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us stock market, trade stock
Begin part 2 of 3
Economic Calendar
12-30-02
Existing home sales, November (10:00): 5.69M expected, 5.77M October.
12-31-02
Consumer confidence, December (10:00): 86.0 expected, 84.1 November.
Chicago PMI, December (10:00): 52.8 expected, 54.3 November.
1-02-03
Auto and truck sales
Initial jobless claims (8:30): 384K expected, 378K prior.
ISM Index, December (10:00): 50.2 expected, 49.2 November.
1-03-03
Construction spending, November (10:00): 0.1% expected, 0.3% October.
TEAM TRADES
ESRX: After hitting a high in October, ESRX fell thorugh the 50 day MVA in early November and has since ridden down the short term MVA. After a sharper dip a week ago it made a reaction move up to test the 18 day MVA. Friday it started back down. We viewed the test of the short term MVA as an entry point and moved in before the close. The options were trading at 4.50 by 4.60. As we were putting in the order the stock bumped up and the ask shifted to 4.50. The order was already sent and somehow the fill came in lower than our limit price even though the option was thinly traded. We waited on this one because we wanted to see how the stock was going to finish. It was trying to buck higher toward the session end, but it failed on the attempt, a final sign of weakness.
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THE PLAYS:
Good moves: AIG
In each report we prepare full write-ups for those that look ready to move. If the move has been made already we discuss the play in the summary table. The purpose is to focus on the next good movers.
NEW PLAYS: Splitting stocks are often market leaders and thus we do not just focus on them at points where they are expected to announce or before they actually split. They provide many opportunities to invest in them and this section is where we can look at some former split stocks and other stocks that are in good position to make us money. In addition, there are emerging trends in the recent move off of the double bottom, and we want to capture those stocks emerging from the obscurity as well.
Upside:
AVCT (Avocent--$22.09; -0.4; optionable): Computer peripherals
http://biz.yahoo.com/p/a/avct.html
STATUS: Cup w/handle. Not near a new high, but a solid pattern with accumulation at 11 accumulation weeks to just 4 distribution weeks in the base. Moreover, AVCT can give us a very nice move and lock us in a nice gain without even having to move over the high in the pattern. That is always a plus in this rather volatile market that is trying to decide what it is going to do. AVCT has formed its handle, holding above he 50 day MVA on very low volume the past week. With money flow ahead of the stock price and the support from that solid accumulation, we are looking for AVCT to bounce soon and give us that good move.
Volume: 158.708K Avg Volume: 570K
BUY POINT: $23.08 Volume=750K Target=$27 Stop=$21.46
POSITION: QVX ED - May $20c (68 delta) and/or Stock
http://www.investmenthouse.com/cs/avct.html
Downside:
Downside: We are looking at downside given the continued lethargy in the market, but are focusing stil on stocks in continuing downtrends or stocks that have crashed through support. With the market at an important juncture, it could rebound and thus we do not want to play mere pullbacks to to the downside but want to see stocks in serious trouble.
MLHR (Herman Miller--$18.15; -0.26; optionable): Business equipment
http://biz.yahoo.com/p/m/mlhr.html
STATUS: 50 day MVA breach. MLHR fell below the 50 day MVA (18.80) four sessions back. This move followed a double test of the 200 day MVA (19.92) in December that failed. After breaking the 50 day, MLHR tested it on Thursday's high, and then fell further Friday. There is some support at 18, and we are looking for MLHR to break that level before entering and then letting it work lower for us as it stair-steps down the short term MVA.
Volume: 165.959K Avg Volume: 435K
BUY POINT: $17.94 Volume=425K Target=$15.85 Stop=$19.05
POSITION: MHQ ND - Feb. $20p (-73 delta, low OI)
http://www.investmenthouse.com/cs/mlhr.html
WGO (Winnebago--$40; -0.72; optionable): Motor homes
http://biz.yahoo.com/p/w/wgo.html
STATUS: Testing breakdown. WGO has faced a reversal of fortunes, crashing below the 200 day MVA a week ago (43.13) and spending the rest of the move trying to hold on at 40. This lateral move does not show much strength, and we look for WGO to fall from here to the next support level at 36 for a nice gain.
