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us stock market, trade stock
Begin Part 2 of 3
Economic Calendar
1-06-03
ISM services, December (10:00): 55.8 expected, 57.4 prior.
1-07-03
Factory Orders, November (10:00): -0.6% expected, 1.2% prior.
1-08-03
Consumer credit, November (2:00): $3.8B expected, $1.5B prior.
1-09-03
Wholesale inventories, November (10:00): 0.2% expected, -0.3% prior.
1-10-03
Non-farm payrolls, December (8:30): 21K expected, -41K prior.
Unemployment rate, December (8:30): 6.0% expected, 6.0% prior.
Hourly earnings: 0.3% expected, 0.3% prior.
Average workweek: 34.2 expected, 34.2 prior.
SUBSCRIBER QUESTIONS
Q: A question regarding revisted stocks. When a stock that was a previous play that hit the buy point, if we already purchased this stock the 1st time and it comes up as a revisited play, would that be an add to point if it hits the buy point listed on the revisited play. Would that be a strong stock that is testing the breakout?
A: Good question. There is more than one point to buy a good stock. Contrary to what some investment advisors think, a great stock will give you more than one entry point. Stocks run higher then test the moves continually. They breakout, run, test back, run some more. We can use those tests as entry points as long as the stock continues to show good action, i.e., making higher lows and showing good price/volume action as it does (rising on the move up, falling overall on the move back down). We like to focus our money in stocks that are doing well, stocks that are showing accumulation and winning attributes. That way we get more money into winners as opposed to spreading our money too thin in so-so stocks. That is why we were selling several positions before year end to free up money and also book any loss so we could write it off.
For revisited plays that have already hit the buy point we are viewing that as a good entry point for add-to positions or new positions. It is showing continued good action, something we want to take a greater part in. In that sense it is one of the stronger stocks because it continues to show good performance and it is at a point where it is a natural buy. If it continues its ways it will be a solid entry point. At the current time we are riding several stocks well past their target price simply because they are showing very good continued action. We have been letting them run and averaging into more and more positions in the stock as the opportunity is presented.
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THE PLAYS:
Good movers: The week brought some better moves off of the recent selling. AGU; MRK ASKJ; SINA; SYMC; UOPX.
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:
BRCM (Broadcom--$16.5; -0.11; optionable): Communication chips
http://biz.yahoo.com/p/b/brcm.html
STATUS: Testing the 50 day MVA. BRCM peaked in late November, then sold back to the 50 day MVA (15.40) where it traded for the past three weeks. It never collapsed, and after a shakeout early last week it jumped off the 50 day on sharply rising volume Thursday. We were waiting for it to test back to the 50 day just as many stocks did after their first moves coming off the October low. Friday BRCM did just that with a lower volume tap of the 50 day on the low and a rebound to close slightly lower. Looks ready for another move higher from here. We are ready to start some positions for this trade up to the recent high near 21.
Volume: 7.647M Avg Volume: 10.782M
BUY POINT: $16.85 Volume=12M Target=$20.45 Stop=$15.67
POSITION: RCQ EC - May $15c (69 delta) and/or Stock
http://www.investmenthouse.com/cs/brcm.html
SOHU (Sohu.com--$7.08; +0.52; no options): Internet information provider
http://biz.yahoo.com/p/s/sohu.html
STATUS: Breakout. SOHU is one of the group of internet stocks that have been surging since October. It has formed the current 6-week cup base showing accumulation at 3 accumulation weeks to 0 distribution weeks (7 to 0 since September), and Friday provided a solid, above average volume breakout to a two year new high. Money flow matches the stellar accumulation. Looking for more here as these have been providing us great retuns.
Volume: 802.113K Avg Volume: 535.863K
BUY POINT: $7.15 Volume=800K Target=$9 Stop=$6.65
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/sohu.html
STN (Station Casinos--$18; -0.11; optionable): Resorts and casinos
http://biz.yahoo.com/p/s/stn.html
STATUS: Reverse head and shoulders. STN is moving in a big 9-month base showing very solid accumulation at 7 up weeks on rising volume to 3 down weeks on rising volume; that is key because it shows that during the course of the base there are net buyers of the stock and that gives it the support for a good breakout and rally. It is a big pattern, and in theory when it breaks out STN can run the height of the pattern. That would be $7 or to 26. Our initial target is a solid 20%, but we will let it run as long as it looks good, i.e., generally showing rising volume on up weeks and declining volume on down weeks.
Volume: 103.2K Avg Volume: 346.818K
BUY POINT: $19.05 Volume=600K Target=$22.86 Stop=$17.72
POSITION: STN DC - April $15c (86 delta) and/or Stock
http://www.investmenthouse.com/cs/stn.html
SWKS (Skyworks Solutions--$9.32; +0.07; optionable): Semiconductors
http://biz.yahoo.com/p/s/swks.html
STATUS: Testing the breakout. SWKS blasted over the 200 day MVA (8) in late November and has since tested the move, pulling back with the rest of the market in December. It has come to rest on the 50 day MVA (8.79), working laterally along that support the past two weeks. Volume picked up at the end of the week, and it is in good shape to further participate in a move up to the market's next resistance point. Accumulation is 12 accumulation weeks to 6 distribution weeks since March. Money flow is showing a big positive divergence as it is a much higher level now (and rising above the price) than it was when the stock price was higher in early 2002. Looking for SWKS to provide a move higher as the market and chips try a further recovery up to next resistance.
