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us stock market, stock recommendation
Begin Part 2 of 2
THE PLAYS
We closed out the rest of the downside plays Friday in a pre-emptive move as the the market is trying to piece together anupside. Better to take the money off the table when a change in the wind is sensed than let it get out of hand. We are seeing more less well known names making moves, an indication of a bigger move to come, and we have been positioning for that. There are still stocks that are weak, and if they cannot rise with any market bounce they will be the key focus on the downside.
Good moves: ADI; APOL; CKFR; IRM; MSN; NFLX; YHOO
Best Plays:
1) IMCL: Looks ready to resume the move.
2) MCHP: Nice break over the downtrend.
3) SSYS: Very nice pattern.
4) ADI: Making the move.
5) APSG: Good volume surge Friday. Looks ready to continue.
6) SBL: Nice volume move Friday.
7) AIG: Falling on rising volume as the market tries to rally.
New Plays:
Upside:
Play Date: 03/01/2003
DISH (Echostar--$26.33; +0.18; optionable): Satellite systems
http://biz.yahoo.com/p/d/dish.html
STATUS: Cup w/handle. Working in a 2-month handle to the 10-month base showing solid accumulation at 10 up weeks on rising volume to 7 down weeks on rising volume. The past two months accumulation is 2 to 0. Excellent pattern and money flow is out ahead of the price as it works laterally in the handle. Earnings are Tuesday (March 4), and that may be the catalyst to break it out.
Volume: 2.674M Avg Volume: 3.801M
BUY POINT: $27.05 Volume=4.8M Target=$31.12 Stop=$25.16
POSITION: UAB FE - June $25c (64 delta) &/or Stock
http://www.investmenthouse.com/ct/dish.html
Play Date: 03/01/2003
IMCL (Imclone--$13.33; +0.1; optionable): Biotechnology
http://biz.yahoo.com/p/i/imcl.html
STATUS: Testing the breakout. IMCL has a doghouse name, but despite all of the insider selling allegations, it is a viable company and its products continue to show promise. It has revived from the brink of history to form the current 13-week cup w/handle base where it is currently moving laterally over 13, forming the handle on lower, below average volume. It is a very orderly and quiet pullback just as it should be. Accumulation is 5 to 0 (5 up weeks on rising volume to 0 down weeks on rising volume) in the base, and money flow is shooting up ahead of the stock price. This is a very good rest or breather after the strong move up the right side of the base, and we are just waiting for the next move to start to jump in.
Volume: 828.683K Avg Volume: 1.72M
BUY POINT: $13.68 Volume=2M Target=$15.75 Stop=$12.72
POSITION: QCI HV - Aug. $12.50c (65 delta) &/or Stock
http://www.investmenthouse.com/ct/imcl.html
Play Date: 03/01/2003
MCHP (Microchip--$25.45; +0.63; optionable): Semiconductors
http://biz.yahoo.com/p/m/mchp.html
STATUS: Breaking downtrend. MCHP joined the SOX overall in breaking its downtrend Friday on rising, above average volume. Money flow is screaming up ahead of the price. We like this kind of pattern: it rallied up over the 200 day MVA (24.47), came back to test that level, held, and is not jumping up off that test on strong volume. It is ready to go on any market rally.
Volume: 5.35M Avg Volume: 4.414M
BUY POINT: $25.78 Volume=5.5M Target=$29.65 Stop=$23.98
POSITION: QMT GE - July $25c (58 delta) &/or Stock
http://www.investmenthouse.com/ct/mchp.html
Play Date: 03/01/2003
SSYS (Stratasys--$11.53; +0.75; no options): Computer peripherals
http://biz.yahoo.com/p/s/ssys.html
STATUS: Cup w/handle. Making the breakout from a 7-week cup with handle pattern that has formed immediately after the January breakout from an earlier 9-month cup base. The current pattern formed right on top of that bigger base as the market sold off. This is exactly what you want to see: holding the prior move, basing out, then leading the rest of the market higher. Relative strength broke out on the move, and money flow is shooting ahead of price. Accumulation in the recent base is 2 up weeks on rising volume to 0 down weeks on rising volume; solid accumulation on top of great accumulation in the prior base. Very nice pattern and move.
