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Begin part 2 of 3
Support and Resistance
Nasdaq: Closed at 1858.24
Resistance: 1860 to 1865 is not relinquishing. Then 1930 - 1935.
Support: The August high 1812 and 1814. 1818 (10 day MVA) and 1776. The 18 day MVA (1788). 1760 (May 2002) is some support down to 1740. The exponential 50 day MVA (1723).
S&P 500: Closed at 1021.39
Resistance: 1050.
Support: The June intraday high at 1015. June closing high at 1011. The 10 day MVA (1012) and the 18 day MVA (1005). The exponential 50 day MVA (991) and 975 (December 1997 peak). 965 (August 2002 peak). 951 (late May high) to the mid-May high (948).
Dow: Closed at 9503.34
Resistance: 9735.
Support: 9500 (June 2002 lows) is the top of the recent range. 9361 the July intraday high down to 9353. The 10 day MVA (9459). The 18 day MVA (9401). 9250 to 9236, the early June intraday high. The exponential 50 day MVA (9238).
SEMINARS ON CD
http://www.stockseminarsonline.com
This is Jon Johnson's own site devoted exclusively to seminars designed to teach you what you need to know about the stock market and stock movement and how to take advantage of those moves without incurring the usual high costs of travel and related expenses usually associated with seminars.
THE PLAYS
Good movers Friday: ATML; CRUS; ERICY; JBLU; LPSN; STYS; TXN
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 pre-announcement plays are found in that section.
NEW PLAYS: This section includes new plays from all sections other than pre-announcements.
New Pre-Split
Play Date: 09/06/2003
SAFE (Invivo--$23.6; +1.29; no options): Medical appliances. Splits 3:2 on 9-29-03
http://biz.yahoo.com/p/s/safe.html
STATUS: 10 day MVA bounce. A bit more thinly traded than we usually look for, but it is showing excellent momentum and volume. After a surge off the 18 day MVA two weeks back it has tested the 10 day MVA (22.27) and shot up Friday on a volume surge. These are momentum plays and we are looking to get in on the move. It is a good sector as well as the techs take a breather. Strong money flow and a relative strength breakout. Remember, the object of these plays is to see the move occurring, get in, let it work for you until it shows a topping sign (e.g., a doji after a run higher), then take the gain.
Volume: 40.03K Avg Volume: 22.272K
BUY POINT: $23.75 Volume=40K Target=$26.75 Stop=$22.25
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/safe.html
Upside:
Play Date: 09/06/2003
IMCL (Imclone--$46.56; +3.05; optionable): Biotechnology
http://biz.yahoo.com/p/i/imcl.html
STATUS: Ascending triangle. After all of the trouble with insider selling allegations, Martha Stewart, etc., it seems the drug works. IMCL has formed up a nice 3 month triangle showing solid 4 to 0 accumulation (4 up price weeks on rising volume to 0 down price weeks on rising volume), and Friday started breaking higher on a nice volume surge. Relative strength is breaking higher on the move, and we are looking to get in as it continues the breakout move.
Volume: 3.587M Avg Volume: 2.271M
BUY POINT: $46.76 Volume=3M Target=$56 Stop=$43.49
POSITION: QCI AI - Jany $45c (65 delta) &/or Stock
http://www.investmenthouse.com/cs/imcl.html
Play Date: 09/06/2003
SEAC (Seachange Intl.--$11.9; 0; optionable): Telecom processing systems
http://biz.yahoo.com/p/s/seac.html
STATUS: Cup. SEAC is working through a 3.5 month cup base sporting excellent 6 to 2 accumulation. It has surged up the right side of the base the past week, moving off of the 50 day MVA (10.16) on a nice volume boost. Very solid action but it closed well off of its Friday high (12.38) as the market stumbled late. Thus it may work laterally here and form the handle that would give it the best foundation to move forward. We will take some positions on a break through the buy point on a continued move from here, however, because the stock has excellent underpinnings. We will also look for a test or a handle to form after that and then complete the buy as it makes the breakout from there.
