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Begin Part 2 of 2
THE PLAYS: All we can say is check them out!
All prices reflect prices at the close on Wednesday.
BEST PLAYS: What a day: AA and VAR broke out, and RDN and OMG both moved up nicely, all formerly covered stocks. BMET and PDII, new plays from last night's update, made good moves. PX broke out as well, with KNT, DGX, SNPS, GE, STT, QCOM, and ADVS looking great.
Best Plays:
1) PX: Still a buy on the breakout.
2) DVA: Making a move up after its test.
3) OO: Ditto.
4) HOTT: Looks ready for a move.
5) FMX: Getting ready for a breakout.
6) KNT: Moving up in the handle.
7) DGX: Making a breakout move.
8) SNPS: A breakout move.
9) UNFI: A star doji at the base of the handle.
10) GE: A strong move.
11) QCOM: Looking good here.
READY TO BREAK TO A NEW HIGH (or just did): Watchlist: RDN, LEN
New Play (from Monday):
LTR (Loews--$71.60; +0.10; optionable (LTR): Insurance
http://biz.yahoo.com/p/l/ltr.html
STATUS: Inched up after making a promising move from the lateral consolidation Tuesday. Showing a doji on stronger volume (901,800; avg. 634,181), if it cannot rally up from here we will look for the move after another test the 10 day MVA first (69.71). Most of the gains on another move up will be made from the point of breakout. Money flow is huge into the stock and buying looks good. Target: $76.
BUY POINT: Up from support (70 level) on rising volume. Stop: 64.83.
POSITION: Stock and/or June $65 calls to buy (LTR FM).
BREAKOUTS:
New Plays (from the weekend):
AREM (Aremissoft--$13.28; -1.65; optionable (UKM): Software
http://biz.yahoo.com/p/a/arem.html
STATUS: The stock tanked Tuesday on huge selling; the company claimed that misinformation was spread by "unscrupulous short sellers" in order to capitalize on falling stock price. We were looking for a continued move up after the breakout from the head and shoulders pattern, but since the stock is continuing to sell down, no new positions.
OCLR (Ocular Sciences--$23.43; +0.33; optionable (QLO): Health services
http://biz.yahoo.com/p/o/oclr.html
STATUS: Tacked onto the strong surge up the stock got Tuesday. Volume remained heavy today though slightly down at 373,400 (avg. 131,636). The stock can certainly inch higher due to the high volume, but we prefer to look for another entry point after a pullback. This was an excellent breakout, the stock hitting our target at $23.
BUY POINT: Pullback: On a move back up after a test of the 20-21 range. Stop loss: 18.60 (50 day MVA is at 18.01).
POSITION: Stock and/or July $17.50 or $20 calls to buy (QLO GW or GD).
Continued Plays:
PX (Praxair--$51.98; +2.27; optionable (PX): Chemicals
http://biz.yahoo.com/p/p/px.html
STATUS: Broke out of the ascending wedge on strong volume (2 million; avg. 896,954).
The stock remains a buy, still within 5% of the buy point of 50.33. The stock shows great money flow and high relative strength. Target: $55-57.
BUY POINT: Remains a buy up to 52.85. Stop: 48.34 (just below the 18 day MVA at 48.75).
POSITION: Stock and/or July $50 calls to buy (PX GJ).
TESTS OF THE BREAKOUT: Some of these stocks are moving back on low volume to test the breakout. We often take profits on option plays when they start to pullback on the breakout move and then get back in when the stock bounces up off of the breakout point. This second move is where some of the biggest gains are made.
New Play (from the weekend):
DVA (Davita--$18.90; +0.22; optionable (DVA): Health services
http://biz.yahoo.com/p/d/dva.html
STATUS: Started a move off the 10 day MVA (18.67) on stronger volume of 743,100 (avg. 504,590). Pulled off the high of 19.25, but we continue to look for a move up from here after the stock pulled back to test its recent breakout. This has been an orderly pullback. Money flow and buying still look great. Initial target over the breakout high of 20.30: $24.
BUY POINT: Aggressive: From here on continued strong volume. Stop: 17.58, or the 50 day MVA at 17.33. Breakout: Over 20.30 on volume of 1 million or better. Stop: 18.88 (or 10 day MVA at 18.67).
POSITION: Both plays: Stock and/or July $15 or $17.50 calls to buy (DVA GC or GW).
Continued Plays: Watchlist: NVDA
OO (Oakley--$23.27; +0.62; optionable (OO): Sporting Goods
http://biz.yahoo.com/p/o/oo.html
STATUS: The stock moved up after testing the breakout back to the 18 day MVA (22.38) Monday. The stock opened above that support, then broke back over the 10 day MVA (22.94) on stronger, average volume (276,100). Looking for a continued move up as the market rallies, for a break over resistance at 24 (May highs). Big money flow and buying. Initial target: $29.
