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Begin part 2 of 3
Support and Resistance
Nasdaq: Closed at 1932.21
Resistance: The near top of the channel (1966). October high (1967). The second, higher channel hit in September is at 1980. Then 2000 to 2050, the early January 2002 double top.
Support: The September high (1913). The 18 day MVA (1909). 1860 to 1865. The 50 day MVA (1861). The March/August up trendline (1858).
S&P 500: Closed at 1050.71
Resistance: 1054 (October highs). 1059, the December to June upper channel line. 1050 and 1080 from February 2002 lows. 1100 represents some early 2001 lows. 1150 to 1175, the early 2002 double top.
Support: 1040, the September highs. The 10 day MVA (1042) and the 18 day MVA (1039). 1030 to 1032 (early September highs). The exponential 50 day MVA (1025). The top of the summer range at 1015. 1010 the early September highs. 975 (December 1997 peak).
Dow: Closed at 9801.12
Resistance: 9800 (April and May 2002 lows) and the October high (9850). 10,000 is the candle that attracts the moth.
Support: The 18 day MVA (9691). 9686 (September high). 9588 the early September highs. The exponential 50 day MVA (9558). 9500 (June 2002 lows) is the top of the summer range.
Economic Calendar
11-03-03
ISM Index, October (10:00): 55.8 expected, 53.7 September.
Construction spending, September (10:00): 0.2% expected, 0.2% August.
11-05-03
ISM Services, October (10:00): 62.0 expected, 63.3 September.
Factory Orders, September (10:00): 0.6% expected -0.8% August.
11-06-03
Initial jobless claims (8:30): 380K expected, 386K prior.
11-07-03
Non-farm payrolls, October (8:30): 50K expected, 57K September.
Unemployment rate, October (8:30): 6.1% expected, 6.1% September.
Hourly earnings, October: 0.2% expected, -0.1% September.
Average workweek: 33.8 expected, 33.7 September
Wholesale inventories, September (10:00): 0.2% expected, -0.2% August.
Consumer credit, September (3:00): $5.5B expected, $8.2B August.
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: ARIA; EGHT; EVCI; MANU; WFII; CELL
Best Plays:
1) IDXC: Starting a strong volume breakout from an explosive pattern.
2) TRPH: Ditto.
3) INGP: Nice pattern, high volume break higher.
4) ASCA: Ready to finish the dive lower.
5) MANU: Making the next breakout.
6) RETK: Ready for the next leg higher.
NEW PLAYS:
Upside:
Play Date: 11/01/2003
ARIA (Ariad Pharma--$7.09; +0.24; optionable): Biotechnology
http://biz.yahoo.com/p/a/aria.html
STATUS: Ascending triangle. A current play that has set up very well for the next leg. ARIA is working on the breakout from a 5 week triangle that has worked up the 18 day MVA (6.64) on the lows as it holds below a constant top near 7. Strong money flow and relative strength ready for the breakout, ARIA is showing strong 3 to 0 accumulation in the current base (3 up weeks on rising volume to 1 down week on rising volume). Friday it was moving on stronger, above average volume.
Volume: 627.76K Avg Volume: 462.454K
BUY POINT: $7.22 Volume=694K Target=$8.68 Stop=$6.71
POSITION: UAQ BU - Feb. $7.50c (56 delta) &/or Stock
http://www.investmenthouse.com/ct/aria.html
Play Date: 11/01/2003
IDXC (IDX Systems--$26.2; +1.36; optionable): Health information service
http://biz.yahoo.com/p/i/idxc.html
STATUS: Ascending triangle. This is a pattern that shows up in a strong market. Stocks in the midst of strong moves use this pattern to consolidate. It is one of our favorites because pressure builds up from the higher lows below the constant top and the breakouts are often explosive. IDXC started a move toward a breakout Friday on a solid volume surge. Accumulation is a strong 3 to 0 in the 5 week base. Money flow is moving strong and ahead of price while relative strength is breaking out. A solid pattern and looking to jump on with a further breakout move.
Volume: 321.746K Avg Volume: 144.272K
BUY POINT: $26.32 Volume=225K Target=$31.62 Stop=$24.62
POSITION: XQW BE - Feb. $25c (65 delta) &.or Stock
http://www.investmenthouse.com/ct/idxc.html
Play Date: 11/01/2003
INGP (Instinet Group--$6.18; +0.28; optionable): Electronic trading service
http://biz.yahoo.com/p/i/ingp.html
STATUS: Cup w/handle. INGP is making the breakout from its 15 week base sporting outstanding 7 to 2 accumulation. It has thrown some big volume spikes the past few weeks as it formed the handle over the 18 day MVA (5.70). Surging money flow and a relative strength breakout as INGP moved toward the breakout Friday. Outstanding action and looking to get on board here with a continued upside volume move.
