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yahoo stock, top stock pick
Begin Part 2 of 2
THE PLAYS:
Reading the Plays: Please note that when we reference the 10, 18, and 50 day moving averages (MVA), those are exponential moving averages (EMA). The 200 day moving average is always simple (SMA). We will note when we reference a particular MVA differently, e.g., a simple 50 day MVA. Please click on the Yahoo and chart links for company and charting information.
Best Plays: What a day for last night's best play puts. To the upside tonight, NDE began a move out of its handle, and a couple of the chips look promising. Some new good-looking stocks: GSPN, DYII, DRI. RESP is back tonight as well, and THQI looks ready to move back up after testing its breakout. As is the norm in this market, new and continued puts are included.
Best Plays:
1) GSPN: Looks ready to roll back up.
2) DYII: A small stock ready to break out.
3) SMTC: A good-looking pattern.
4) NDE: Making a solid move.
5) RESP: Looks ready to move.
6) THQI: Getting ready to move up after its breakout test.
7) Puts: EBAY, AMAT, OEX, DJX
New Plays:
A Rolling Pattern:
GSPN (Globespan--$20.00; -1.19; optionable (GLQ)): Semiconductor
http://biz.yahoo.com/p/g/gspn.html
STATUS: Rolling between 20 and 25, and after showing a doji Thursday (and tapping 19.13 on the low), the stock looks ready to move back up. Volume was slightly higher at 2.2 million (avg. 3.4 million). On a move up from here, we will look at taking positions with stock or options on a roll back up to 25, or even the 50 day MVA (27.64). GSPN formed this pattern at the bottom of 6-month base.
BUY POINT: Stock and/or August $17.50 calls to buy (GLQ HW; 36 open interests).
http://www.investmenthouse.com/cd/gspn.html
A small stock, with average volume of less than 100,000, in a good sector:
DYII (Dynacq--$15.13; +0.57; no options): Health services
http://biz.yahoo.com/p/d/dyii.html
STATUS: This stock is in an ascending wedge pattern, moving up on slightly stronger volume Thursday from a test of the 10 day MVA (on the low of 14.38). Volume came in at 62,900 (avg. 47,000). The pattern formed as the stock corrects from its recent strong run up from January lows near $5. Looking for a breakout over upper resistance in the pattern at 15.50. Initial target: $17-18.
BUY POINT: 15.63, on volume of 64,000 or better. Stop loss: 15.13-15.38.
POSITION: Stock.
http://www.investmenthouse.com/cd/dyii.html
DRI (Darden Restaurants--$23.97; 0.00; optionable (DRI)): Leisure
http://biz.yahoo.com/p/d/dri.html
STATUS: In a cup back with an erratic handle, price rolling up and down over the last two weeks, until the last 2 days, the stock showing consecutive, tight dojis. Thursday's doji came on volume that spiked up to 2.4 million (avg. 728,636), signaling a possible move up in the near future. Currently the dojis are holding above the 10 day MVA (23.59). Handle high is 24.75, so we look for a breakout over that point. The stock shows good money flow and buying, and relative strength is well ahead of price, a bullish sign. Initial breakout target: 27.38 to 28.50.
BUY POINT: 24.88, on continued strong volume (minimum breakout volume is 1 million). Stop loss: 24.38-24.63.
POSITION: Stock and/or July $22.50 calls to buy (DRI GX).
http://www.investmenthouse.com/cd/dri.html
Semiconductor stocks: Still watching the basket, and looking at the following tonight:
Continued Plays:
SMTC (Semtech--$29.75; -0.31; optionable (QTU)):
http://biz.yahoo.com/p/s/smtc.html
STATUS: The stock has pulled back in the kind of orderly manner that we like; a gradual drop back to support on steadily decreasing volume. SMTC showed a tight doji on closing above the 18 day MVA (29.36) after tapping support at the 50 day MVA on the low of 28.38. That is good action, and we anticipate a move up from here or the 18 day MVA on higher volume. The stock hit a high of 37.50 (back over the 200 day MVA at 34.42) on Monday. The pullback is a bit over-extended, but allowances are made for bear markets when the price/volume action is good. Initial target on a move over the 200 day: $38-40.
