stock watch, stock split

Begin Part 2 of 2

Best Plays, Part 2:
1) UNFI: Still looks good
2) HB: Tightening its range
3) ELN: Strong move
4) BVN: Another solid move toward breakout
5) SRZ: Low volume consolidation
6) JKHY: Could jump on MSFT news

CONTINUED PLAYS:

BREAKOUTS:

APOG (Apogee Enterprises--$13.86; +0.11; no options): Materials & Construction
http://biz.yahoo.com/p/a/apog.html
STATUS: APOG made a solid breakout move, continuing up Tuesday and hitting up to 14.40 but closing off of that high. It followed up today with a doji after testing 13.15 at its low, as volume continued to be very strong (down to 546,100; average 166,400). We could see a test back to the 13 range again, but if it can hold and make a strong move back up, we can look at catching it again. Target: $15.
BUY POINT: A move up on continued strong volume after a lower-volume test of the 13 range. Stop: 12.09.
POSITION: Stock.

UNFI (United Natural Foods--$20.85; +0.19; no options): Food wholesale
http://biz.yahoo.com/p/u/unfi.html
STATUS: The stock continues to look good, and currently is testing support again (the 10 & 18 day MVA's, at 20.45 and 19.98, respectively, and other price support at 20). After some very low volume in recent sessions, today's move up was accompanied by a nice volume spike (229,200; average 176,400), so that could be telling us to get ready for a move. The high is 21.80. Target: $23-24.
BUY POINT: Aggressive: A move over 21 on increased volume. Stop: 19.53. Breakout: Over 21.80 on increased volume. Stop: 20.27.
POSITION: Stock.

PDCO (Patterson Dental--$36.31; +0.32; optionable): Wholesale equipment.
http://biz.yahoo.com/p/p/pdco.html
STATUS: Made a huge breakout move Tuesday off of the preceding session's solid gain. After hitting up to 36.88 but pulling well off of that level to close, the stock showed a 'star' doji today on much lower volume of 248,700 (average 208,200). We could get a test back off of this pattern, and on that move we will look for it to hold the 35 level for a run back up. Target: 41.
BUY POINT: Pullback: A strong move back up after a lower-volume pullback holding the 35-36 range. Stop: 32.55.
POSITION: Stock and/or October $30 calls to buy (DOU JF - very low open interest).

TESTS OF THE BREAKOUT: Some of these stocks are moving back on low volume to test the breakout. We often take profits on option plays when they start to pullback on the breakout move and then get back in when the stock bounces up off of the breakout point. This second move is where some of the biggest gains are made.

Continued:

ELON (Echelon--$27.43; +0.72; optionable (EUL): Software
http://biz.yahoo.com/p/e/elon.html
STATUS: Testing its breakout from the ascending wedge (that formed after the stock broke out of a cup with handle at the bottom of its 15-month base). The stock gapped up and pulled back yesterday to close back under recent support of the 10 day MVA (27.15), but after dipping below the 18 day (26.32) the stock was able to push back over the 10 day to close Wednesday. It was up after hours on the good Microsoft news. Volume was strong (423,900; average 351,000) but lower than what we saw on Tuesday's selling, so we will see if it can continue to hold here and make a move toward the breakout high of 32. Target: $35.
BUY POINT: Aggressive: 29, on continued strong volume. Stop: 26.97.
POSITION: Stock and/or November $25 calls to buy (EUL KE).

HB (Hillenbrand--$57.48; +0.08; optionable (HB): Diversified services
http://biz.yahoo.com/p/h/hb.html
STATUS: Has shown two consecutive tight (perfect today) dojis after having pulled back again to recent support at its 10 day MVA (57.22). The stock has been moving in a somewhat lateral pattern after making a strong breakout run from an ascending wedge throughout June. It has reached several times up to the 58.50 range, but has not been able to crack through. We will see if it can break through, looking at a target on that move of 65. Money flow is huge, with relative strength breaking out.
BUY POINT: 58.64, on continued strong volume (down to 146,300 today; average 135,000). Stop: 54.53.
POSITION: Stock and/or September $55 calls to buy (HB IK).

RE (Everest Re Group--$72.03; -0.22; 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. It has been an orderly, low volume pullback with the stock showing yet another doji today, holding over its 18 day MVA (71.68) and the upper range of its handle. Off of these dojis we are looking for a run back up. Target: $82-85.
BUY POINT: Aggressive: A move over 73, on average or better volume (279,300; today down to 163,700). Stop: 67.89 (50 day MVA at 69.13). 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).

