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yahoo stock, trading system
Begin Part 2 of 2
Support and Resistance Levels
Nasdaq: Closed at 2251.03.
Resistance: Interim where it stopped this last time at 2328. Then 2500.
Support: 2232 to 2250. The 10 day at 2228.48.
S&P 500: Closed at 1277.89.
Resistance: 1315.93 is the recent high it needs to plow back through. After that there are some price consolidations at 1325 from February and October of 2000 and the summer of 1999.
Support: 1270. 18 day MVA is at 1272.07.
Dow: Closed at 11,005.37.
Resistance: 11,400 to 11,450. Then the old high at 11,750.28.
Support: 11,000. The 18 day MVA is at 10,997.88. Then 10,750.
Weekly Economic Calendar (All times Eastern). The figures are the consensus expectations, not ours.
5-29-01
Personal Income, April (8:30): 0.3% versus 0.5% prior.
PCE, April (8:30): 0.4% versus 0.3% prior.
Consumer Confidence, May (10:00): 110.3 versus 109.2 prior.
5-31-01
Initial Claims, 5/26 (8:30): 407,000 versus 407,000 prior.
Chicago PMI, May (10:00): 40.0% versus 38.9% prior.
Help-Wanted Index, April (10:00): 66 versus 66 prior.
6-01-01
Auto Sales, May: 6.4M versus 6.4M prior.
Truck Sales, May: 7.0M versus 7.0M prior.
Nonfarm Payrolls, May (8:30): -25,000 versus -223,000
Unemployment Rate, Mate (8:30): 4.6% versus 4.5% prior.
Hourly Earnings, May (8:30): 0.3% versus 0.4% prior.
Average Workweed, May (8:30): 34.3 versus 34.3 prior.
Construction Spending, April (10:00): 0.3% versus 1.3% prior.
NAPM Index, May (10:00): 43.5% versus 43.2% prior.
SUBSCRIBER QUESTIONS
Q: My broker tells me he can't do a stop loss on an option. Do you have any information where I can find/research a broker that offers a stop loss on an option.
A: Stop losses on options are something the individual broker or ECN provides. The options exchanges do not have any mechanism for stop losses similar to those on stocks. It is usually left up to the brokerage to have a system to do that. As far as full service brokers, I have been able to put a stop loss or limit on every option trade I have made for quite some time. As far as ECN's, Archapelago has one of the most flexible stop order systems. It is becoming more and more common; brokerages that do not handle this for their clients are going to either get it or be left behind.
Q: When it comes to trading would your advice be different for someone trading with their money in a brokerage account subject to short term capital gains taxes versus someone trading within an IRA account?
A: There is a misconception out there, and it is fostered by many of the larger brokerages and mutual funds that if you attempt to manage your trades yourself you are going to get burned on taxes. I suggest you look no further than your mutual fund statements where you lost money on the year but ended up owing capital gains taxes because of the decisions to sell certain stocks at a gain even though they had already let 70% of the value slip away. We would have preferred they sell higher and at least we would have some profit to show for it.
That said, we love to trade in our retirement accounts because the gains grow tax free until we start taking them out. That is always the preferable manner gains without current taxes. Now, outside our retirement accounts we generate income to meet living expenses now, not some time in the future. We have longer term goals (stocks we would like to see continue to gain for months, even years) and shorter term goals on the same stocks either with stock or option trades. Our goal is to maximize the gain on the trade and to minimize losses. When I enter a trade I am not thinking that I am not putting tax considerations first; I am not entering and exiting trades based on tax considerations. If I do it right, I make money. That money is going to be taxed. If I don't make money, I won't be taxed, but I won't have any gain on that trade. If you enter trades or make decisions based solely or primarily on tax concerns, I suggest that the emphasis is not on the investment.
There are times we do consider tax ramifications such as wash sales (selling a stock for a loss and then repurchasing within 30 days; you cannot take the loss). But our overall goal has to be to maximize the gain on each investment and to limit losses. If we take a small loss on a stock because it pulls back on us more than we wanted when we thought it was breaking out, but then we see it make that second move out of a cup with handle on huge volume, the potential gain of 20%, 50%, 100% or more on a good breakout can more than justify the inability to take a much smaller loss on that first attempt. In our opinion, the focus has to be on what the stock is doing.
For a review of frequently asked questions, please use the link below:
http://www.investmenthouse.com/1questions.htm
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.