BUY POINT: Aggressive: On a move up from here or the 18 day (29.36) on rising volume. Stop loss: 29.25-29.50. Breakout: 35.63, on volume of 1.7 million or better (Thursday's volume was 1.4 million; avg. 1.16 million). Stop loss: 35.50-35.75.
BUY POINT: Aggressive: June $22.50 or $25 calls to buy (QTU FR or FE). Breakout: Stock and/or June $30 calls to buy (QTU FF).
http://www.investmenthouse.com/cd/smtc.html
AMD (Advanced Micro Dev--$28.30; +0.60; optionable (AMD)):
http://biz.yahoo.com/p/a/amd.html
STATUS: AMD moved up from its Wednesday test of the 10 day MVA (26.91) even though volume shrank further to 8.6 million (avg. 7.1 million). We like the hold at support, and the steadily decreasing volume suggests the stock can move up from here if it gets the volume. Indeed, AMD was up slightly after hours, on the MU news that second-quarter results topped analyst forecasts (losing a penny instead of a predicted $0.03). We will see what the news can do for the stock tomorrow. Initial target on a move over resistance (30.92, this week's high): $35-36.
BUY POINT: Over 31, on stronger, rising volume. Stop loss: 30.50-30.75.
POSITION: Stock and/or July $22.50 calls to buy (AMD GX).
Updated Stock:
NDE (Indymac Bancorp--$29.00; +0.64; optionable (NDE)): Savings & Loan
http://biz.yahoo.com/p/n/nde.html
STATUS: Began a move up in the handle-type formation to its 3-month saucer base. Volume shot above average to 804,300 (avg. 407,863). We were looking for a possible test of the 27-28 range, but the stock looks ready to continue this move. Handle high if 29.19. The stock shows great money flow and good buying, and relative strength has moved out ahead of price, a bullish sign. Initial target: $32-34.
BUY POINT: Breakout: 29.32, on volume of 612,000 or better. Stop loss: 28.82-29.07.
POSITION: Stock and/or July $25 calls to buy (NDE GE).
http://www.investmenthouse.com/cd/nde.html
RESP (Respironics--$28.75; +0.31; optionable (SBU )): Health services
http://biz.yahoo.com/p/r/resp.html
STATUS: Looks ready to make a move up from its double-handle formation to the 3-month cup base (previous high 34). We will look at taking positions with stock or options on a breakout over the handle high of 29.88. Volume was lower (154,800; avg. 214,090) as RESP bounced up slightly from the 10 day MVA (28.21); on a volume surge, this one is ready. Initial target on a breakout: 33 to 36.
BUY POINT: 30.01, on volume of 321,000 or better. Stop loss: 29.51-29.76.
POSITION: Stock and/or July $25 calls to buy (SBU GE, low open interests).
http://www.investmenthouse.com/cd/resp.html
THE PORTFOLIOS: Each report, we look at these to see which is in a buy position. We don't cover them all each time, just the ones that are looking as if they are ready to pick up a few shares.
THE LEADERS: Some of the new leaders have fallen under the pressure of the bear market and can no longer be considered top picks for such investments (ACS, LLL, NATI, ESRX). We continue to look to stocks like CPN as the new leaders, as they are holding up well. With this in mind, we must reiterate that while we are looking for any of these stocks to once again yield long-term investments when the markets turns, for now the plays for moves up in such stocks should only be considered short-term. We must focus on the stocks that are performing best in a down market as they tend to help lead when the market turns back up.