BUY POINT: Aggressive: Up from here on above average volume. Stop: 21.64. New high: Back over 24 on volume in the range of 373,000 or better. Stop: 22.32.
POSITION: Stock and/or August $22.50 calls to buy (OO HX).
COLM (Columbia Sportswr--$66.03; -0.90; no options):
http://biz.yahoo.com/p/c/colm.html
STATUS: Selling back to the 18 day MVA (64.88) on stronger volume (297,300; avg. 184,090). The move is slowing down, though, as the stock showed a loose doji after a heftier fall Tuesday. On a drop-off in volume and hold at the moving average, the stock can still bounce back for a move back over the highs near 71. Still nicely above the February high at 61.94. Target: $78-82. Great money flow and buying.
BUY POINT: Aggressive: Up from the 65 range (18 day) on rising volume. Stop loss: 60.45.
POSITION: Stock.
HOTT (Hot Topic--$33.05; +0.24; optionable (UHO): Textiles: Apparel
http://biz.yahoo.com/p/h/hott.html
STATUS: Still holding above the 10 day MVA, from where the stock moved on its opening price of 32.60. Volume was higher at 410,800 (avg. 641,090), so we are looking for a move over resistance at the 34 level from here. Still showing huge money flow. Target on a break over 36.20 (April high): $40.
BUY POINT: Up from here or a retest of the 10 day MVA (32.63) in a rally. Stop: 30.35 (or the 50 day MVA at 29.56).
POSITION: Stock and/or August $30 calls to buy (UHO HF).
WEDGES, PENNANTS, and FLYING PLATEAUS (AND FLAGS): These are some of our favorite patterns as the moves can be explosive. In this market, however, we need to see the move on the breakout on strong volume.
New Play:
FMX (Fomento Enonomico--$40.05; +0.55; optionable (FMX): Food
http://biz.yahoo.com/p/f/fmx.html
STATUS: Moved up to upper resistance in its ascending wedge as volume shot to 508,800 (avg. 248,409). The pattern formed off the bottom (26) of the stock's 14-month base and is mid-way up the right side of a smaller, 8.5-month base. Looking for a breakout as the market rallies, for an initial target of $45-47.
BUY POINT: 41.13, on continued strong volume (min. breakout volume is 335,000). Stop: 38.25 (just under the 10 day MVA, 39.07).
POSITION: Stock and/or July $35 calls to buy (FMX GG).
New Play (from the weekend):
BVF (Biovail--$38.39; +1.17; optionable (BVF): Drugs
http://biz.yahoo.com/p/b/bvf.html
STATUS: Dropped below the short term up trendline that was supporting the ascending wedge lows on Tuesday; the stock sold down on stronger volume that day. Bounced back up on slightly lower volume today (690,400; avg. 900,000), but halted at the trendline. We will have to see a move back over 39 (marking the trendline here) on strong volume. Looking at a target of 50 on a breakout.
BUY POINT: 40.58, on volume of 1.2 million or better. Stop: 37.74.
POSITION: Stock and/or July $30 or $35 calls to buy (BVF GF or GG).
Continued Plays: Moved to watchlist: OPWV
PX is removed to the Breakouts section.
BASING/TRADING RANGES: Lots of stocks pulling back to support. Make sure of the breakout (watch volumes) and then set stops just below the pivot point. Follow gains up with trailing stops.
New Plays (from the weekend):
KNT (Kent Electronics--$22.50; +1.11; optionable (KNT): Electronics Wholesale
http://biz.yahoo.com/p/k/knt.html
STATUS: The stock made a good move up in the handle on a pop in volume (293,300; avg. 331,000). Looking for the breakout as the rally continues; money flow and buying continue to look great. Initial target: $27-28.
BUY POINT: 23.27, on volume of 497,000 or better. Stop: 21.68 (10 day is at 21.75).
POSITION: Stock and/or July $22.50 calls to buy (KNT GD; delta is 0.56; other options have insufficient open interests).
DGX (Quest Diagnostics--$126.00; +9.75; optionable): Health services
http://biz.yahoo.com/p/d/dgx.html
STATUS: Just beat the buy point of 125.63 on strong volume (600,600; avg. 341,318). Looks like a strong breakout ahead. Previous high in the cup with handle base is 146.25. The stock will split June 1. Target: $144-150.
BUY POINT: Remains a buy on the breakout up to 131.91. Stop: 117.18 (10 day MVA is at 117.57).
POSITION: Stock and/or June $115 calls to buy (DGX FC-low open interest).
GLGC (Gene Logic--$23.06; -0.32; optionable (CYV): Diversified services
http://biz.yahoo.com/p/g/glgc.html
STATUS: Pulling back on lower volume after breaking out to a high of 23.50. The stock showed a doji on volume 426,100 (avg. 218,363); may hold here, but we will look for a pullback to test the 21.45 range (or the 10 day MVA at 20.96) before the stock heads back up. Great money flow and buying. Initial target: $23-24.