Volume: 153K Avg Volume: 295K
BUY POINT: $39.49 Volume=270K Target=$36 Stop=$41
POSITION: WGO NI - Feb. $45p (-46 delta, low OI)
http://www.investmenthouse.com/cs/wgo.html
New Post-Split
APOL (Apollo Group--$44.25; -0.43; optionable): Education and training
http://biz.yahoo.com/p/a/apol.html
STATUS: Cup w/handle. APOL is UOPX' parent company, and APOL is forming up a very nice 10-week base with the last week forming a low volume handle consolidation. Accumulation since it started the run leading up to this base is solid at 5 up weeks on rising volume to 0 down weeks on rising volume. This is a stock that can fly like the wind when it gets underway. Looking for a strong volume breakout to enter positions.
Volume: 817.882K Avg Volume: 2.4M
BUY POINT: $45.61 Volume=3.5M Target=$54.75 Stop=$42.42
POSITION: OAQ EI - May $45c (55 delta) and/or Stock
http://www.investmenthouse.com/cs/apol.html
HTLD (Heartland Express--$22.65; +0.22; optionable): Trucking
http://biz.yahoo.com/p/h/htld.html
STATUS: Cup w/handle. Working through the handle to a 6-month base sporting excellent accumulation at 8 up weeks on rising volume to just 3 down weeks on rising volume. That is very positive underlying buying, and with the steadily improving economy, trucking companies are one of the basic elements to that expansion as they move the goods all across the country.
Volume: 82.311K Avg Volume: 160K
BUY POINT: $23.28 Volume=240K Target=$27.94 Stop=$22.05
POSITION: QHK FD - June $20c (73 delta, no OI) and/or Stock
http://www.investmenthouse.com/cs/htld.html
CONTINUING LEADER PLAYS
Upside:
ASKJ (Ask Jeeves--$2.46; -0.12; no options): Business software and web help
http://biz.yahoo.com/p/a/askj.html
STATUS: Cup w/handle. Tested lower Friday, bouncing off of support on the low at 2.40 as volume continued at very low levels. This is the handle to its year-long base showing accumulation at 8 accumulation weeks to 1 distribution week. Just waiting for the breakout as internet stocks have been quiet rally leaders
Volume: 56.685K Avg Volume: 202.454K
BUY POINT: $2.89 Volume=305K Target=$3.88 Stop=$2.44
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/askj.html
Play Date: 11/23/2002
ATRS (Altiris--$14.12; +0.13; no options): Application software
http://biz.yahoo.com/p/a/atrs.html
STATUS: Ascending wedge. Edged higher still on Friday as volume crept up as well. ATRS is on the verge of the breakout, holding up very, very well in all of the selling. Super money flow and a relative strength breakout accompany the outstanding accumulation (9 accumulation weeks to 2 distribution weeks). Patiently waiting.
Volume: 61.293K Avg Volume: 143.318K
BUY POINT: $14.05 Volume=200K Target=$18 Stop=$19.96
POSITION: Stock (no option chain)
http://www.investmenthouse.com/cs/atrs.html
Play Date: 12/11/2002
BSTE (Biosite--$34.48; -0.52; optionable): Diagnostic substances
http://biz.yahoo.com/p/b/bste.html
STATUS: Testing the breakout. BSTE made the move and in the recent selling has pulled back to the 10 day MVA on lower volume. Givne all the odwnside action, that is very positive trade as BSTE holds over the recent breakout point as it tests the move. That is a sign of a stronger stock, and now we look for BSTE to hold the line and start up on rising volume. That will be a signsl for new entry points.
Volume: 291.554K Avg Volume: 626.409K
BUY POINT: New: $35.05 (orig. 34) Volume=900K Target=$41.25 Stop=$33.22
POSITION: BQS DF - April $30c (70 delta, low OI) and/or Stock
http://www.investmenthouse.com/cs/bste.html
Play Date: 11/05/2002
CVD (Covance--$24.63; +0.13; optionable): Business research services
http://biz.yahoo.com/p/c/cvd.html
STATUS: Testing the 18 day MVA. Even better volume Friday in a poor market, CVD managed a new closing high on this move though it gave back gains from the high at 25. Still a leader and moving up ahead of the rest of the market. Could be a harbinger of an oversold bounce for the rest of the market that simply gives this stock another leg up.