Volume: 111.092K Avg Volume: 63.08K
BUY POINT: $11.64 Volume=110K Target=$13.97 Stop=$10.62
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/ssys.html
Downside:
Play Date: 03/01/2003
HPQ (Hewlett-Packard--$15.85; +0.31; optionable): Computers
http://biz.yahoo.com/p/h/hpq.html
STATUS: Put. PC sales to consumers are expected to rise to highest level in a year, but HPQ is not expecting great things as it missed on revenues and gave a lukewarm forecast. It tanked below the 200 day MVA (16.11) on the news on some huge volume. It spent Thursday and Friday moving back up to test that breakdown, tapping at the 200 day MVA on the Friday high. Volume dropped off on the test, showing less interest on the upside. We are looking for the stock to move up to test the level a bit more on any market pop higher and then roll back over.
Volume: 11.738M Avg Volume: 12.766M
BUY POINT: $15.62 Volume=14M Target=$13 Stop=$16.32
POSITION: HHY QW - May $17.50c (-68 delta)
http://www.investmenthouse.com/ct/hpq.htm
CONTINUING PLAYS:
Upside:
Play Date: 02/24/2003
ADI (Analog Devices--$29.16; +0.82; optionable): Semiconductor
http://biz.yahoo.com/p/a/adi.html
STATUS: Testing the 200 day MVA. Nice volume move Friday after testing the break over the 200 day MVA (26.92). ADI is in a great pattern for a market bounce: has cleared resistance, huge money flow, and relative strength already breaking out. It hit the buy point Friday but is still a buy here.
Volume: 4.762M Avg Volume: 3.414M
BUY POINT: New: 29.32 (orig. $28.45) Volume=3.5M Target=$32.75 Stop=$26.46
POSITION: ADI FE - June 25c (72 delta) and/or Stock
http://www.investmenthouse.com/ct/adi.html
Play Date: 02/18/2003
APOL (Apollo Group--$46.34; +0.87; optionable): Education and training
http://biz.yahoo.com/p/a/apol.html
STATUS: Breakout. APOL has put together back to back strong moves off the 50 day MVA, making our buy point Friday on a solid volume move. It has rallied over $2 the past two sessions, so we might see it come back quickly to test 46, but would not be surprised to see its momentum carry it higher for another session first. APOL is such a strong mover and leader we were excited to see the move up last week. Any test that holds 46 the next few sessions is a good entry point.
Volume: 2.09M Avg Volume: 1.839M
BUY POINT: Still a buy from here on a continued move, then a test toward 46 after that (orig. $46.25). Volume=22M Target=$52.88 Stop=$43.35
POSITION: OAQ HI - Aug. $45c (58 delta) and/or Stock
http://www.investmenthouse.com/ct/apol.html
Play Date: 12/28/2002
APSG (Applied Signal--$13.39; +0.34; no options): Telecom equipment
http://biz.yahoo.com/p/a/apsg.html
STATUS: Testing the breakout. After the strong move Tuesday, APSG moved laterally on low volume and then starting back up Friday on a super shot of volume. Looks ready to continue the run.
Volume: 103.1K Avg Volume: 53.836K
BUY POINT: New: $13.55 (orig. $13.25). Volume=85K Target=$15.55 Stop=$12.04
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/apsg.html
Play Date: 02/26/2003
BBY (Best Buy--$29.07; +0.37; optionable): Consumer electronics
http://biz.yahoo.com/p/b/bby.html
STATUS: Ascending wedge. Trying to make the move, but needs some more volume. Accumulation in the base is positive at 2 up weeks on rising volume to 1 down week on rising volume.