Volume: 1.895M Avg Volume: 602.09K
BUY POINT: $6.36 Volume=903K Target=$7.92 Stop=$5.91
POSITION: UAU BA - Feb. $5c (82 delta) &/or Stock
http://www.investmenthouse.com/ct/ingp.html
Play Date: 11/01/2003
TRPH (Tripath Technology--$5; +0.46; no options): Semiconductor
http://biz.yahoo.com/p/t/trph.html
STATUS: Ascending triangle. After surging up from July and peaking just over 5 TRPH slipped into this 5 week base. Accumulation is a solid 3 to 0, money flow is racing higher, and relative strength is ready to breakout. Thursday and Friday volume surged as TRPH moved up toward the breakout. Again, this is one of our favorite patterns as it builds pressure and then provides explosive breakouts. It is also a sign of a strong stock in a strong market.
Volume: 2.34M Avg Volume: 1.092M
BUY POINT: $5.21 Volume=1.8M Target=$6.52 Stop=$4.85
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/trph.html
Downside:
Play Date: 11/01/2003
AAI (Airtran Holdings--$16.21; -1; optionable): Regional airlines
http://biz.yahoo.com/p/a/aai.html
STATUS: Head and shoulders. A sector that is making money but has come under heavy selling pressure. AAI formed the left shoulder in September, rallied over 20 in early October to form the head, and is now rolling over and falling through the 50 day MVA (16.45) on high volume to form the right shoulder. Money flow is tanking and AAI is under heavy distribution. Looking for a further drop on volume to enter the play for a run to 14 as the initial target, but we are looking at 13 as well.
Volume: 2.561M Avg Volume: 1.827M
BUY POINT: $16.04 Volume=250K Target=$14 Stop=$16.62
POSITION: AAI XW - Jan. $17.50p (-66 delta)
http://www.investmenthouse.com/cd/aai.html
Play Date: 11/01/2003
ASCA (Ameristar Casinos--$21.12; -1.13; optionable): Ameristar Casinos
http://biz.yahoo.com/p/a/asca.html
STATUS: Put. After a decent lateral move over the 50 day MVA (24.13) where ASCA tried to form a handle to a long-term base (17 months), ASCA was hammered lower Wednesday with a big gap lower. It made a weak rebound attempt Thursday and then was selling again Friday. Money flow is diving and it is under heavy distribution. Looking for it to continue down from here toward our initial target. If it is selling hard when it hits that level we will be inclined to let sell on down toward the 200 day MVA at 17.55.
Volume: 235.547K Avg Volume: 123.272K
BUY POINT: $20.92 Volume=185K Target=$18.85 Stop=$22.08
POSITION: UWT XX - Dec. $22.50p (-65 delta)
http://www.investmenthouse.com/ct/asca.html
CONTINUING PLAYS:
Upside:
Play Date: 10/06/2003
ABMD (Abiomed--$8.9; -0.13; optionable): Medical instruments
http://biz.yahoo.com/p/a/abmd.html
STATUS: Flying plateau. Still working laterally in a very tight range over the 18 day MVA (8.81) following the breakout from a 4 month cup with handle base in late September. The past 4 weeks it has traded in a tight range on below average trade. Excellent money flow and relative strength. Just being patient.
Volume: 37.956K Avg Volume: 106.318K
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: 10/28/2003
CRA (Applera--$13.37; +0.1; optionable): Scientific & technical instruments
http://biz.yahoo.com/p/c/cra.html
STATUS: Cup w/handle. Looking very good here in the 5 month base. CRA surged up off the 50 day MVA (11.83) two weeks back and then spent the last part of the week working laterally over 13 on lower, below average volume, forming another handle to the base. Money flow continued to surge higher and relative strength is set for the breakout. Outstanding 8 to 3 accumulation. Looking for the big volume breakout here to move in.
Volume: 317.1K Avg Volume: 504K
BUY POINT: $13.62 Volume=747K Target=$16.35 Stop=$12.58
POSITION: CRA CV - Mar. $12.50c (71 delta) &/or Stock
http://www.investmenthouse.com/ct/cra.html
Play Date: 10/22/2003
GBN (Great Basin Gold--$1.91; +0.05; no options): Gold mining
http://biz.yahoo.com/p/g/gbn.html
STATUS: Testing breakout. A new issued in July, GBN formed its first base from September to October, a nice little cup with handle. Volume surged mid-month as GBN made the breakout. It hit near 2 and started a lateral move, edging slightly lower as it worked laterally. Friday it tapped toward the 10 day MVA (1.79) on the low and rebounded. When the 10 day moves up below a stock on this kind of move, that usually sends it off on the next leg. It may take another day or two, but looks ready to move more. Want to see it take out the recent highs at 1.96.