BUY POINT: Pullback: On a move back up after a test of 21 or better. Stop loss: 19.53 (just below the 18 day MVA at 201.3).
POSITION: Stock and/or August $17.50 or $20 calls to buy (CYV HW or HD)
ZIGO (Zygo--$30.92; -0.80; optionable (UZY): Scientific & Tech Instr
http://biz.yahoo.com/p/z/zigo.html
STATUS: Tested the 50 day MVA on the low of 30.35 as the handle to its 14-week cup base dipped even farther back. Volume was stronger and above average on the move, at 411,600 (avg. 374,000). Can still move up from here as the 50 day provides support; the stock showed a doji on the move. We will look at positions on a move back over the 10 day MVA (33.36).
BUY POINT: Aggressive: Over 35.36 (10 day MVA) on continued rising volume. Stop:
32.88 (just below the 10 day MVA).
POSITION: Stock and/or July $30 calls to buy (UZY GF; low open interest).
BBC (Bergen Brunswig--$18.40; +0.10; optionable (BBC): Drugs wholesale
http://biz.yahoo.com/p/b/bbc.html
STATUS: Moved up slightly on a strong pop in volume (913,900; avg. 1.04 million), from support at the 18 day MVA (18.06). We are looking for the stock to break out of its flat base consolidation; volume has dried up nicely over the last several days, so the stronger volume can portend a stronger move up from here. Great money flow. Initial target: $22-23.
BUY POINT: 19.36, on volume of 1.4 million or better. Stop: 18.00.
POSITION: Stock and/or June $15 calls to buy (BBC FC).
SNPS (Synopsis--$59.00; +2.28; optionable (YPQ): Software
http://biz.yahoo.com/p/s/snps.html
STATUS: Moved up from Monday's doji for the next 2 days, volume rising to 1.5 million by today (avg. 1.56 million). Looking for a continued breakout; the previous high in the 9-week cup base is 62.13. Buy point is 58.04. Strong money flow. Initial target: $67-70.
BUY POINT: 58.04, on volume of 2.3 million or better. Stop: 53.92 (18 day MVA; 54.74).
POSITION: Stock and/or June $50 of $55 calls to buy (YPQ FJ or FK).
UNFI (United Natural Foods--$16.90; -0.10; no options): Food Wholesale
http://biz.yahoo.com/p/u/unfi.html
STATUS: Showing a tight doji at the base of its handle in the 16-week cup base. The low of 16.70 tested support at the 10 day MVA as volume rose to above average levels (175,500; avg. 153,363). We are looking for a move up from here (the stock showed a star doji) for the breakout over the May (handle) high of 18.12. Good buying. Initial target on a breakout: $21-22.
BUY POINT: 18.25, on volume of 230,000 or better. Stop: 16.97.
POSITION: Stock.
Continued Plays: Watchlist: IBM, JNPR, AA, OMG. Watch RE; it moved up on strong volume today.
MSFT (Microsoft--$69.16; +0.89; optionable (MSQ): Software
http://biz.yahoo.com/p/m/msft.html
STATUS: Moved up off the 18 day MVA (68.27) on stronger, average volume (45.9 million). The stock closed just under the 10 day MVA (69.25), pulling off its high of 69.88. Looking for a break of resistance and move up to the May high of 72.15. Looks promising on the stronger volume. The stock is trying to clear a 5.5-month base (within a larger base). Initial target: $78-82.
BUY POINT: Aggressive: Over 70 on above average volume. Breakout: Over 72.15 on volume of 69 million or better. Stop: 67.10.
POSITION: Both: Stock and/or July $65 calls to buy (MSQ GM).
GE (General Electric--$52.21; +2.06; optionable (GE ): Conglomerates
http://biz.yahoo.com/p/g/ge.html
STATUS: Broke over the 200 day MVA resistance (50.43) on strong volume (24.5 million; avg. 21.9 million), just the move we were looking for. The stock found support at the 10 day MVA (49.90) and is looking ready to add to this move as the market rallies.
Money flow looks great. Initial target: $56-58.
BUY POINT: Up from here on continued strong volume. May gap higher on the open; look for a pullback to test the opening price, or today's closing price, before the stock heads back up. Stop: 48.56 (just under the 18 day MVA, 48.96).
POSITION: Stock and/or June $45 calls to buy (GE FI). Next month out for options: September.
HD (Home Depot--$51.21; +1.11; optionable (HD): Retail
http://biz.yahoo.com/p/h/hd.html
STATUS: In a 4-month cup with handle base within a larger base, and broke over resistance at the 50 range (making our buy point of 50.38) on strong volume (10.7 million; avg. 7.1 million). Volume was down slightly from that of Tuesday, but we'll look for that to pick up as the market rallies. Previous high in the base is 52.50. Initial target: $55-57.