THE PLAYS:
For a review of frequently asked questions, please use the link below:
http://www.investmenthouse.com/1questions.htm
THE PLAYS:
All prices reflect prices at the close on Friday.
BEST PLAYS: The report has several new plays this weekend, as previously covered stocks either hit targets and need to rest, or simply didn't make the moves we wanted. The best of those removed are noted as on watchlists at the section they were in.
Best Plays:
1) SDS: A star doji after testing support.
2) PVTL: Looks ready in the wedge.
3) HB: Ditto.
4) PSFT: Still a buy on this breakout.
5) IRM: Ready for a move up in the handle.
6) BLPG: Ditto.
7) WFMI: And another stock in a handle.
8) UNFI: Still a good-looking pattern.
9) QQQ: At support on low volume.
READY TO BREAK TO A NEW HIGH (or just did):
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:
SDS (Sungard Data--$59.85; +0.14; optionable (SDS): Software
http://biz.yahoo.com/p/s/sds.html
STATUS: Testing the breakout to 64.50 from a cup with handle. The stock pulled back to close just below the buy point of 60.03, but is showing a perfect star doji (no difference between opening and closing prices, and can be a strong indicator for a change in direction). Price also moved back up after testing support on the low (at the 18 day MVA, 58.98). Volume was a little bit higher at 569,300 (avg. 922,409). Watch resistance at the 63 level on a move back up. Target: $71-74.
BUY POINT: Aggressive: Over 61 on volume of 769,000 or better. Stop: 56.73 (50 day MVA is at 55.61).
POSITION: Stock and/or July $55 calls to buy (SDS GK).
MSCC (Microsemi--$59.26; +3.86; optionable (QMS): Semiconductor
http://biz.yahoo.com/p/m/mscc.html
STATUS: Moving up after testing a good breakout from a nice-looking cup with handle base. The stock on Friday popped up from a doji on strong volume (down at 590,400; average is 406,000). Tapping at resistance on the high of 61.07, we are looking for volume to kick back in (the market's low volume Friday prevented a strong move up, but MSCC certainly looks ready). Target on a break over the high of 63.29: $70.
BUY POINT: Over 62 on stronger volume. Stop: 59.52.
POSITION: Stock and/or September $55 calls to buy (QMS IK).
A stock trading on volume of less than 100,000 average daily volume:
KOSP (Kos Pharmaceuticals--$26.55; -0.13; optionable (KQW): Drugs
http://biz.yahoo.com/p/k/kosp.html
STATUS: Tested support on the low of 26 after its recent strong breakout from a saucer with handle base. Volume was quite low the last 2 days (down to 34,400; avg. 59,000), so we are looking for support here. If not, the 10 day MVA is below at 25.28 and that is reinforced by prices at the start of the base (November). Looking for a strong move back up after the test. Target: $31-32.
BUY POINT: Aggressive: Over 27.50 on strong volume. Stop: 25.58 (or the 10 day MVA).
POSITION: Stock and/or August $25 calls to buy (KQW HE).
Continued Plays: COLM and OCLR are on a watchlist.
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 Plays:
PVTL (Pivotal--$22.78; -0.14; optionable (QFK): Business Services
http://biz.yahoo.com/p/p/pvtl.html
STATUS: In an ascending wedge that formed above the 18 and 50 day MVAs as volume drops off (to 69,100; avg. 360,000). The stock is below the 200 day MVA (34.39) and is trying to work its way up the right side of its base. Looks good for a breakout and move up to that range. The pattern formed off the bottom of a 7-month base (within a larger base). Money flow looks good.
BUY POINT: Breakout: 25.83, on volume of 486,000 or better. Stop: 24.02.
POSITION: Stock and/or July $20 calls to buy (QFK GD).
HB (Hillenbrand--$51.15; +0.65; optionable (HB): Diversified services
http://biz.yahoo.com/p/h/hb.html
STATUS: In an ascending wedge that is squeezing down in the middle right side of a 5-month base. Volume for the last several weeks has been below average overall, higher Friday as price tested support on the low (50 day MVA at 49.87) then moved back over resistance of the short term MVAs (closed right above the 10 day at 51.04). Volume was at 114,700; average 125,545). Look for a breakout over resistance (52.70, the May high). Money flow is strong and buying decent. Target: $58-61.
BUY POINT: 52.83, on volume of 169,000 or better. Stop: 49.13 (below the 50 day MVA at 49.87).