New Leaders: CPN, SGR (ESRX, NATI, LLL, ACS)
Previous Leaders: ADBE, AMCC, ARBA, BEAS, BRCD, CIEN, EMC, EXTR, GLW, JNPR, NEWP, NTAP, PMCS, SCMR, SEBL, VRSN, VRTS
CPN (Calpine Corp--$55.92; +3.04; optionable (CPN)): Electric Utilities
http://biz.yahoo.com/p/c/cpn.html
STATUS: The stock finally broke solidly from its base, clearing everything on volume that shot higher above average (7.2 million; avg. 3.7 million). The company stated Thursday that it expects to report earnings per share of 20 to 25 cents in the quarter ending March 31, above analysts' forecast of 13 cents. This move is a bit extended for entry points, although on the strength of it the aggressive can look at taking positions for a continued move up. We will look for a test toward the 53 range and move back up. Initial target: $58-61, but we are inclined to let this one run.
BUY POINT: Aggressive: On further upward movement on continued strong volume. Stop loss: 54. Pullback: On a move back up after a test of the 53 range.
POSITION: Both positions: Stock and/or July $50 calls to buy (CPN GJ).
http://www.investmenthouse.com/cd/cpn.html
UP & COMERS PORTFOLIOS: We have added some new stocks to this portfolio: LNCR, BJ, ANF, LOW, HI and THQI. We like the patterns and their earnings numbers, and they are holding up in this market. The currently existing members (EXDS, TQNT, BVSN, SANM, PKI and GMST) are on a current watchlist we will continue to monitor for recovery when the market finally emerges from the bear market.
ANF (Abercrombie & Fitch Co--$32.86; -0.31; optionable (ANF)): Retail: Apparel
http://biz.yahoo.com/p/a/anf.html
STATUS: The stock pulled back the last two days after Tuesday's pop up from a test of the 18 day MVA (32.58). That level was tapped on lows the last 3 days, supporting the stock. Volume Thursday was lower (982,900; avg. 1.6 million) on the close just above that support, so we will see if the stock can bounce from here. ANF has pulled back, generally, over the last week and a half as volume hung at average levels before today's drop. We are looking for the stock to make another break higher in its 2-year base. If it does not, we will look for a continued pullback in a handle that is more proportionate to the size of the base.
BUY POINT: Aggressive: On a bounce on stronger volume. New March high: Over 35.79 (previous high) on volume of 2 million or better.
POSITION: Aggressive: Stock and/or August $30 or $32.50 calls to buy (ANF HF or HZ).
http://www.investmenthouse.com/cd/anf.html
THQI (Thq Inc--$37.44; +0.91; optionable (QHI)): Multimedia & Graphic Software
http://biz.yahoo.com/p/t/thqi.html
STATUS: Pulled back from its breakout Wednesday, and tested lower today at the 10 day MVA (35.42) on lower volume (525,400; avg. 419.045). The stock moved up despite that (volume was still above average), so looks ready to move back up from this breakout test if volume surges back in. If the Nasdaq bounces, we will look for the move. THQI hit a breakout closing high of 38.88. Continued strong money flow and buying, and relative strength has broken out ahead of price. Still looks strong. Initial target: $43-45.
BUY POINT: Over 39 on stronger, rising volume (709,000 or better). Stop loss: 38.50-38.75.
POSITION: Stock and/or June $30 calls to buy (QHI FF).
http://www.investmenthouse.com/cd/thqi.html
MEMBER PORTFOLIO: BRCM, CHKP, CSCO, EMLX, IDTI, INTC, JDSU, MVSN, NT, PWER, SUNW, VTSS
No reports on these stocks tonight.
PUT PLAYS: CHKP and CIEN were our best put plays from last night, dropping over 5 points apiece; we will see if they set back up again in a market bounce. The QQQ, and NEWP and FLEX have also performed. We are looking at stocks that are ready to hit resistance and turn back down again, in addition to EBAY, in the interesting head and shoulders pattern (as was the SOX index recently). As always, keep reasonable loss cutting rules in place, be ready to close positions quickly if necessary, and make sure you see the downside move, along with the market going down as well, and then enter.