Volume: 2.368M Avg Volume: 4.492M
BUY POINT: New: $29.25 (orig. $28.38). Volume=5M Target=$32.97 Stop=$26.85
POSITION: BBY FE - June $25c (69 delta) and/or Stock
http://www.investmenthouse.com/ct/bby.html
Play Date: 02/04/2003
CGNX (Cognex--$22.7; +0.14; optionable): Scientific & Technical instruments
http://biz.yahoo.com/p/c/cgnx.html
STATUS: Ascending triangle. We continue to look for a breakout from CGNX that continues its strong triangle pattern. Thursday volume surged, and then backed off again on Friday. Excellent accumulation and money flow are setting the stage for the breakout, and we just have to be patient at this point.
Volume: 274.11K Avg Volume: 375.492K
BUY POINT: $23.09 Volume=525K Target=$26.88 Stop=$21.47
POSITION: QCG ED - May $20c (65 delta, low OI) and/or Stock
http://www.investmenthouse.com/ct/cgnx.html
Play Date: 01/28/2003
CKFR (Checkfree--$20.98; +0.51; optionable): Internet software
http://biz.yahoo.com/p/c/ckfr.html
STATUS: Ascending triangle. After a pause internet stocks are looking stronger again, and CKFR never really did sell back, just continued working on its pattern. Friday it tried to make the breakout move off of 20, and though volume rose to average it did not really give us a breakout move. Great accumulation in the 3-month base at 4 up weeks on rising volume to 1 down week with money flow starting to move higher. Looking for a stronger volume move to continue the breakout.
Volume: 1.294M Avg Volume: 1.362M
BUY POINT: New: $21.07 (orig. $20.85). Volume=2M Target=$25 Stop=$18.94
POSITION: FCQ EW - May $17.50c (70 delta) and/or Stock
http://www.investmenthouse.com/ct/ckfr.html
Play Date: 02/27/2003
MEDI (Medimmune--$30.01; +0.35; optionable): Biotechnology
http://biz.yahoo.com/p/m/medi.html
STATUS: Ascending triangle. MEDI is still working at making the breakout from the triangle, rallying off the 50 day MVA (28.60). Thursday volume was solid, coming in at the strongest level in a month, but Friday it was back below average. It stalled again at 30.45 as it did a week ago. Solid accumulation since August, coming in at 7 up weeks on rising volume to 1 down week on rising volume. Money is moving in ahead of the price, running up and leading the way. Looking for that move over 30 that can hold on the close and bring in some volume.
Volume: 3.367M Avg Volume: 4.527M
BUY POINT: $30.25 Volume=6M Target=$34.84 Stop=$28.13
POSITION: MEQ FF - June $30c (53 delta) and/or Stock
http://www.investmenthouse.com/ct/medi.html
Play Date: 02/26/2003
SBL (Symbol Technologies--$10.58; +0.35; optionable): Computer peripherals
http://biz.yahoo.com/p/s/sbl.html
STATUS: Testing the breakout. SBL is starting its move higher of the breakout test, moving on rising volume. That is exactly what you want to see in a successful breakout. Volume has been excellent on the breakout week, something you want to see. Money flow is excellent and relative strength is breaking out as well to go along with the solid accumulation at 3 up weeks on rising volume to 1 down week on rising volume.
Volume: 2.416M Avg Volume: 1.515M
BUY POINT: New: $10.65 (orig. $10.45). Volume=2M Target=$12.25 Stop=$9.72
POSITION: SBL GB - July $10c (59 delta, low OI) and/or Stock
http://www.investmenthouse.com/ct/sbl.html
Play Date: 02/27/2003
SLAB (Silicon Labs--$27.12; +0.95; optionable): Semiconductor
http://biz.yahoo.com/p/s/slab.html
STATUS: Cup w/handle. Nice price move Friday, but volume was still well below average. It is trying to move out of the handle of a 3-month base showing good accumulation in the base at 3 up weeks on rising volume to 0 down weeks on rising volume. This is another chip stock that has broken resistance, Friday taking out the down trendline as well as did the SOX. Looking for more volume.