Volume: 646.927K Avg Volume: 229.863K
BUY POINT: $12.12 Volume=345K Target=$14.45 Stop=$11.27
POSITION: UEG AV - Jan. $12.50c (50 delta) &/or Stock
http://www.investmenthouse.com/cs/seac.html
Play Date: 09/06/2003
SFNT (Safenet--$38.33; -0.74; optionable): Security software
http://biz.yahoo.com/p/s/sfnt.html
STATUS: Testing the breakout. Worms are digging through the internet and security software is enjoying the problems. SFNT has set up a base on base pattern, the first being a six month cup with handle that broke out in early July followed almost immediately but a 1.5 month triangle that broke out to start the month. It rallied up to 40 but is now coming back on nice, below average volume to test the move. Friday it tapped toward the 10 day MVA (37.19) on the low (37.50) and rebounded to recoup much of the loss. SFNT showed good 7 to 4 accumulation in the longer base and 2 to 0 accumulation in the second base. These base on base patterns do a very good job of getting rid of the sellers and typically set up much better moves heading forward. It may snug up a bit more toward the 10 day MVA before making the rebound move.
Volume: 187.547K Avg Volume: 352.227K
BUY POINT: $38.72 Volume=350K Target=$46.45 Stop=$37.15
POSITION: UUI LH - Dec. $40c (49 delta) &/or Stock
http://www.investmenthouse.com/cs/sfnt.html
Downside:
Play Date: 09/06/2003
TRB (Tribune Company--$45.52; -0.7; optionable): Newspapers
http://biz.yahoo.com/p/t/trb.html
STATUS: Put. The owner of the LA Times and Chicago Tribune is turning back down in its 4 month downtrend that started when it double topped in April and May. It has been more or less working down the 10 and 18 day MVA with occasional bumps up to the 50 day MVA (46.72) to test the air. After its latest rebound to the 18 day MVA (46.13), TRB moved laterally for three days and then dumped Friday on rising volume. Looks ready to make the move lower again, and it typically moves in $3 increments on each leg down. That is the move we are looking to capture here.
Volume: 949.6K Avg Volume: 1M
BUY POINT: $45.38 Volume=1M Target=$43 Stop=$46.28
POSITION: TRB WI - Nov. $45p (-43 delta)
http://www.investmenthouse.com/cs/trb.html
CONTINUING LEADER PLAYS
Play Date: 09/04/2003
HGSI (Human Genome Sciences--$15.22; -0.29; optionable): Diagnostic substances
http://biz.yahoo.com/p/h/hgsi.html
STATUS: Cup. May be starting to form the handle to its 3 month base, taking a pause Friday on lower, below average volume after a nice move up last week to form the right side of the base. Accumulation in the base is an excellent 5 to 2 thus far in the pattern, a good sign. We were looking for a move up to 17 before the handle formed, but a shakeout of the sellers here would be excellent action as well. Still looking for positions on a strong move through the buy point.
Volume: 1.555M Avg Volume: 2.42M
BUY POINT: $16.06 Volume=3M Target=$19.28 Stop=$14.48
POSITION: HQI AC - Jan. $15c (61 delta) &/or Stock
http://www.investmenthouse.com/cs/hgsi.html
Play Date: 08/30/2003
ICST (Integrated Circuit System--$34.42; +0.75; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/i/icst.html
STATUS: Cup w/handle. Very nice action, moving up off the 18 day MVA (33.02) late in the week on some rising volume. It is in the handle to a 7 week base showing solid 3 to 0 accumulation (3 up weeks on rising volume to 0 down weeks on rising volume). Excellent money flow and relative strength ready to make a breakout, a strong indication of breakout support. Being patient and looking for the breakout on strong trade.
Volume: 1.162M Avg Volume: 1.58M
BUY POINT: $35.32 Volume=2.7M Target=$42.38 Stop=$33.42
POSITION: IUY AG - Jan. $35c (52 delta) &/or Stock
http://www.investmenthouse.com/cs/icst.html
Play Date: 08/30/2003
MOBE (Mobility Electronics--$8.1; +0.02; no options): Mobile computing peripherals
http://biz.yahoo.com/p/m/mobe.html
STATUS: Testing the breakout. This is a very pretty picture, one of our favorite entry points. MOBE blasted higher Tuesday on strong volume, carried higher Wednesday, but then tested the move late in the week. Volume dropped to below average on the test, and Friday the stock tapped toward the 10 day MVA (7.71) and rebounded to show a nice doji with tail that often indicates a rebound is coming. Nice test of the breakout and solid across the board with strong money flow, relative strength, and accumulation.