ELN (Elan--$62.85; +1.45; optionable (ELN): Drugs
http://biz.yahoo.com/p/e/eln.html
STATUS: Has been pulling into a pennant since breaking from a cup with handle, holding over its up trendline connecting April-June closing lows (at 61), and today blasted up off of that level with an excellent volume surge (1.94 million; average 1.5 million). The recent intraday high in the pattern is 63.20, with the recent breakout high at 65. Target: 75.
BUY POINT: From here, on a move over 63.20 on continued strong volume. Stop: 58.78.
POSITION: Stock and/or October $60 calls to buy (ELN JL).

BBY (Best Buy--$64.53; -0.85; optionable (BBY): Retail
http://biz.yahoo.com/p/b/bby.html
STATUS: Broke out of its ascending wedge last week but is having some trouble, lingering back near the breakout point (and its 10 day MVA, at 64.87). Today it gapped down but managed a doji, closing just below the 10 day on increased, strong volume of 2.89 million (average 2.32 million). We will see if the doji can lead to a bounce back up and over the breakout high of 68.64. Huge money flow and excellent relative strength. Target: $70.
BUY POINT: Aggressive: Over 67 on continued strong volume. Stop: 62.31. New high: 68.78 on continued volume. Stop: 63.97.
POSITION: Stock and/or September $60 calls to buy (BBY IL).

SLVN (Sylvan Learning--$23.50; -0.80; optionable): Education services.
http://biz.yahoo.com/p/s/slvn.html
STATUS: Broke from a cup in late June, and after hitting a high of 25.58 the stock has pulled back to test the former highs in that cup pattern. It has shown a bit of volatility lately, making a strong move up Monday but dropping back just as strong the following day, and gapping down toward its recent lows today, although volume was much lower at 186,700 (average 372,600). It is still holding the recent lows and 18 day MVA (22.99), but we will need to see the selling stop here and take a run back up toward the breakout high. Target: 28.
BUY POINT: Breakout: A move over 25.58 on above average volume. Stop: 23.79. Aggressive: After showing that it can hold the 18 day, a move back over 24.30 on average or better volume. Stop: 22.60.
POSITION: Both buy points: Stock and/or November $22.50 calls to buy (NQV KX).

MOVING AVERAGE BOUNCES:

None this week.

WEDGES, PENNANTS, and FLYING PLATEAUS (AND FLAGS): These are some of our favorite patterns as the moves can be explosive. In this market, however, we need to see the move on the breakout on strong volume.

Ascending wedges:

BVN (Compania De Minas Buena--$18.92; +0.41; no options): Gold mining
http://biz.yahoo.com/p/b/bvn.html
STATUS: Moving in an ascending wedge for the past 8 weeks as it has moved off of its bottom, formed a cup with handle, and now is ready to break out of its wedge pattern. This is one of our favorite base-on-base patterns. Monday it broke almost broke out, but after a slight pullback the next session it gapped down to open today before pushing up beyond the breakout point. However, volume was well below the average at 99,200 (average 114,800). Looking for a stronger continuation of this move. Money flow is outstanding and relative strength has broken out ahead of this move. Target: 22.75.
BUY POINT: A move over 19.25 on volume of 175,000 or better. Stop: 17.90
POSITION: Stock; no option chain.

CRL (Charles River Labs--$31.20; +0.95; no options): Biotech
http://biz.yahoo.com/p/c/crl.html
STATUS: The stock has dropped back in its ascending wedge pattern, this time failing to make another higher low. However, it is holding strong on its 50 day MVA (30.17), moving up from that level today on lower volume (193,600; average 198,500), but unable to breach the 10 day (31.69) before falling slightly back at the close. Not looking nearly as promising now, but we are still looking for a break over 35 on above average rising volume, but it might take some time. Target: $42.
BUY POINT: Aggressive: A move over 34 on average or stronger volume. Stop: 31.62. Breakout: 35.13, on volume of 265,000 or better. Stop: 32.67.
POSITION: Stock.