POSITION: Stock and/or September $45 or $50 calls to buy (HB II or IJ; low open interests).
MRCY (Mercury Computer--$53.37; +0.15; optionable ( ): Telecom
http://biz.yahoo.com/p/m/mrcy.html
STATUS: The stock has run up over the last several days after testing its 50 day
MVA (currently near 46), and has not quite made it up to upper resistance in the large ascending wedge (at 55). Showing a doji Friday, the stock pulled off a high of 54.15 on stronger volume (161,700; avg. 218,772), so may be ready to turn back down for now. Support could be at the 10 day MVA (51.12) or the 18 day at 49.64. Looking for a breakout over 55.50 on a rebound from either level. Huge money flow. Initial target: $60.
BUY POINT: Aggressive: Up from the 51 range on rising volume. Stop: 47.43. Breakout: 55.63, on volume of 296,000 or better. Stop: 51.74, or the 10 day MVA.
Continued Plays:
PRGN (Peregrine Sys--$30.89; -1.06; optionable (GQP): Software
http://biz.yahoo.com/p/p/prgn.html
STATUS: The stock closed just above a long-term down trendline (at 30.75, connecting the January and July highs) after hitting 33.25 intraday. The pullback came as volume dropped pretty sharply to 2.6 million (avg. 3.1 million) and PRGN tapped what could be solid support at 30. The stock's in a long base, and at the bottom has traded more or less between 13 and 33 since November. We are looking for a strong breakout back over 33.25 to take out the January high. The 10 day MVA is at 29.27, still above the buy point in the ascending wedge (28.85), from which the stock broke out last week, launching it to 33.25. Target on a breakout: $40. For existing plays this is one we have to be careful to protect gains.
BUY POINT: Over 33.25 on volume of 4 million or better. Stop: 30.92.
POSITION: Stock and/or July $30 calls to buy (GQP GF).
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. Watchlist: SNPS
New:
PSFT (Peoplesoft--$44.95; +1.77; optionable (PQO): Software
http://biz.yahoo.com/p/p/psft.html
STATUS: Broke out of a cup with handle Friday on good volume (9.7 million; avg. 7.2 million). The stock remains a buy, since it is within our 5% limit for buying on breakouts. Pivot point is 44.15. Shows strong money flow and pretty good buying. Target: $51-53.
BUY POINT: Still a buy up to 46.36 on the breakout. Stop: At or near 10 day MVA at 41.78.
POSITION: Stock and/or July $40 calls to buy (PQO GH).
IRM (Iron Mountain--$40.32; +0.19; optionable (IRM): Diversified services
http://biz.yahoo.com/p/i/irm.html
STATUS: Back at support (10 day MVA, 40.19) at the base of a handle to a short cup base. The low (39.70) tested lower support at the 18 day MVA before the stock moved back up to close. Volume was quite strong and building since Thursday (up to 431,000; avg. 180,000). We are looking for the stock to make a break for it now---handle high is 41.50. Big money flow and good buying. Target: $48-50.
BUY POINT: 41.63, on volume of 270,000 or better. Stop: 38.72 (or the 50 day MVA at 38.35).
POSITION: Stock and/or July $40 calls to buy (IRM GH).
BLPG (Boron Lepore--$13.39; +0.07; no options): Diversified services
http://biz.yahoo.com/p/b/blpg.html
STATUS: Another cup with handle, and showing a doji in the handle on very low volume (decreasing over the last week and down to 36,100; avg. 92,000). Looking for a move back up and breakout over the handle high of 13.88 on strong volume. The stock shows huge money flow and buying. Target: $16-17. One of the better patterns of accumulation in the bases we have been watching.
BUY POINT: 14.01, on volume of 138,000 or better. Stop: 13.03 (below the 10 day MVA at 13.28).
POSITION: Stock.
WFMI (Whole Foods--$56.30; -0.20; optionable (FMQ): Retail
http://biz.yahoo.com/p/w/wfmi.html
STATUS: At support (10 day MVA, 55.41) in a handle to its 5-month cup, and volume keeps falling the way we like it, down to 261,300 (avg. 538,090). The stock looks ready to make the move over a handle high of 58.83, but on stronger volume. We're looking at a target of $68-71. Shows good buying and money flow.
BUY POINT: 58.96, on volume of 807,000 or better. Stop: 54.83.