Volume: 530.14K Avg Volume: 540.954K
BUY POINT: $8.22 Volume=781K Target=$10.22 Stop=$7.64
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/mobe.html
Play Date: 08/02/2003
MRVL (Marvell Technology--$42.53; +1.25; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/m/mrvl.html
STATUS: Testing the breakout. A nice test of the breakout from the 2 month cup base, holding at the 10 day MVA (41.19) Thursday with a doji and then surging Friday on a strong volume shot. It came back off the high (43.33) to close, but it looks very solid. Strong money flow to match the accumulation. Looking for a blast higher again for more positions on this winner.
Volume: 4.453M Avg Volume: 3.191M
BUY POINT: New: $42.92 (orig. $38.50) Volume=4.9M Target=New positions: 49.50 (orig. positions $46) Stop=$39.88
POSITION: UVM KG - Nov. $35c (57 delta) &/or Stock
http://www.investmenthouse.com/cs/mrvl.html
Play Date: 08/27/2003
MXIM (Maxim Integrated--$42.7; -0.43; optionable): Semiconductors
http://biz.yahoo.com/p/m/mxim.html
STATUS: Testing the 18 day MVA. MXIM thudded to the 18 day MVA (42.61) Wednesday when the SOX had its one-day fall. It has held that level and Friday showed a very nice, tight doji on stronger, above average trade. It tapped 42 on the low and rebounded, as 42 is a price support level. Will need to see the move on strong volume to enter.
Volume: 8.706M Avg Volume: 7.091M
BUY POINT: Aggressive: $44.12; Breakout: $45.04 Volume=9.5M Target=$51.85 Stop=$41.89
POSITION: XIQ KI - Nov. $45c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/mxim.html
Play Date: 08/19/2003
MYL (Mylan Labs--$36.54; +0.34; optionable): Generic drugs
http://biz.yahoo.com/p/m/myl.html
STATUS: Cup w/handle. Tapped the 18 day MVA (35.80) Friday and then started up. Volume was lower but still average as MY continues to look good, forming the handle to the base it never formed before breaking out two weeks back. Money flow continues to rise as the stock moves laterally; that is a positive divergence.
Volume: 1.314M Avg Volume: 1.4M
BUY POINT: $36.71 Volume=1.5M Target=$43.74 Stop=$35.65
POSITION: MYL AG - Jan $35c (61 delta) &/or Stock
http://www.investmenthouse.com/cs/myl.html
Play Date: 09/04/2003
NTN (NTN Communications--$2.71; +0.08; no options): Broadcast TV
http://biz.yahoo.com/p/n/ntn.html
STATUS: Test breakout. NTN looks ready to make a strong move out of its short 6 week cup w/handle base, Friday moving higher once again on a strong shot of volume. It was unable to hold the move, however, to the close, so we held off and are ready to move in this week. Accumulation in this short pattern is a strong 3 to 1, and relative strength has broken out, an indication that the move is solid. Excellent money flow.
Volume: 387.3K Avg Volume: 131.954K
BUY POINT: $2.75 Volume=195K Target=$3.55 Stop=$2.48
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/ntn.html
Play Date: 08/18/2003
SINA (Sina.com--$34.32; +0.28; optionable): China internet
http://biz.yahoo.com/p/s/sina.html
STATUS: Cup. Still working on the 6 week cup, moving laterally below 35 to end the week in something of a handle formation. We like this action even better because it is building pressure under 35 even as the 10 day MVA (32.64) rises up to meet it. That sets the stage for a strong breakout move.