Volume: 375.9K Avg Volume: 229.363K
BUY POINT: New: $1.98 (orig. $1.86) Volume=300K Target=$2.42 Stop=$1.77
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/gbn.html
Play Date: 10/29/2003
KOSP (KOS Pharmaceuticals--$39.96; +0.37; optionable): Drugs
http://biz.yahoo.com/p/k/kosp.html
STATUS: Cup w/handle. After a nice surge off the 50 day MVA (35.95) near the bottom of the pattern, KOSP starteed moving laterally Wednesday. This is the preferred action as it works to form a handle to the base and get rid of the remaining sellers before the next strong advance. KOSP broke out from a 6 month cup with handle base in May and rallied to 42. It is taking a breather in the current 6 week base showing strong 3 to 1 accumulation and strong money flow. Very nice handle forming and we want to see a strong breakout from this market leader.
Volume: 258.797K Avg Volume: 492.818K
BUY POINT: $40.25 Volume=727K Target=$48.32 Stop=$37.48
POSITION: KQW BH - Feb. $40c (55 delta) &/or Stock
http://www.investmenthouse.com/ct/kosp.html
Play Date: 10/11/2003
MANU (Manugistics Group--$7.22; +0.63; optionable): Application software
http://biz.yahoo.com/p/m/manu.html
STATUS: Flying plateau. Broke out of a nice 16 week cup with handle base in October on an excellent volume surge. It rallied to 7 and has since moved laterally over the 18 day MVA (6.53) on mostly lower, below average volume. Friday it surged on very strong trade as it broke higher from the plateau. Looks ready for more gains. Solid 7 to 3 accumulation and a relative strength breakout set the foundation for another strong move higher from here.
Volume: 2.644M Avg Volume: 950.181K
BUY POINT: $6.77 Volume=1.4M Target=$8.15 Stop=$6.43
POSITION: ZUQ AA - Jan. $5c (82 delta) &/or Stock
http://www.investmenthouse.com/ct/manu.html
Play Date: 10/30/2003
MKTY (Mechanical Technology--$6.6; -0.01; no options): Scientific & technical instruments
http://biz.yahoo.com/p/m/mkty.html
STATUS: Ascending triangle. Could not extend Thursday's breakout move, holding flat on lower though still above average volume. The market prevented a stronger move from the nice 5 week base sporting solid 2 to 0 accumulation. This base follows a 3.5 month flat base that yielded a huge late September breakout. It is set to make the next move, and we will let it reload and rally agqain on continued strong volume.
Volume: 262.753K Avg Volume: 125K
BUY POINT: $6.72 Volume=200K Target=$8.08 Stop=$6.21
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/mkty.html
Play Date: 09/29/2003
NUFO (New Focus--$5.19; +0.03; no options): Semiconductor integrated circuits
http://biz.yahoo.com/p/n/nufo.html
STATUS: Testing the breakout. NUFO broke out of consecutive cup with handle bases, the first in June, the second in early October. It rallied to 5.50 on that second breakout and is now coming back ot test the move with a nice, below average volume pullback to the 18 day MVA (5.10). Money flow is surging higher even as NUFO tests back to the 18 day MVA. The pattern is tightening up, indicating the next break higher is imminent. Looking for the telltale signs of the move: a big volume surge as it heads higher. That volume indicates the bigger players are back in the stock and ready to push it higher.
Volume: 454.012K Avg Volume: 874K
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: 10/06/2003
RETK (Retek--$10.02; -0.16; optionable): Internet software services
http://biz.yahoo.com/p/r/retk.html
STATUS: Test breakout. RETK broke from a 4 month ascending triangle in early October, rallying to 11 on the high. A super breakout, and now RETK is taking its first breather, a two week lateral move over the 10 day MVA (9.90). When the 10 day rises to meet the stock price in this type of pattern that is usually the catalyst that sends the stock on the next move higher. Strong money flow still leading higher and a relataive strength breakout. Want to see another volume surge as it clears the recent tops at 10.50.
Volume: 503.221K Avg Volume: 548.409K
BUY POINT: New: $10.58 (orig. $8.49) Volume=776K Target=New positions: 12.72 (orig. positions $10.25) Stop=$9.72
POSITION: QRD AU - Jan. $7.50c (66 delta) &/or Stock
http://www.investmenthouse.com/ct/retk.html
End part 2 of 3
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