BUY POINT: Remains a buy on the breakout up to 52.90. Stop: 47.63.
POSITION: Stock and/or August $45 calls to buy (HD HI).
TGT (Target--$38.00; -0.30; optionable (TGT): Discount stores
http://biz.yahoo.com/p/t/tgt.html
STATUS: Dropped to the 50 day MVA (37.23) on the opening price, after selling down to the 18 day MVA Tuesday on strong volume. The stock moved up from the 50 day on stronger volume (7.1 million; avg. 4.1 million), so we will look for a hold at that support. However, the stock has lost the pattern (saucer with handle), so we will look at positions only on a strong move back over the 10 day MVA (38.72). Initial target: $44-46.
BUY POINT: Aggressive: Back over 39 on continued strong volume. Stop loss: 36.27.
POSITION: Stock and/or July $35 calls to buy (TGT GG).
Trading plays:
New Play (from the weekend):
STT (State Street--$111.00; +4.73; optionable (STT): Banking
http://biz.yahoo.com/p/s/stt.html
STATUS: Broke out of the pennant-style handle. Volume was stronger on the move, at 766,300 (avg. 1 million), as the stock approaches resistance at the 200 day MVA (112.14). We will look for a break of that resistance in a continued rally; the stock can pull back early for a test of 109 (April and handle high) before heading back up. Target: $125-131.
BUY POINT: Over 112.14 on average or better volume. Stop: 104.29.
POSITION: Stock and/or June $110 (STT FB).
Continued: Watchlist: AHAA, QLGC, PDLI
QCOM (Qualcomm--$64.76; +5.26; optionable (AAO): Telecom
http://biz.yahoo.com/p/q/qcom.html
STATUS: Made a nice move off the 50 day and short term moving averages on volume that remained strong at average levels but was slightly down. We are looking for the trade up to the 200 day MVA (69.32) after the stock's 3-week consolidation, and QCOM looks ready to deliver in a continued rally.
BUY POINT: Aggressive: Up from here on rising volume. Stop: 60.23 (10 day MVA is at 60.04).
POSITION: Stock and/or July $55 calls to buy (AAO GK).
AHAA (Alpha Ind--$26.63; +1.21; optionable (GAK): Semiconductor
http://biz.yahoo.com/p/a/ahaa.html
STATUS: The stock found support at the 18 day MVA (25.40) and moved up on stronger volume (704,100; avg. 1.2 million). The stock is in a type of wedging consolidation about that moving average, from which we are looking for a breakout and run up to the 200 day MVA (31.21) for an aggressive play. A stronger move that shows promise.
BUY POINT: Aggressive: Up from here on continued rising volume. Stop: 24.77.
POSITION: Stock and/or August $25 calls to buy (GAK HE).
ADVS (Advent Soft--$57.25; +2.35; optionable (UIV): Software
http://biz.yahoo.com/p/a/advs.html
STATUS: Made a stronger move up in the handle to the cup base, from Tuesday's doji, but volume was just down at 301,900 (avg. 332,818); look for stronger volume in a continued rally to take the stock back over the intraday high of 58.24. Money flow still looks great. Initial target: $66-69.
BUY POINT: Breakout: 59.62 (one-eighth point over the handle high of 59.49), on volume of 500,000 or better. Stop: 55.45.
POSITION: Stock and/or August $50 calls to buy (UIV HJ).
Index plays: We could get some entry points moving into the announcement, and then after the announcement. We will wait about 15 minutes and see how it shakes out. The indexes might sell lower for a day or two before they decide to move back up. There is the possibility of some good money in there.
QQQ (Nasdaq 100--$47.15; +2.00; optionable (QQQ):
STATUS: Moved back over the 50 day MVA (46.27) on strong volume (80 million; avg. 78 million). Looking for a continued move up as the market rallies. An aggressive play, as the index has overhead supply a bit thick up to the 50 level (for starters).
BUY POINT: Aggressive: Up from here on continued strong volume. Stop: 43.85.
POSITION: June $45 calls to buy (QQQ FS). Please check with your broker in the morning for deltas, as they are unavailable at the time of this writing.
OEX (Standard & Poors 100--$664.60; +18.34; optionable (OEY):
STATUS: A strong breakout move on volume of 1.35 million (avg. 1.2 million). First potential resistance is at 675. Look for a continued move up from here in a rally; may get an initial pullback on the open to test the 661 level, or the opening price on a gap higher.
BUY POINT: Up from here on continued strong volume. Stop: 618.08.
POSITION: June $660 puts to buy (OEY FL; please check with your broker for deltas, which were unavailable at the time of this writing.
Good Investing!
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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