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trade stock, stock strategy
Begin part 3 of 3
THE PLAYS
Good movers Wednesday: TEO; SOX; ADVP; BRLI; CY; ESPR; MCHP; RHAT
Best Plays:
1) KOSP: Can run well and is moving on strong volume.
2) TUTS: Strong volume as it starts the breakout run.
3) AKAM: Going to make the breakout in the morning.
4) ASL: Looks like it shook out the sellers.
5) NUFO: Testing the breakout and looks ready.
6) TARO: Starting up and now just needs some volume.
NEW PLAYS:
Upside:
Play Date: 10/29/2003
IDTI (Integrated Device Tech--$16.07; +0.48; optionable): Semiconductors
http://biz.yahoo.com/p/i/idti.html
STATUS: Reverse head and shoulders. You can also call this a double bottom with handle breakout. Either way it is a solid pattern sporting strong 3 to 1 accumulation (3 up weeks on rising volume to 1 down week on rising volume), surging money flow, and a relative strength breakout. All of that shows a lot of big money accumulation as well as a solid foundation for a strong move higher. After testing the 18 day MVA (14.41) at the bottom of the right shoulder IDTI jumped higher Tuesday and Wednesday on rising though still slightly below average volume. Want to see volume break higher as the stock continues the breakout move.
Volume: 2.194M Avg Volume: 2.17M
BUY POINT: $16.22 Volume=3.3M Target=$19.55 Stop=$14.97
POSITION: ITQ BC - Feb. $15c (67 delta) &/or Stock
http://www.investmenthouse.com/ct/idti.html
Play Date: 10/29/2003
KOSP (KOS Pharmaceuticals--$39.8; +1.19; optionable): Drugs
http://biz.yahoo.com/p/k/kosp.html
STATUS: Cup. Broke out from a 6 month cup with handle base in May and rallied to 42. After that run it needed a breather, and it fell back into the current 6 week base to do just that. Volume has been lower and mostly below average, a good indication there is no real dumping of the stock. Indeed, accumulation is a strong 3 to 1 and money flow is strong and moving up ahead of price. Volume jumped the past two sessions as KOSP jumped off the bottom of the base. This stock is a proven winner, and we are looking at moving in on a break over 40 on continued strong volume.
Volume: 830.525K Avg Volume: 484.454K
BUY POINT: $40.25 Volume=727K Target=$48.32 Stop=$37.28
POSITION: KQW BH - Feb. $40c (55 delta) &/or Stock
http://www.investmenthouse.com/ct/kosp.html
Play Date: 10/29/2003
TUTS (Tut Systems--$6.07; +0.34; no options): Telecom equipment
http://biz.yahoo.com/p/t/tuts.html
STATUS: Ascending triangle. TUTS is showing a lot of life in its 5 week base that formed on the heels of a 3 month cup. These base on base patterns, particularly the cup followed by the triangle, tend to lead to explosive moves and solid gains. Accumulation in the triangle is a solid 2 to 0, and the price/volume action is good with a few large volume spikes on up sessions as it moves through the base. Those indicate a lot of buying activity. It is making a series of higher lows below a constant top near 6. That builds pu the pressure until it blasts out on a strong breakout that is typical of this pattern. Excellent money flow and relative strength ready to breakout.
Volume: 319.377K Avg Volume: 98.636K
BUY POINT: $6.28 Volume=175K Target=$7.72 Stop=$5.84
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/tuts.html
Play Date: 10/29/2003
VLNC (Valence Technology--$4.15; +0.15; no options): Lithium-ion battery product development
http://biz.yahoo.com/p/v/vlnc.html
STATUS: Cup w/handle. VLNC is trying to start the breakout move from a 5 month base. Accumulation in the pattern is an excellent 7 to 2 and the price/volume action during the base was solid: very low and below average at the bottom of the pattern and then swelling as it rallied up off the lows and hit the pre-correction high near 4.50. Then it backed off the past two weeks to form the handle, moving back down on much lower, below average volume. It tapped the 50 day MVA (3.80) and bounced. It was up Wednesday but on low, below average volume. Looks solid, but need to see strong trade as it moves through the buy point.
Volume: 194.613K Avg Volume: 264.045K
BUY POINT: $4.28 Volume=396K Target=$5.55 Stop=$3.98
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/vlnc.html
CONTINUING PLAYS:
Upside:
Play Date: 10/06/2003
ABMD (Abiomed--$8.98; -0.19; optionable): Medical instruments
http://biz.yahoo.com/p/a/abmd.html
STATUS: Flying plateau. After breaking out of a 4 month cup with handle base in late September, ABMD has moved laterally for 4 weeks on low, below average volume. This is a consolidation pattern where the stock digests the gain and sets up for the next move. It has traded in a tight range using the 18 day MVA (8.77) on the tests loweras it makes higher and higher lows as it holds below 9ish. Strong money flow and relative strength. Just waiting for a strong volume break higher.
Volume: 87.666K Avg Volume: 104.818K
BUY POINT: $9.12 Volume=175K Target=$10.95 Stop=$8.48
POSITION: IBU LU - Dec. $7.50c (73 delta) &/or Stock
http://www.investmenthouse.com/ct/abmd.html
Play Date: 10/21/2003
AKAM (Akami Technologies--$5.96; -0.03; optionable): Internet software
http://biz.yahoo.com/p/a/akam.html
STATUS: Testing the breakout. Volume spiked Wednesday but could not go anywhere. Not until after hours, that is. It reported strong earnings results and was up over $1. Nice breakout from the consolidation test of the 18 week base. We will look for positions after the first run higher. Another strategy is to jump in very early, right at the open, but that is a bit riskier.