SPF (Standard Pacific--$23.15; +0.23; optionable): Residential construction
http://biz.yahoo.com/p/s/spf.html
STATUS: After hitting an all-time high in February at 33, SPF split 'the hard way,' dropping to 16 before rebounding. It is working on a cup base, forming an ascending wedge over the past two months as it cleared its moving averages, and now showing us a promising consolidation pattern. The stock continues to gently pull back along its 10 & 18 day MVA's (23.07 and 22.74, respectively) on decreasing and sharply below average volume (74,100, average 307,600). Money flow remains excellent, and we are looking for a nice pop on the move higher as ascending wedges tend to show us sharp upward moves that fizzle. We will take our 20% and bank it if it starts to slow down on the move. Target: 29
BUY POINT: 24.20 on volume of 350,000 shares or better. Stop: 22.50
POSTION: Stock and/or September $20 calls to buy (SPF ID).

SLC (Sun Life--$23.66; 0.00; optionable (SLC): Insurance
http://biz.yahoo.com/p/s/slc.html
STATUS: Continuing its ascending wedge pattern (that formed after a cup with handle breakout) as it bounces up along its 10 day MVA (23.48) on below average volume (140,400; average is 182,800). We are still watching for greater volume on a breakout over the pattern high of 24.35. Relative strength has broken out. Initial target: $29-30.
BUY POINT: Breakout: 24.48, on volume in the range of 250,000. Stop: 22.77. A buy on breakout up to 25.70.
POSITION: Stock and/or August $20 calls to buy (SLC HD).

BASING/TRADING RANGES:

Continued:

ORI (Old Republic--$28.00; -0.13; optionable (ORI): Insurance
http://biz.yahoo.com/p/o/ori.html
STATUS: Still in the flat base pattern that has formed the floor of a 6-month base (prior high 32). The stock has dipped back toward the lows of the range in recent days, falling through its 50 day MVA (28.48). Today it gapped down but showed a doji after hitting 27.75 at its low, and if it can hold here it will continue its trend of making higher lows. Volume on the selling has not been strong, with today's volume slightly higher at 238,700 (average 356,600). We want to see a breakout over the pattern high at 29.90 (previous basing high 32). Still shows good money flow and buying. Target: 34 (carefully watching the 32 level for resistance).
BUY POINT: Breakout: 30, on minimum breakout volume of 481,000, or better. Stop: 27.93. Aggressive: Over the 18 day MVA (currently 28.59) with above average volume. Stop: 26.60.
POSITION: Both buy points: Stock and/or October $25 calls to buy (ORI JE; no open interest).

BZH (Beazer Homes--$64.26; -1.74; no options): Materials & Construction
http://biz.yahoo.com/p/b/bzh.html
STATUS: BZH could not manage a move over the high in its recent, weak breakout from its little double bottom with handle. It pulled back today on increased volume but still managed to hold its 10 day MVA to close (64.17). The handle from which it broke wedged up slightly, which is not the best shape for a handle (we like to see a slightly downward slope on lower volume). We will see if it can continue to hold this support and try a stronger move up, but it has not been able to muster much volume on recent attempts. Super money flow and good buying, with excellent relative strength. Target: $76-79.
BUY POINT: Breakout: 68.13, on increased volume (today 190,800; average 185,700).
POSITION: Stock.

SRZ (Sunrise Assisted Living--$27.15; -0.10; optionable): Long-term health care
http://biz.yahoo.com/p/s/srz.html
STATUS: SRZ is in a 7 month cup with handle base and appears to be forming the handle right now on extremely low volume (123,900; average is 227,000). Today it showed a second consecutive doji, continuing to hold over the support of its 10 day MVA (26.83). Relative strength has broken out, a solid sign, and the pattern looks good. Looking for the breakout over 28. Target: 34
BUY POINT: 28.02 on volume of 340,000. Stop: 26
POSITION: Stock and/or October 22.50 calls to buy (SRZ JX).

FNM (Fannie Mae--$83.85; -0.21; optionable): Mortgage Investment.
http://biz.yahoo.com/p/f/fnm.html
STATUS: The stock has formed a cup with handle since the beginning of the year, and is currently moving in the handle but struggling a bit. The stock dove back through its short-term MVA's Tuesday (10 and 18 day at 84.70 and 84.40, respectively), and today was only able to tap the 18 day at its high before retreating for a loose doji pattern. Volume remained below average on each move (down to 2.66 million today; average 3.15 million), and it is right at the previous low in the handle (50 day MVA at 82.51). Handle high is 87.87. The stock shows excellent relative strength. Target on breakout: 100.
BUY POINT: Aggressive: Over 86.29 on increased volume. Breakout: 88 on volume of 4.6 million.
POSITION: Aggressive: Stock and/or September $80 calls to buy (FNM IP). Breakout: September $85 calls to buy (FNM IQ). Stop: 81.84 (50 day MVA at 82.40).