Volume: 711.195K Avg Volume: 1.232M
BUY POINT: New: $27.38 (orig. $26.94) Volume=1.7M Target=$31.28 Stop=$25.05
POSITION: QFJ GE - July $25c (62 delta) &/or Stock
http://www.investmenthouse.com/ct/slab.html
Play Date: 12/11/2002
YHOO (Yahoo!--$20.85; +0.77; optionable): Internet
http://biz.yahoo.com/p/y/yhoo.html
STATUS: Cup. Blasted through 20 on strong, above average volume just as we wanted. A solid move; a bit aggressive for new positions but a solid move that you can still jump on.
Volume: 11.771M Avg Volume: 8.783M
BUY POINT: New: From here (orig. $17.32; $20.06) Volume=20M Target=$22.75 Stop=$17.74
POSITION: YHZ GW - July $17.50c (71 delta) and/or Stock
http://www.investmenthouse.com/ct/yhoo.html
Downside:
Play Date: 02/20/2003
AIG (American Intl. Group--$49.29; -1.17; optionable): P&C insurance
http://biz.yahoo.com/p/a/aig.html
STATUS: Put. After struggling below the 18 day MVA (50.65) for the last two weeks, AIG started nose down Friday on rising, above average volume. Looks ready to make the move lower regardless of what the rest of the market does.
Volume: 9.574M Avg Volume: 6.478M
BUY POINT: $49.15 Volume=6M Target=$46 Stop=$51.25
POSITION: AIG QJ - May $50p (-47 delta)
http://www.investmenthouse.com/ct/aig.html
Play Date: 02/13/2003
EXC (Exelon--$49.15; -0.54; optionable): Utilities
http://biz.yahoo.com/p/e/exc.html
STATUS: Put. EXC tried one more run at the 50 day MVA (50.52) after failing at that level back in early February. It failed this move as it did the last one. After a couple of below average volume sessions at the 200 day MVA it broke lower Friday on rising, average volume. Looks ready for the plunge lower as the downtrend continues even as the market looks ready to put up a fight.
Volume: 1.325M Avg Volume: 1.343M
BUY POINT: New: $48.97 (orig $49.65) Volume=1.5M Target=$45.55 Stop=$50.85
POSITION: EXC PJ - April $50p (-56 delta)
http://www.investmenthouse.com/ct/exc.html
WATCHLIST/ CONTINUING:
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
$SOX 02/24 Put 297.63 +8.05 285.95 251 0 0 292
Exited. Broke over the 50 day MVA and the down trendline so we closed it out.
ADI 02/24 Test BO 29.16 +0.82 29.25 33.45 4.8M 3.5M 27.25
Current. Nice volume surge as ADI cleared resistance.
AFFX 02/08 Cup hdl 26.38 +0.51 26.55 30.55 814K 1.5M 24.69
Buy Not Issued.
AIG 02/20 Put 49.29 -1.17 49.48 46 9.6M 6M 51.25
Buy Not Issued. Turning down from the 18 day MVA on a surge in above average volume.
AMGN 01/22 A Wedge 54.64 +0.58 53.12 62 11M 20M 52.68
Current. Trying for a new recent high on rising though still below average volume.
APOL 02/18 A Wedge 46.34 +0.87 46.25 52.88 2.1M 22M 43.35
Current.
APSG 12/28 Cup hdl 13.39 +0.34 13.25 15.55 103K 85K 12.04
Current. Held 13 on the 2-day test and started back up on Friday with an excellent volume surge. Still a buy.
ASKJ 12/26 Cup hdl 6.89 +0.29 2.89 8 1.6M 305K 6.08
Current. Tested the 18 day MVA Wednesday and now rallying on rising volume. An add to or buy at this point.
BBY 02/26 A Wedge 29.07 +0.37 28.38 32.97 2.4M 5M 27.45
Current. Moving up though not much volume. Need some volume.
BCGI 02/22 Cup 12.78 -0.19 13.63 16.35 91K 215K 12.68
Buy Not Hit. Struggling some but still at the 50 day MVA.