Volume: 7.705M Avg Volume: 7.869M
BUY POINT: New: $35.28 (orig. $32.20). Volume=10M Target=$38.25 Stop=$31.22
POSITION: NOQ LF - Dec. $30c (61 delta) &/or Stock
http://www.investmenthouse.com/cs/sina.html
Play Date: 09/03/2003
STST (Sensytech--$18.57; +0.07; no options): Defense & intelligence products (e.g., passive surveillance)
http://biz.yahoo.com/p/s/stst.html
STATUS: Flat. STST blasted higher to start last week and then faded back on lower, below average volume Thursday and Friday. On the Friday low (18.15) STST tested the 10 day MVA (17.97) and rebounded to show a nice, tight doji. That shows a lot of support at the level as buyers came back into the stock. It may come back to test that 10 day one more time, but the key on this move is a rebound on a sharp volume increase.
Volume: 54.447K Avg Volume: 111.272K
BUY POINT: $19.25 Volume=175K Target=$23.12 Stop=$17.65
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/stst.html
PRE-ANNOUNCEMENT PLAYS
Current Pre-Announcement Plays:
ACV: Forecast 10-23 with earnings or a board meeting 11-3. Testing back on the breakout as volume shrinks.
APOL: Forecast to announce a split with earnings on 9-22-03. Not the move we wanted, falling to the 50 day MVA.
AVP: Forecast 10-28 before the open with earnings. Nice breakout test, showing a doji Friday.
BBBY: Forecast to announce a split 9-24 with earnings. Not doing it, heading for a 50 day MVA test as it and other retailers start to suffer.
BLUD: Forecast to announce a split on 10-17-03 before the market opens in conjunction with earnings. Edging back to test the move. Want to see it back just a bit more toward 25.
CLE: No split announcement with board meeting 9-4-03. Need to see it pullback to test toward 34 then rebound.
COCO: Forecast 10-29 or on 11-20 at a board meeting. Did not make the bounce it was set up to make, dropping through the 50 day MVA on volume. Needs to hold support at 55.
COLM: Forecast to announce a split on 10-23-03 after the market closes. Heading back for another 50 day MVA test.
CPWM: Forecast 9-30 with a board meeting. Sold back to test the 18 day MVA. Back down to the 18 day MVA.
DG: No split with earnings on 8-28-03 but a very solid move and still working higher. Nice 18 day MVA test, but need to see it rebound.
DHR: Forecast 9-17-03 in conjunction with a board meeting. Received a valuation downgrade Friday and it spanked it back to the 18 day MVA.
ETN: Forecast 10-13 with earnings or 10-22 with a board meeting. Moving laterally after the strong gain.
FDS: Forecast 9-16-03 in conjunction with earnings.
FOSL: Forecast 11-11-03 with earnings. Gapped down to the 18 day MVA where it managed to hold.
GDW: Forecast 9-18 with a board meeting. Holding the 18 day MVA test.
HAR: Forecast 10-29 with earnings. Still working laterally after that strong breakout.
JBLU: Forecast 9-4-03. No rest of this stock as it powers higher again on strong volume.
KRON: Forecast 10-28-03 with earnings.
KSWS: Forecast 10-28.
LM: Forecast 10-22 with earnings. Turned right back down after the nice surge.
MERQ: Forecast to announce a split on 10-16-03 in conjunction with earnings. Still rising on volume. Waiting for the first test to provide an entry point.
NATI: Forecast 10-20-03. Getting away from us on a low volume rise.
NDN: Forecast 10-7-03 in conjunction with earnings. All the way back to the 50 day MVA as it was not ready to make the breakout from the trading range.
ORLY: Forecast 10-21-03. Settling down some so may be ready to make the move.
PIXR: No announcement with the shareholder meeting on 9-5-03. Back to the 10 day MVA on low volume. Still very solid.
ROST: Forecast 11-18-03 before the market with earnings. All the way to the 18 day MVA.
SYK: Forecast 10-15. Not doing it, falling below the 18 day MVA.
UOPX: Forecast to announce a split on 9-22 with earnings.
XRAY: Forecast to announce 10-21-03. Not bad, showing a doji at the 18 day MVA in the reverse head and shoulders.
We are putting full write-ups of those pre-announcement stocks that are ready to make moves. As the other pre-announcement candidates reach new buy points we will put them on as well. We want to keep the report focused on those stocks ready to make moves. The following is a summary table of current pre-announcement plays.
New Pre-Announcement Plays:
Play Date: 09/06/2003
GILD (Gilead Sciences--$66.86; -0.47; optionable): Biotechnology. Forecast to announce a split on 10-30-03 in conjunction with earnings. The company has not released a time for the announcement.
