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trade stock, stock watch
Begin Part 2 of 2
TEAM TRADES
BRO: On the SSR and in a flat base, we were looking for BRO to make a move. It had shown some volume spikes three weeks ago and then volume died down. Today it roared up early on strong volume, and we wanted to get in. No options, so when the stock hit the buy point at 42.84 about a half hour into the session we were very interested. The stock ran up to 43 and then pulled back to test the move. We decided to get in if it broke over that first high, so we put in an order at 43.03. The stock moved on up and the trade was done. We were not done, however, as the stock continued to perform well the entire session. So, we looked again before the close and saw strong volume. The stock had pulled back a bit from 44.20 down to 44, and we were interested in more stock. We fired out a Market Alert and then put in a quick order at the ask that was also taken care of and the stock closed near 44.25 on strong volume. That was averaging up into a position.
BJ: A retailer that has been performing very well, we were looking for BJ to breakout to a new high, and today it did just that. It hit the pivot of 55 about an hour into the session and the Market Alert went off. The stock had made a strong gap move to the pivot point, so another Market Alert went out and then we put in our order to buy. Again we were not done with this stock. A poor market, but the stock was behaving well. We checked heading into the close and the stock was showing excellent volume but had pulled back a quarter or so from the session high. We wanted to use this weakness to add to positions. Another Market Alert was fired off detailing this plan. Then we were back at it and picked up some more at the ask with about 15 minutes left in the session.
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THE PLAYS:
THE PLAYS:
Continuing Plays:
PDCO (Patterson Dental--$35.99; +1.68; optionable): Wholesale equipment.
http://biz.yahoo.com/p/p/pdco.html
STATUS: Broke from a saucer in May, and after pulling back to the 50 day MVA (32.73) in something of a pennant it has made another big move over the past two sessions. Today it blasted up on slightly lower volume of 507,000 (average 208,200), pulling back from its intraday high of 36.88 to close (prior breakout high 36. We will see if the pullback leads to some profit-taking, but we are watching for a solid move back up. Target: 41.
BUY POINT: From here or a move back up after a lower-volume test of the 35 range. Stop: 32.55.
POSITION: Stock and/or October $30 calls to buy (DOU JF - very low open interest).
UNFI (United Natural Foods--$20.66; +0.41; no options): Food wholesale
http://biz.yahoo.com/p/u/unfi.html
STATUS: Made a bit of a move back up today from its 10 day MVA (20.36), although volume continued to be very low at 72,700 (average 176,400). The stock has been looking good as it moves steadily up along the short-term MVA's, recently having broken from its cup pattern (hitting a high of 21.80). We will see if, after this test of support, the stock can generate some more volume on a move up. Target: $23-24.
BUY POINT: Aggressive: Over 21 with increased volume near the average. Stop: 19.53. Breakout: Over 21.80 on above average volume. Stop: 20.27.
POSITION: Stock.
HB (Hillenbrand--$57.40; 0.00; optionable (HB): Diversified services
http://biz.yahoo.com/p/h/hb.html
STATUS: Has pulled back again to recent support at its 10 day MVA (57.17), showing a tight doji over that level today. The stock is moving in a somewhat lateral pattern after having made a strong breakout run from an ascending wedge throughout June. Having reached up several times up to the 58.50 range, but not making its through, we will see if it can make a strong push from the doji and gain strength. Target: 65. Money flow is huge, with good relative strength.
BUY POINT: 58.64, on continued strong volume (down to 158,900 today; average 135,000). Stop: 54.53.
POSITION: Stock and/or September $55 calls to buy (HB IK).
RE (Everest Re Group--$72.25; +0.18; optionable (RE): Insurance
http://biz.yahoo.com/p/r/re.html
STATUS: Pulling back after the breakout from its 6-month base when the stock reached 75.70 as a closing high, today it showed another doji after tapping the 18 day MVA at its low (71.64, in the upper range of its former handle). It has been an orderly, low volume pullback, but there was a bit more volume today (216,600; average 280,000), so we will see if it signals a strong move back up off of this pattern. Target: $82-85.
BUY POINT: Aggressive: A move over 73, on average or better volume. Stop: 67.89 (50 day MVA at 69.25). Breakout: 75.83, on volume in the range of 300,000. Stop: 70.34.
POSITION: Both buy points: Stock and/or October $70 calls to buy (RE JN).
LH (Laboratory Corp--$81.50; +2.60; optionable): Health Services. Split 2:1 June 11.
http://biz.yahoo.com/p/l/lh.html
STATUS: LH has held on nicely after its recent split in a handle to the cup that has been forming since the beginning of the year. Today it made a solid move up on stronger volume (625,900, average is 477,800), and is once again approaching its handle high of 82.50. Now we are looking for a clear breakout move over that level on significantly higher volume. Relative strength broke out, and money flow remains strong.
PLAY: Breakout: 82.63 on volume of 717,000 with stock and/or August $80 calls to buy (LH HP). Stop: 76.85.
New or revisited plays:
New:
COTT (Cott Corp--$11.41; +0.15; no options): Beverages.
http://biz.yahoo.com/p/c/cott.html
STATUS: The stock broke from a double bottom with handle in June, completing its cup pattern, then pulled back into a handle to that cup. It was moving in a tight, lateral consolidation over its 10 day MVA (11.18), but has tried to make a move up over the past few sessions, but cannot muster any volume (down to 69,100 today; average 193,000). A decent pattern but gradual moves up on low volume are not the best action in a handle. We will look for a strong breakout over the handle high of 11.74. Relative strength is challenging the prior breakout high. Target: 14.
BUY POINT: 11.87 on volume of 290,000. Stop: 11.03.
POSITION: Stock only.
Revisited plays:
BMS (Bemis--$40.99; +0.58; optionable): Packaging.
http://biz.yahoo.com/p/b/bms.html
STATUS: In an ascending wedge handle to a 15-month old cup, the stock is trying to break out, and although it closed over the former highs in the pattern today, volume remained below the average at 137,800 (average is 141,000). At its low the stock tapped its 10 day MVA (40.14), so we could see that level tested again before a breakout move. However, we will watch for a stronger move from here. Relative strength has broken out, and the stock shows strong money flow. Target: 47.
BUY POINT: From here or after a test of the 10 day, a move to 41.13 on volume of 190,000. Stop: 38.13.
POSITION: Stock and/or October $35 calls to buy (BMS JG).
ROOM (Hotel Reservations--$48.05; +3.35; no options):
http://biz.yahoo.com/p/r/room.html
STATUS: Recently broke from a long, flat consolidation that was a handle to a cup formed in a lengthy rolling range. The breakout hit 50.99 before coming back to test the 18 day MVA (43.57), and today it blasted back up with big volume behind it (1.09 million; average 238,200). However, it hit up to 49.95 and pulled back to close; that can mean trouble, but we like what we see on this move. Great relative strength, money flow and buying. Target: 55.
BUY POINT: Over 49 on continued strong volume. Stop: 45.57. If we get a lower-volume pullback, we can look at positions on a strong move up after testing the 46 range. Stop: 42.78.
POSITION: Stock only.
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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