Volume: 2.525M Avg Volume: 5.176M
BUY POINT: $9.55 Volume=5M Target=$12 Stop=$8.68
POSITION: GAK EU - May $7.50c (78 delta) and/or Stock
http://www.investmenthouse.com/cs/swks.html
Downside:
TECH (Techne--$28.16; -0.83; optionable): Biotechnology
http://biz.yahoo.com/p/t/tech.html
STATUS: Put. TECH is breaking down below the 200 day MVA (29.34) after a volatile three weeks of trading around that level. It tried to recover in late December, but rolled over. It bounced up last week but then Friday TECH was turned back and sold on a sharp increase in volume. The selling recently has been on higher volume while the recovery sessions were on much lower, below average volume. Not any accumulation to pick the stock back up. There is support at 28 where the stock tapped Friday. On a break below that on continued strong volume we will move in as the door is opened at that point for a further drop.
Volume: 626.235K Avg Volume: 434.09K
BUY POINT: $27.88 Volume=400K Target=$24 Stop=$29.21
POSITION: TGQ NF - Feb. $30p (-60 delta) or TGQ PF - April $30p (-53 delta)
http://www.investmenthouse.com/cs/tech.html
CONTINUING LEADER PLAYS
Upside:
Play Date: 12/30/2002
AGU (Agrium--$11.64; +0.24; optionable): Agricultural chemicals
http://biz.yahoo.com/p/a/agu.html
STATUS: Breakout trading range. AGU made the solid volume breakout Friday, surging through the pattern high on the heels of good accumulation and super money flow. This is the move we wanted, and the stock is still well within the buy range.
Volume: 638.9K Avg Volume: 236.09K
BUY POINT: New: $11.75 (orig. $11.55) Volume=357K Target=$13.85 Stop=$11.05
POSITION: AGU DB - April $10c (70 delta, low OI) and/or Stock
http://www.investmenthouse.com/cs/agu.html
Play Date: 12/19/2002
ESPD (Espeed Inc.--$18.08; +0.4; optionable): Internet software
http://biz.yahoo.com/p/e/espd.html
STATUS: Testing the breakout. ESPD has been moving off the 18 day MVA the last four sessions, making the price move we wanted, but not giving the big boost in volume that shows there is a lot of backing to the move. We were close to venturing some positions Friday but held off as the stock traded a bit off of the session high (18.50). We are looking for a strong volume move early this week as the rest of the investors come back from holiday. That will get us into positions. Excellent accumulation at 10 accumulation weeks to 4 distribution weeks.
Volume: 316.9K Avg Volume: 477.772K
BUY POINT: New: $18.15 (orig. $17.45) Volume=675K Target=$21.45 Stop=$16.03
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--$42.2; -0.37; optionable): Scientific & technical instruments
http://biz.yahoo.com/p/i/igen.html
STATUS: Testing the 18 day MVA. A good mover off of the October low, IGEN formed a double bottom with handle that broke out in early December on a massive breakout. It rallied to over 44 since then and is now making its first real test of the short term MVA. Stocks typically do this after breaking out, running up the short term MVA 4 to 5 times before correcting a bit deeper. Friday IGEN showed a tight doji right above the 18 day MVA. Looks ready to continue the move from here.
Volume: 263.644K Avg Volume: 246.409K
BUY POINT: $43.05 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
Play Date: 11/30/2002
RHD (RH Donnelley--$28.96; -0.09; optionable): Research services
http://biz.yahoo.com/p/r/rhd.html
STATUS: Cup w/handle. RHD is moving in the handle of its larger 8.5 month base. The handle has tested the 50 day MVA on the low (now near 28.75), moved higher, and now RHD has pulled back to the 10 day MVA and is showing a tight doji. It looks ready to make the breakout move from its base that sports solid accumulation. Money flow continues to run up ahead of the stock price, paving the way for a breakout.
Volume: 123K Avg Volume: 131.909K
BUY POINT: $30.17 Volume=267K Target=$25.94 Stop=$28.06
POSITION: RHD EE - May $25c (80 delta) and/or Stock
http://www.investmenthouse.com/cs/rhd.html
Play Date: 01/02/2003
SYMC (Symantec--$43.85; +1.17; optionable): Internet security software
http://biz.yahoo.com/p/s/symc.html
STATUS: Testing the 50 day MVA. Continued the move off of the 50 day MVA, providing even more above average volume on the move Friday. This is what we wanted and it is still not out of the buy zone as there is some additional resistance to cross at 44 from the mid-December 'hump' in the pattern. New positions can be taken on that move. SYMC was an early leader in the rally, and it has spent the past 5 weeks testing back to the 50 day MVA (40.85), consolidating the strong move off the September low. It tapped the 50 day in early December, bounced, and has now come back to tap it again. It has formed a neat little double bottom that is forming in quite a few leaders, and we are using this pattern on the 50 day MVA test to take some positions in what has been a strong stock in this rally.