New Puts:
EBAY (Ebay Inc--$34.13; -2.06; optionable (QXB)):
http://biz.yahoo.com/p/e/ebay.html
STATUS: The stock is in a head and shoulders pattern, left shoulder from December, head in January/February, and currently forming the right side of the right shoulder, still above the low point in this part of the pattern (31.19). The stock broke below the short term moving averages the last two days on rising volume (hitting 4.37 million Thursday; avg. is 5.1 million). The aggressive can look at playing this one on a move down from here on continued strong volume, with the safer entry point below 30 (lower support in the pattern in the left shoulder) in market selling.
BUY POINT: Aggressive: On a continued move down on strengthening volume. Watch the 31 range if volume is light on the move down. Safer: Below 30 on above average and rising volume.
POSITION: Aggressive: May $45 puts to buy (QXB QI).
http://www.investmenthouse.com/cd/ebay.html
Continued Puts:
AMAT (Applied Materials--$45.56; -2.13; optionable (ANQ)):
http://biz.yahoo.com/p/a/amat.html
STATUS: Began the move down, breaking below the 50 day MVA (46.91) on stronger volume of 34.2 million (avg. 22.5 million). In a market bounce AMAT can move back up to the resistance, but on a weak move, we will look for a turn back down from there, with a target of the March low of 39.06.
BUY POINT: On a move back down after a test of the 50 day MVA (46.91), May $60 puts to buy (ANQ QL).
GLW (Corning Inc--$19.98; -1.49; optionable (GLW )): Telecom
http://biz.yahoo.com/p/g/glw.html
STATUS: Dropped over a point, but on lower volume showed a doji, suggesting a move back up. On a move back up to the 10 day MVA (23.42) on lower volume, we will look for a move back down for possible put positions. The 10 day MVA has held the stock back since late January. Target: The intraday low of 19.65 or lower.
BUY POINT: On a move down from a retest of the 10 day MVA at 23.42, May $25.00 puts to buy (GLW QE).
CTXS (Citrix Systems Inc--$20.25; -0.75; optionable (XSQ)): Internet Software
http://biz.yahoo.com/p/c/ctxs.html
STATUS: Broke support as expected (10 day MVA, 20.77), but volume was lower as the stock showed a loose doji on the move. If the Nasdaq gives a bounce, CTXS can move back up to test the resistance, or even break it for a move to the 18 day MVA (21.64). We are looking for either resistance to turn the stock back down, however, for a move down to a target of 16.88 (March low).
BUY POINT: On a move down after a retest of the 10 day MVA (20.77) or the 18 day MVA (21.64), on rising volume, May $22.50 puts to buy (XSQ QX).
OEX (Standard & Poors 100--$584.90; -3.40; optionable (OEY)):
STATUS: Showed a doji on a smaller move down, with volume lower as well (1.07 million; avg. 1.2 million), so it appears the index may test the 10 day MVA (591.41). We are looking for a turn back down from there for a put down to the 570 range (a short consolidation above the March low of 548.16).
BUY POINT: On a move down after a test of the 10 day MVA (591.41), in market selling, April $595 puts to buy (OEY PS).
http://www.investmenthouse.com/cd/oex.html
DJX (1/100 Dj Indu--$97.99; +0.14; optionable (DJV )):
STATUS: Moved up slightly after Wednesday's stronger-volume drop from the 18 day MVA, showing a tight doji. Volume was lower (1.07 million; avg. 1.2 million) as the stock pulled off a high of 98.83 to close just under resistance (10 day MVA, 98.13). The index is juicy for a move down from here, perhaps after another attempt to move up first. On a move down from the 10 day MVA or after an early pop higher that fails, we will look at buying puts for a target of 91, March low.
BUY POINT: On a move down from here on strong selling volume, May $104 puts to buy (DJV QZ).
Good Investing!
Jon Johnson and The Daily Staff
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 of 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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yahoo stock
top stock pick
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