Volume: 436.1K Avg Volume: 403.409K
BUY POINT: New: 24.70 (orig. $23.65) Volume=581K Target=$28 Stop=$22.25
POSITION: CVD ED - May $20c (68 delta, low OI) and/or Stock
http://www.investmenthouse.com/cs/cvd.html
Play Date: 12/19/2002
ESPD (Espeed Inc.--$16.9; -0.16; optionable): Internet software
http://biz.yahoo.com/p/e/espd.html
STATUS: Testing the 18 day MVA. After a big move up a week back ESPD has fallen back some in the market selling, tapping the 18 day MVA on the Friday low (16.75). Volume has been low on the pullback and money flow has remained strong as it does. Very solid relative strength in a selling market and we anticipate ESPD will bounce right back.
Volume: 224.7K Avg Volume: 545K
BUY POINT: $17.81 Volume=675K Target=$21.45 Stop=$16.11
POSITION: ENU EC - May $15c (73 delta) and/or Stock
http://www.investmenthouse.com/cs/espd.html
Play Date: 12/19/2002
IGEN (Igen International--$43.55; -0.09; optionable): Scientific & technical instruments
http://biz.yahoo.com/p/i/igen.html
STATUS: Testing the 10 day MVA. IGEN surged higher Monday on strong volume, but as the market sold late in the week it came back some as well, though on very low volume. It was an orderly pullback, and Friday IGEN tested the 10 day MVA on the low (42.80) and bounced up to show a very tight doji on the candlestick chart. This has the look of a quick test of the breakout an we are looking at additional positions here (new can be taken as well) as we average up into a winner as opposed to putting more money in a declining stock.
Volume: 158.888K Avg Volume: 250K
BUY POINT: New: 43.85 Volume=450K Target=$49.55 Stop=$42.05
POSITION: GQ FH - June $40c (66 delta) or GQ CH - Mar. $40c (64 delta) and/or Stock
http://www.investmenthouse.com/cs/igen.html
VOXX (Audiovox--$10.77; -0.08; optionable): Wholesale electronics
http://biz.yahoo.com/p/v/voxx.html
STATUS: Testing the 18 day MVA. Still testing that breakout with a nice lateral pullback to the 18 day MVA. Friday VOXX showed a very tight hammer doji right on top of the 18 day MVA. After a pullback that often indicates a move back up in the making. Accumulation since it formed and broke out of its most recent base is excellent at 8 up weeks on rising volume to just 2 down weeks on rising volume. Looks ready to make the move.
Volume: 57.649K Avg Volume: 87.409K
BUY POINT: $11.35 Volume=131K Target=$13.75 Stop=$10.56
POSITION: UXX DB - April $10c (68 delta) and/or Stock
http://www.investmenthouse.com/cs/voxx.html
Play Date: 12/17/2002
VSAT (Viasat--$12.3; +0.02; optionable): Telecom equipment
http://biz.yahoo.com/p/v/vsat.html
STATUS: Testing the breakout. VSAT is moving in a very tight, lateral consolidation the last week after making a breakout move from the small ascending wedge that worked as an interim point in its current 9-month cup base. Volume was good on the break a week back, but the market selling stalled the move. Still, it held its gains, a very good sign as the overall market sold off. Friday saw a strong surge in volume as VSAT held steady in its consolidation. Looks ready for the next leg higher.
Volume: 185.394K Avg Volume: 220K
BUY POINT: $12.26 Volume=320K Target=$15.45 Stop=$11.35
POSITION: IQS EB - May $10c (70 delta) and/or Stock
http://www.investmenthouse.com/cs/vsat.html
Downside:
Play Date: 12/18/2002
ESRX (Express Scripts--$47.92; -0.8; optionable): Mail order prescriptions
http://biz.yahoo.com/p/e/esrx.html
STATUS: Continuing downtrend. Last week ESRX rallied up to its 18 day MVA, but it did so on low volume. Friday ESRX tapped the 18 day MVA once again on its high (48.90) and then rolled over. That is the move we were looking for and we stepped in. Now on further selling it is still a buy.