Volume: 3.026M Avg Volume: 3.622M
BUY POINT: New: $44.55 (orig. $43.05) Volume=4.1M Target=$51 Stop=$40.04
POSITION: SYQ DH - April $40c (79 delta) and/or Stock
http://www.investmenthouse.com/cs/symc.html
Play Date: 11/30/2002
UNTD (United Online--$16.54; +0.55; optionable): Internet software
http://biz.yahoo.com/p/u/untd.html
STATUS: Ascending wedge. Shaping up very well, forming a 5-week ascending triangle. Looking for a breakout to kick off the next strong move up.
Volume: 434.025K Avg Volume: 827.227K
BUY POINT: New: $17.05 (orig. $16.25) Volume=1M Target=$20.50 (new) Stop=$15.55
POSITION: QAB CC - Mar. $15c (65 delta, low OI) and/or Stock
http://www.investmenthouse.com/cs/untd.html
Downside:
Play Date: 12/09/2002
HSIC (Henry Schein--$44.8; -0.8; optionable): Wholesale medical equipment
http://biz.yahoo.com/p/h/hsic.html
STATUS: Put. HSIC continues to struggle below the 50 day MVA (46.55) and at the 18 day MVA (45.07), unable to hold a move higher. The inability to move up as the market rallied exposed its weakness, but we still want to see the breakdown on a big volume spike. Volume was up on the Friday selling, but still well below average.
Volume: 469.267K Avg Volume: 618.59K
BUY POINT: $44.15 Volume=667K Target=$40 Stop=$46.05
POSITION: HQE NI - Feb. $45p (-47 delta, low OI)
http://www.investmenthouse.com/cs/hsic.html
Play Date: 12/22/2002
URBN (Urban Outfitters--$23.36; -0.73; optionable): Apparel stores
http://biz.yahoo.com/p/u/urbn.html
STATUS: Put. URBN tried to make it over the short term MVA (18 day MVA at 24.23), but after the low volume rise to that level, Friday URBN rolled over at the 18 day and sold back on some rising though still below average volume. Want to see more volume on a further breakdown though the stock remains under distribution.
Volume: 199.835K Avg Volume: 409.772K
BUY POINT: $23.36 Volume=500K Target=$20.22 Stop=$24.65
POSITION: URQ OE - Mar. $25p (-49 delta)
http://www.investmenthouse.com/cs/urbn.html
NEW PRE-ANNOUNCEMENT PLAYS
Play Date: 11/13/2002
COLM (Columbia Sportswear--$45.24; -0.93; optionable): Sportswear. Forecast to announce a split 1-30-03 after the market closes in conjunction with earnings or on 2-6-03 in conjunction with a board meeting. The company has not confirmed the date for the board meeting, but based upon our research this is the date for the meeting.
BACKGROUND: Last announced a 3 for 2 split on 5-2-01 in conjunction with a board meeting. The stock price was $70. The annual shareholder meeting was on 5-16-02 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/c/colm.html
STATUS: Test 50 day MVA. COLM made a big jump off the 50 day MVA at 43 early last week, then surging Thursday on some impressive volume. Friday the retail sector was hit with a few worries with the HD and RSH warnings, and COLM took a breather on lower, below average volume but still managed to hold the 10 day MVA on the close. We are looking for the move to resume this week and will pick up COLM as it comes off the 10 day MVA on some good volume.
Volume: 304.724K Avg Volume: 349.227K
BUY POINT: New: $46.55 (orig. $41.96) Volume=389K Target=$48.45 Stop=$44.25
POSITION: TQQ DH - April $40c (60 delta, low OI) and/or Stock
http://www.investmenthouse.com/cs/colm.html
Play Date: 10/08/2002
NBIX (Neurocrine Biosciences--$45.06; -0.35; optionable): Forecast to announce a split on 2-4-03 in conjunction with earnings. At this time the company has not confirmed this date, but based upon our research this is the date for the announcement.
BACKGROUND: Based upon our research it does not appear that NBIX has ever split its stock. The annual shareholder meeting was on 5-23-02 at which time no additional shares were authorized. The company has sufficient shares for a 3 for 2 split.
http://biz.yahoo.com/p/n/nbix.html
STATUS: Testing the 50 day MVA. A leader off the July low, NBIX ran into resistance at 50 in late December (old high at 54) and fell back on lower, below average volume. The stock still shows solid accumulation in the big, 12-month base at 14 accumulation weeks to 6 distribution weeks. Very solid accumulation to support the stock and money flow continues to lead the stock higher even on this price pullback. The pullback has been on much lower volume than the last surge, and that continues the good price/volume action. Thus we are looking to use this test of the 50 day MVA (44.78) to hold and provide an entry point for new positions on this play.
Volume: 330.266K Avg Volume: 584.863K
BUY POINT: New: $46.15 (orig. $44.85) Volume=750K Target=$55 Stop=$45.45
POSITION: UOT EI - May $45c (57 delta, low OI) and/or Stock
http://www.investmenthouse.com/cs/nbix.html
End Part 2 of 3
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