BLTI 02/10 Test BO 7.96 +0.01 7.2 9.15 874K 300K 6.96
Current. Doji after the big move Thursday. Still in good shape.
BMC 02/19 Cup hdl 19.4 +0.42 19.29 23.15 2M 2.5M 18.15
Current. Held the test of the 18 day MVA and started up off the 10 day Friday. Needs some more volume.
CCMP 02/19 Put 42 +0.36 41.45 37.12 701K 1.2M 44.22
Exited.
CCU 02/24 Put 36.51 +0.99 35.77 31.75 3.1M 4.8M 37.15
Buy Not Issued.
CGNX 02/04 DB hdl 22.7 +0.14 23.09 26.88 274K 525K 21.47
Buy Not Issued.
CKFR 01/28 Cup hdl 20.98 +0.51 20.85 25 1.3M 2M 18.94
Buy Not Hit.
CRAY 02/25 BO 8.53 +0.15 8.32 9.97 1.6M 1.1M 7.74
Buy Not Issued. Big tombstone doji on high volume indicates a turn back down to test near 8.
CVD 12/21 Cup hdl 23.55 +0.6 24.75 29.74 506K 581K 24.25
Current.
CVD 11/05 Test BO 23.55 +0.6 23.65 28 506K 581K 24.88
Current. Tapped the 50 day MVA on the high on volume but fell back to close below that level.
DCX 02/03 Put 30.57 +0.5 31.15 26.55 838K 950K 31.35
Exited.
DISH 03/01 A Wedge 26.33 +0.18 27.05 31.12 2.7M 4.8M 25.16
New.
ESRX 02/18 Put 51.72 -0.2 49.35 36 924K 1.2M 51.55
Exited.
EV 02/15 Put 25.54 -0.46 26.9 23.35 450K 225K 27.45
Exited.
EXC 02/13 Put 49.15 -0.54 49.65 45.55 1.3M 1.5M 50.85
Buy Not Issued.
FDS 02/19 Put 25.59 +0.59 25.45 22.12 302K 300K 26.45
Exited.
GRMN 11/06 Cup hdl 33.35 +0.32 22.34 34 329K 198K 31.88
Current. Nice lateral consolidation over the 10 day MVA on lower, below average volume.
HPQ 03/01 Put 15.85 +0.31 15.62 13 12M 14M 16.32
New.
IDCC 02/25 Test 50 14.38 +0.28 14.62 17.94 342K 850K 13.58
Buy Not Hit. Trying to move out of the lateral consolidation but needs some volume.
IMCL 03/01 Test BO 13.33 +0.1 13.68 15.75 829K 2M 12.72
New.
IRM 02/24 DB hdl 35.2 +1.53 34.75 39.55 674K 389K 32.32
Current. Super move Friday as the volume surged even more and relative strength broke out. Solid.
JDEC 02/22 Put 11.99 +0.31 11.6 9 924K 1.5M 12.18
Buy Not Issued.
JEF 02/15 Put 36.94 +0.84 38 34.08 216K 210K 38.48
Exited.
JPM 02/11 Put 22.68 +0.02 21.68 18 7.6M 12M 22.85
Exited.
LGTO 02/22 A Wedge 5.93 +0.26 6.42 8.25 3.3M 2M 5.88
Buy Not Hit. Volume is surging, but the stock is not though it is holding the pattern.
MCHP 03/01 BO 25.45 +0.63 25.78 29.65 5.4M 5.5M 23.98
New.
MDCO 01/10 Cup hdl 18.94 +0.42 17.35 20.85 609K 800K 17.55
Current. After the strong Wednesday move, MDCO started up again Friday on some rising, above average volume.
MEDI 02/27 A Wedge 30.01 +0.35 30.25 34.84 3.4M 6M 28.13
Buy Not Issued.
MER 02/26 Put 34.08 +0.19 33.08 30 4.7M 8M 34.65
Buy Not Hit. A doji that tapped the 18 day MVA on the high as MER continues to struggle. If it cannot rally in a market move up, it will be primed.