Volume: 4.873M Avg Volume: 1.762M
BUY POINT: $6.42 Volume=2.4M Target=$8 Stop=$5.88
POSITION: UMU AA - Jan. $5c (77 delta) &/or Stock
http://www.investmenthouse.com/ct/akam.html
Play Date: 10/21/2003
ASL (Ashanti Goldfields--$11.27; +0.19; optionable): Gold mining
http://biz.yahoo.com/p/a/asl.html
STATUS: Cup w/handle. Gapped down to the simple 50 day MVA (10.72) on the open but proceeded to rally back and post a gain on strong volume. This may have been the move that shakes out the last sellers and clears the decks for ASL to make the breakout move from its 6 week base. Solid 2 to 0 accumulation coupled with strong money flow.
Volume: 1.752M Avg Volume: 892.909K
BUY POINT: $11.62 Volume=1.3M Target=$14.22 Stop=$10.81
POSITION: ASL CB - Mar. $10c (80 delta) &/or Stock
http://www.investmenthouse.com/ct/asl.html
Play Date: 10/27/2003
CORI (Corillian Corp.--$6.01; +0.11; no options): Internet service provider
http://biz.yahoo.com/p/c/cori.html
STATUS: Test 18 day MVA. Still testing the 18 day MVA (5.56) after trying to make the move Tuesday as it gapped higher and collapsed back. Still holding the breakout on this test of its 6 week flat base. Excellent money flow still leading higher and a solid relative strength breakout. Still looks solid for the next break higher.
Volume: 665.936K Avg Volume: 382.5K
BUY POINT: $6.19 Volume=550K Target=$7.75 Stop=$5.82
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/cori.html
Play Date: 10/28/2003
ILXO (Ilex Oncology--$21.07; +0.22; optionable): Medical labs
http://biz.yahoo.com/p/i/ilxo.html
STATUS: Double bottom. Still trying the breakout from a 17 week double bottom pattern with strong 7 to 3 accumulation, but the volume was not there again, and it fell back from the high (21.54). As noted Tuesday, it is at the 'hump' in the middle of the pattern. The action Wednesday indicates it may try to slide laterally for a few sessions to form a handle before making the breakout move.
Volume: 399.602K Avg Volume: 464.909K
BUY POINT: $21.42 Volume=692K Target=$25.75 Stop=$19.72
POSITION: IUE BD - Feb. $20c (62 delta) &/or Stock
http://www.investmenthouse.com/ct/ilxo.html
Play Date: 10/06/2003
MER (Merrill Lynch--$58.34; +0.6; optionable): Investment brokerage
http://biz.yahoo.com/p/m/mer.html
STATUS: Flat base. After hitting the 50 day MVA (55.38) with the rest of the market last week MER bounced on some rising, above average volume. It is now approaching the October high (59.20), and the renewed interest in the financial stocks may finally provide the breakout move. Volume has been higher but not huge. Want to see another good volume upside session underway to take positions.
Volume: 5.284M Avg Volume: 5.044M
BUY POINT: $58.60 Volume=6.5M Target=$67.25 Stop=$55.03
POSITION: MER AK - Jan. $55c (64 delta) &/or Stock
http://www.investmenthouse.com/ct/mer.html
Play Date: 09/29/2003
NUFO (New Focus--$5.21; -0.02; no options): Semiconductor integrated circuits
http://biz.yahoo.com/p/n/nufo.html
STATUS: Testing the breakout. After surging higher two weeks back and reaching 5.50, NUFO has come back to test the move, holding over the 18 day MVA (5.09) on the close and price support at 5 on the lows. Strong money flow continues to move higher even as the stock moves laterally and lower on very low volume. Looking for a break over the highs of the last week (5.28), and it needs to be on volume.
Volume: 347.459K Avg Volume: 862.454K
BUY POINT: New: $5.32 (orig. $4.82) Volume=1.2M Target=New positions: $6.38; orig. positions $5.95 Stop=$4.98
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/nufo.html
Play Date: 10/18/2003
SVNT (Savient Pharma--$6.04; +0.04; optionable): Biotechnology
http://biz.yahoo.com/p/s/svnt.html
STATUS: Testing the breakout. And still working laterally over the 18 day MVA (5.91) as it consolidates the breakout from its 12 week cup with handle base. Solid 5 to 2 accumulation in the pattern and a relative strength breakout support the move. Money flow is very strong and we are just waiting for the strong break higher to continue the breakout move.
Volume: 265.882K Avg Volume: 433.909K
BUY POINT: $6.38 Volume=678K Target=$7.98 Stop=$5.93
POSITION: QTG DA - April $5c (85 delta) &/or Stock
http://www.investmenthouse.com/ct/svnt.html
Play Date: 10/08/2003
TARO (Taro Pharmaceuticals--$64.94; +1.56; optionable): Drugs
http://biz.yahoo.com/p/t/taro.html
STATUS: Testing the 18 day MVA. Started moving up off the 10 day MVA (63.35) Wednesday but volume, though higher, was still well below average. Looks ready to make the next move after its nice 2 week lateral consolidation of the early October breakout from its 12 week base. Now all it needs to show is volume.
Volume: 182.525K Avg Volume: 316.454K
BUY POINT: New: $65.12 (orig. $61.51) Volume=501K Target=$73 Stop=$61.32
POSITION: QTT AL - Jan. $60c (56 delta) &/or Stock
http://www.investmenthouse.com/ct/taro.html
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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