POSITION: Stock and/or August $50 calls to buy (FMQ HJ).
Continued Plays:
LTBG (Lightbridge--$15.70; +0.30; optionable (LKQ): Telecom
http://biz.yahoo.com/p/l/ltbg.html
STATUS: The stock is back up to upper resistance in its 7-month trading range, and as volume pulls back steadily below average (89,500; avg. 284,636) is forming a handle to a cup base that is formed since late February. The stock moved up on the lower volume so we are looking for a pullback in the handle, perhaps to the level of the low of 15, tested by the stock over the last 3 days. Money flow and buying look great.
BUY POINT: Breakout: 16.25, on volume of 430,000 or better. Stop: 15.11 (10 day MVA is at 14.48).
POSITION: Stock and/or July $12.50 calls to buy (LKQ GV).
MIL (Millipore--$58.67; -0.32; optionable (MIL): Scientific & Tech Instr
http://biz.yahoo.com/p/m/mil.html
STATUS: Pulling back in the handle to its 5-month cup base. The stock has tapped support at the 10 day MVA over the last three days (58.08) on steadily decreasing volume, which was down to 162,300 Friday (avg. 501,409). We are looking for a high volume breakout over the the high of 60.50. Good money flow. Target: $70.
BUY POINT: 60.63, on volume of 752,000 or better. Stop: 56.39 (below the 18 day MVA at 57.20).
POSITION: Stock and/or July $55 calls to buy (MIL GK).
DGX (Quest Diagnostics--$123.85; +0.29; optionable): Health services
http://biz.yahoo.com/p/d/dgx.html
STATUS: Holding at support (10 day MVA, 122.65) on below average volume (211,100; avg. 367,000). The stock tried to make a strong breakout from the cup with handle in the previous week, but pulled back from the breakout high of 133.50 to the support as volume dropped off. Still looking for a breakout. Money flow and buying look solid. Target: $144-150.
BUY POINT: Aggressive: Up from here on strong volume in a rally. Stop: 115.18.
Breakout: 133.63, on volume of 551,000 or better. Stop: 124.27.
POSITION: Stock and/or August $120 calls to buy (DGX HD; delta 0.626).
UNFI (United Natural Foods--$17.44; +0.04; no options): Food Wholesale
http://biz.yahoo.com/p/u/unfi.html
STATUS: In a double handle now, to its 4-month cup base. The pattern also resembles and an ascending wedge, with the buy point remaining just above the original handle high at 18.12. The stock is holding above the 10 day MVA, tested on the lows the last 2 days (17.26 range). Look for a move up on continued rising volume (up to 81,700 Friday; avg. 147,000). Money flow is solid and buying strong. Target: $21-22.
BUY POINT: 18.25, on volume of 221,000 or better. Stop: 16.97(just under the 10 day at 17.24).
POSITION: Stock.
HD (Home Depot--$52.28; -1.17; optionable (HD): Retail
http://biz.yahoo.com/p/h/hd.html
STATUS: Is now pulling back in a handle to its 9-month cup base (part of a larger base) as volume pulls back according, falling to the lowest levels in almost 3 months Friday (3.3 million; avg. 7.2 million). HD looks ready to complete the pullback to the 10 day MVA (51.97) on the falling volume, and we'll look for support there for a move back up to a breakout. Target: $59-62. 18 day MVA is at 50.79.
BUY POINT: Breakout: 53.86, on volume of 10.8 million or better.
POSITION: Stock and/or August $45 or $50 calls to buy (HD HI or HJ).
Trading plays: STT and QCOM are on a watchlist.
INDEX PLAYS: Look ready for a rally.
QQQ (Nasdaq 100--$48.99; -0.91; optionable (QQQ):
STATUS: Pulled back again Friday, testing the 18 day MVA on the low of 48.02 then closing back over the 10 day MVA (48.63). 50 is giving it some resistance, and the index has other resistance at 51.96, the May high. Volume was much lower at 36.1 million (avg. 74 million), positioning the index for the upside play in a rally. The 50 day is at 47.02.
BUY POINT: Aggressive: A move up from the 10 day (48.63) in a rally. Target: 55. Stop: 47.50 (just below the 18 day MVA and above the 50 day MVA).
POSITION: Stock and/or July or September $45 calls to buy (QQQ GS or IS). Please check with your broker for deltas, as they are not listed 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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yahoo stock
trading system
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