Volume: 967.369K Avg Volume: 2.0M
BUY POINT: $48.02 Volume=1.5M Target=$44 Stop=$49.05
POSITION: XTO NJ - Feb. $50p (-51 delta)
http://www.investmenthouse.com/cs/esrx.html
Play Date: 12/22/2002
URBN (Urban Outfitters--$22.67; -0.54; optionable): Apparel stores
http://biz.yahoo.com/p/u/urbn.html
STATUS: Put. URBN started down Friday on some rising though still below average volume after collapsing through the 50 day MVA just below 25 the prior week. The weak move up failed below resistance at 24, and on further selling this is still a good entry point.
Volume: 269.097K Avg Volume: 390K
BUY POINT: New: 22.55 (orig. $23.36) Volume=500K Target=$20.22 Stop=$24.65
POSITION: URQ OE - Mar. $25p (-49 delta)
http://www.investmenthouse.com/cs/urbn.html
PRE-ANNOUNCEMENT PLAYS
BSX (Boston Scientific--$42.08; -1.26; optionable): Medial supplies. Forecast to announce a split on 2-4-03 in conjunction with earnings. The company has not confirmed this date, but based upon our research this is the date for the announcement
BACKGROUND: Last announced a 2 for 1 split on 8-27-98 at a stock price of $40. The annual shareholder meeting was on 5-7-02. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/b/bsx.html
STATUS: New high. After breaking to a new high last week, BSX immediately fell to some selling, pushing it back to some support at 42. This is a point where BSX may try to make that deeper test toward the 50 day MVA just over 40 after a long move up the short term MVA. That is normal action, and as long as volume stays under control we are willing to let stock plays make that test. When it holds 40 and starts up that is a very good entry point.
Volume: 1.28M Avg Volume: 2.593M
BUY POINT: New: After a test of 40 and a bounce up from there on rising volume (orig. $37.75) Volume=3.3M Target=Initial $45.75 Stop=$40.55
POSITION: Stock for now.
http://www.investmenthouse.com/cs/bsx.html
Play Date: 12/21/2002
SYK (Stryker--$65.57; -0.98; optionable): Medical supplies and instruments. Forecast to announce a split early 2003. We are still pinpointing a date.
Background: Last announced a 2:1 split in March 2003 at a price of $65.
http://biz.yahoo.com/p/s/syk.html
STATUS: Reverse head and shoulders. On the verge of the breakout from the pattern Thursday, SYK took a day off Friday with most other stocks, testing down to the 10 day MVA in the selling. This is the 'one more test' we talked about Thursday, and now we look for the move up and breakout. Accumulation during the consolidation is solid at 3 up weeks on rising volume to 1 down week on rising volume.
Volume: 382K Avg Volume:813.545K
BUY POINT: $67.53 Volume=1.2M Target=$77.62 Stop=$62.84
POSITION: SYK FM - June $65c (70 delta) and/or Stock
http://www.investmenthouse.com/cs/syk.html
Play Date: 10/28/2002
WFMI (Whole Foods Market--$52.9; -0.43; optionable): Health food grocery. Forecast to announce a split on 2-12-03 in conjunction with earnings. The company has not confirmed this date, but based upon our research this is the date for the announcement.
BACKGROUND: Last announced a 2 for 1 split on 5-10-01 in conjunction with a board meeting. The stock price was $50.40. The annual shareholder meeting was on 3-25-02 at which time authorized shares were increased. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/w/wfmi.html
STATUS: Testing the breakout. WFMI continues to work laterally after the strong breakout, holding the 18 day MVA on the Friday close as volume ticked higher but was still below average. WFMI has undergone some selling pressure the past week but has held on well nonetheless. This test lower after the lateral move could be a shakeout of the last few sellers.
Volume: 518.604K Avg Volume: 760.863K
BUY POINT: New: 54.05 (orig. $50.11) Volume=975K Target=Initial $57.51 Stop=$49.94
POSITION: FMQ BI - Feb. $45c (64 delta) and/or Stock
http://www.investmenthouse.com/cs/wfmi.html
End Part 2 of 3
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