BACKGROUND: Last announced a 2 for1 split on 1-30-02 in conjunction with a board meeting. The stock price was $67. The annual shareholder meeting was on 5-21-03 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/g/gild.html
STATUS: Flat base. GILD was an early leader in the rally, blasting out of a base in March and rallying up the short term MVA to 70. That last move was started with a gap higher that signaled the end of that first run. It has since worked laterally in an 8 week base, coming back to test the 50 day MVA (62.52) at the bottom and then working its way back up. We are looking to take positions on a strong break higher over the recent highs. Then we will look for more positions as it moves over the recent highs at 70. It may take a few more sessions to work laterally over the 18 day MVA (65.40) before making the break higher.
Volume: 2.81M Avg Volume: 3.694M
BUY POINT: $68.45 Volume=5M Target=$80 Stop=$65.28
POSITION: GDQ KM - Nov. $65c (63 delta) or GDQ AN - Jan. $70c (41 delta) &/or Stock
http://www.investmenthouse.com/cs/gild.html
Play Date: 09/06/2003
JAH (Jarden--$33.25; +0.07; no options): Rubber & plastics. Forecast to announce a split on 10-27-03 in conjunction with earnings. The company has not confirmed this date, but based upon our research this is the date for the announcement.
BACKGROUND: Last announced a split 2 for1 split on 5-6-03 in conjunction with a board meeting. The stock price was $37.10. The annual shareholder meeting was on 4-24-03 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/j/jah.html
STATUS: Cup w/handle. JAH has enjoyed quite a run, and is now working on the handle to a 4 month base, the third in its run. That still gives it plenty of upside room. Solid 4 to 1 accumulation in the current base with solid money flow and relative strength. A very nice, flat handle, and we just need to be patient and let the stock make the breakout move.
Volume: 138.2K Avg Volume: 167.5K
BUY POINT: $33.72 Volume=270K Target=$40.45 Stop=$32.12
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cs/jah.html
Continuing Pre-Announcement Plays:
Play Date: 08/26/2003
FDS (Factset Research--$49.91; -0.77; optionable): Computer software information and delivery. Forecast to announce a split on 9-16-03 in conjunction with earnings.
BACKGROUND: Last announced a 2 for 1 split on 1-13-00 at a stock price of $69.
http://biz.yahoo.com/p/f/fds.html
STATUS: Test breakout. FDS blasted from a 1.5 month base Tuesday and continued higher on strong volume. It hit 52.50 and is now coming back to make a test of the move, testing the 10 day MVA (49.51) on lower, below average volume. Nice volume on the breakout, and as happens 50% of the time, a stock comes back to test the breakout move and provide another point to get in.
Volume: 226.9K Avg Volume: 377.227K
BUY POINT: $50.38 Volume=600K Target=$59.88 Stop=$48.52
POSITION: FDS LJ - Dec. $50c (48 delta) &/or Stock
http://www.investmenthouse.com/cs/fds.html
Play Date: 08/28/2003
KRON (Kronos--$58.72; -0.28; no options): Employee planning, tracking systems. Forecast to announce a split on 10-28-03 in conjunction with earnings. The company has not confirmed a time for the release.
BACKGROUND: Last announced a 3 for 2 split on 10-25-01 in conjunction with a board meeting. The stock price was $41. This date was a day after earnings were released. The annual shareholder meeting was on 2-6-03 at which time no additional shares were authorized. The company has sufficient shares for a 2 for 1 split.
http://biz.yahoo.com/p/k/kron.html
STATUS: Double bottom w/handle. Volume was up and above average Friday as KRON continues to work in a very nice 2 month base. It has been showing dojis in a tight range the past two sessions as KRON readies for the breakout. Solid 3 to 1 accumulation. Money flow is excellent, and relative strength is ready to breakout. Being patient.
Volume: 226.737K Avg Volume: 153.09K
BUY POINT: $60.62 Volume=248K Target=$70 Stop=$56.55
POSITION: - Stock (only Oct. options right now)
http://www.investmenthouse.com/cs/kron.html
End part 2 of 3
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