MSN 12/04 Cup hdl 6.58 +0.39 4.85 7.65 1M 150K 5.94
Current. Nice gap higher that ran up to 7 on the high with huge volume. Gave back most of the move but managed to hang onto the 18 day MVA.
MSN 11/23 Cup hdl 6.58 +0.39 4.15 7.65 1M 150K 5.94
Current.
MWD 02/24 Put 36.85 +0.33 35.2 31.94 5.4M 4.8M 37.02
Exited.
NATI 02/15 Test 50 33.68 +0.13 34.05 39 150K 425K 32.45
Current.
NFLX 01/25 Test BO 17.11 +0.61 14.3 17.96 849K 503K 14.35
Current. Still powering higher on above average volume. Ballistic move that will test back at some point, but we look for it to move up the short term MVA.
NSCN 12/22 Pennant 19.53 +0.42 17.24 21.24 3M 1.8M 18.75
Current. Held at 19, bouncing higher on rising, above average volume.
NSM 01/25 Put 17.13 +0.45 13.96 11.95 2.5M 2.8M 14.25
Exited.
OSTK 02/22 Test BO 12.7 -0.25 17.15 20.45 240K 275K 16.65
Current. Finally slowing down in the selling, showing a doji on lower volume Friday. This is one where we are awaiting a bounce back up to 14 for a better exit point. That often happens after a surge of selling or buying; a return to test that gives a better exit.
PLCM 02/22 Put 10.03 +0.29 9.85 8.44 1.5M 1.5M 10.52
Exited.
PNRA 02/12 Put 27.5 +0.1 27.48 24 680K 1.2M 29
Buy Not Issued.
POWI 02/22 Cup hdl 20.83 +0.24 23.05 27.74 541K 750K 21.28
Buy Not Issued. After trying the breakout move Wednesday, POWI reversed. Now trying to regroup and hold the pattern for another move.
PRX 02/08 BO 37.45 +1.3 34.65 40.45 642K 435K 34.15
Blasting higher on a huge volume surge.
QCOM 12/04 Test 18 34.58 +0.36 40.85 50 13M 18M 37
Current. Rallied up to the 18 day MVA on the high and reversed, still unable to break the recent trend. If it cannot rally with the next market pop higher it is an exit.
QCOM 11/07 Test BO 34.58 +0.36 34.78 42 13M 18M 37
Current.
QLGC 11/07 Test BO 35.41 +1.61 41.4 50 8.5M 25M 39.88
Very nice surge on rising volume Friday after making a higher
low above 32.50. Needs to get over 37.50 to have a real chance to move higher.
SBL 02/26 Test BO 10.58 +0.35 10.45 12.25 2.4M 2M 9.72
Current. Nice move on some continued rising, above average volume.
SLAB 02/27 Cup hdl 27.12 +0.95 26.94 31.28 711K 1.7M 25.05
Buy Not Issued. Just needs some volume to really give it a breakout.
SSYS 03/01 Cup hdl 11.53 +0.75 11.64 13.97 111K 110K 10.62
New.
STK 02/19 Cup hdl 23.13 +0.08 24.65 28.45 529K 1M 23.05
Buy Not Hit. Holding above the 50 day MVA as it tries to regroup and try for another breakout. Has held up well.
VRTY 02/18 Cup hdl 16.68 -0.06 16.6 19.94 621K 500K 15.55
Current. Rallied up to 18 Friday and fell back on some rising volume after a nice breakout. Could give a quick test of 16 before advancing further.
WB 01/29 Put 35.48 +0.21 35.28 32.05 2.9M 3.5M 36.05
Exited.
YHOO 12/11 Test 50 20.85 +0.77 17.32 22.75 12M 20M 19.05
Current. Super move, clearing near resistance and a 52-week high on a great surge in above average volume.
Good Investing!
Jon L. Johnson and your Technical Traders Report 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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