but giving back the gains each session. Still like the look of it but the failure to breakout warrants care.
VRNT 11/23 cup hdl 14.25 -0.25 14.75 18 326K 113K 13.55
New.
VRTS 08/19 CCall 19.34 +0.08 19.76 20 9.6M 8.5M 17.45
Current. Performing well for the call play.
VSEA 11/16 Rv H&S 29.85 -0.44 28.03 33 868K 1.4M 27.94
Current. Tested lower but recovered most of the loss.
VZ 11/23 cup hdl 40 -0.64 40.45 45 7.7M 11M 37.62
New buy point.
VZ 10/10 Test 50 40 -0.64 34.75 42 7.7M 10M 37.35
New buy point.
WBSN 11/16 BO 26.12 +1.41 24.94 29.94 740K 1.2M 23.19
Buy not issued. Making the move but on below average volume.
WEDC 10/19 BO 9.81 +0.02 9.45 12 92K 142K 9.35
Current. Tapped resistance at 10 after a low volume move back up. It needs to clear 10 on some volume to continue the move.
WFR 11/14 cup hdl 8.55 +0.01 8.45 11 202K 325K 7.62
Current. Held up well Friday after the solid breakout move.
WOOF 11/16 cup hdl 15.9 +0.01 16.25 19.48 33K 175K 15.11
Buy not hit. Tightening up and looking better.
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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