stock picking, stock option

Begin part 2 of 3

THE PLAYS

As the market sells we get more conservative upside and look to more downside plays. Even then we are not taking wholesale downside positions as the correction could be half way over point-wise already. We will look for the downside positions to set up a bit more aftertwo back to back downsessions. At that point they should be ready for the next downleg.

Weekend play results:
HILL: Started the move up in the range but no volume yet.
NYB: Still working on the nice handle on low volume.
TUES: Started lower but showed a doji. May test up toward the 50 day again, but in trouble.
SPRT: Nice move up off the 10 day on rising volume.

New Plays for Tuesday:

Upside:

Play Date: 09/29/2003
PDYN (Paradyne Networks--$2.42; +0.22; no options): Telecom equipment
http://biz.yahoo.com/p/p/pdyn.html
STATUS: Double bottom w/handle. PDYN is in the process of breaking out of the handle to a 4 month base. The pattern formed over the 200 day MVA (1.59), using that as the point where it double bottomed. Accumulation in the base is an excellent 6 to 2 and money flow is surging to a new high. PDYN tapped the 50 day MVA four sessions back and volume has surged since. Monday PDYN shot higher on excellent volume, ready for the breakout.
Volume: 677.15K Avg Volume: 181.545K
BUY POINT: $2.55 Volume=450K Target=$3.24 Stop=$2.24
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/pdyn.html

Play Date: 09/29/2003
UNTD (United Online--$37.1; +1.95; optionable): Internet service provider (Juno, Netzero)
http://biz.yahoo.com/p/u/untd.html
STATUS: Test 50 day MVA. A current play and a leader that was taken out and kicked around some last week, UNTD found the 50 day MVA (35.50) Friday on surging volume. That can be a good signal as it held that level. Hold at the 50 day MVA on strong volume potentially good. Sell through the 50 day MVA on strong volume, bad. Monday UNTD was bouncing, and it was bouncing on strong volume. That indicates the buyers that held it at the 50 day MVA were at it again, picking up the stock at a lower price. It has made a long run up the short term MVA (10 and 18 day MVA) without a 50 day MVA. Strong stocks will make the 4 to 5 runs, test the 50 day MVA, and then run again. We are looking to catch this leader here.
Volume: 2.496M Avg Volume: 1.199M
BUY POINT: $37.62 Volume=2.2M Target=$42.88 Stop=$35.25
POSITION: QAB LG - Dec. $35c (68 delta) &/or Stock
http://www.investmenthouse.com/cd/untd.html

Downside:

Play Date: 09/29/2003
SIAL (Sigma-Aldrich--$52.87; +0.81; optionable): Chemicals
http://biz.yahoo.com/p/s/sial.html
STATUS: Put. After moving laterally over the 50 day MVA (54.34) for 4 months, SIAL tanked at the end of last week on strong volume. It caught some support at 52 from a May high and bounced but on lower volume. Looking for a test of the 18 day MVA (53.83) as that acts as resistance once a stock starts a downtrend. We want to see lower volume as it moves up to that point in the conitnuing relief bounce and then turn over on rising volume. That is when we move in as that shows the sellers jumped back on the stock.
Volume: 657.063K Avg Volume: 498.272K
BUY POINT: $53.35 Volume=625K Target=$50.15 Stop=$54.02
POSITION: IAQ WK - Nov. $55p (-68 delta)
http://www.investmenthouse.com/cd/sial.html

End part 2 of 3

stock picking
stock option