CS (Cabletron Systems--$22.50; +0.59; optionable): Computer hardware.
http://biz.yahoo.com/p/c/cs.html
STATUS: Broke from a cup with handle in late May, but after pulling back to test its 50 day MVA (currently 19.12) the stock took off again to a high of 22.90. CS has since pulled back to its 18 day (20.82) and taken a solid bounce, and repeated that action the last two session but used the 10 day instead (21.52). Volume has been strong all the way through, today slightly down to 3.21 million (average 1.8 million). This is the level where it has struggled, so we are looking for a break over the recent high. Relative strength broke out, and money flow is strong. Target: 27.
BUY POINT: A move over 23, with continued strong volume. Stop: 21.39.
POSITION: Stock and/or October $20 calls to buy (CS JD).

A thinly traded stock in a good-looking sector:

CPJ (Chateau Communities--$30.89; -0.02; no options): REIT
http://biz.yahoo.com/p/c/cpj.html
STATUS: Remains in the 6-month flat base that formed after the stock broke out of a similar base last fall. It dropped back to the 50 day MVA (30.98) yesterday, but could be catching that level as support this time (would be another higher low if it does), as it showed a loose doji on volume that spiked way up to 97,800 (average 49,700). We will see if it can bounce, looking for a move over the recent highs. The April high is 32.18, but an aggressive position can be entered on a strong move over the recent high of 31.75. Target: $36.
BUY POINT: 31.88, on continued strong volume. Stop: 29.33 (just under the 200 day MVA, 29.75).
POSITION: Stock.

JKHY (Jack Henry--$30.00; +0.05; optionable (JKQ): Software
http://biz.yahoo.com/p/j/jkhy.html
STATUS: The stock formed an ascending wedge in the upper right side of its 6-month cup base, and has pulled back to test the break from that pattern. It was showing a handle-type consolidation on steadily decreasing volume with the 10 day MVA (30.14) as support, but Tuesday we saw a huge volume surge as the stock tries to hold on to support (18 day at 29.83). We will see if this volume surge portends a strong move back up toward the breakout high of 31.50 (former basing high at 33.13). The 50 day, which the stock has tested twice since mid-May, is below at 28.65. Target: $38-40, but we will watch for topping signs at 33-34 in keeping with the prior high and the trendline drawn from recent highs.
BUY POINT: Breakout: 31.63, on volume of 690,000 or better (today 837,300; average 463,700). Stop: 29.42 (just below the 18 day MVA). Aggressive: Over 30.50 on continued strong volume. Stop: 28.37.
POSITION: Both buy points: Stock and/or September $27.50 calls to buy (JKQ IY).

BVF (Biovail--$42.70; -0.16; optionable): Drug delivery.
http://biz.yahoo.com/p/b/bvf.html
STATUS: Remains in the handle to its 4-month cup base. After Tuesday's gap open and fall back to the 18 day MVA (42.82), today the stock continued down to nearly touch the 50 day (41.10) before buyers drove it back up to close on a doji with a long tail. Although we prefer to see higher volume on such a move (today was below average at 361,500, average is 570,600), today's doji may signal a positive change. We are looking for solid move back toward a breakout over the handle high of $45.10. Relative strength remains solid. Target: $50-52.
BUY POINT: Aggressive: Over 44 on average or better volume. Stop: 40.92. Breakout: 45.23, on volume of 880,000 or more. Stop: 41.61 (50 day MVA is 41.10).
POSITION: Both Buy Points: Stock and/or October $40 calls to buy (BVF JH).

LH (Laboratory Cp Am Hldgs--$78.57; -2.93; optionable (LH): Health services
http://biz.yahoo.com/p/l/lh.html
STATUS: Still remains in its handle to a 6-month cup base. Although LH continues to hold key support, it could not maintain yesterday's nice move, pulling back on lower volume (505,800, average is 477,800) to close just above the 10 day MVA (78.47). We are still looking for a strong breakout move, over the previous handle high of 82.63. Money flow and relative strength remain strong. Target on a breakout: $91-95.
BUY POINT: Aggressive: Over the recent highs at 81.75, with continued strong volume. Breakout: 82.63, on volume of 710,000 or more. Stop: 76.02.
POSITION: Both buy points: Stock and/or August $75 calls to buy (LH HO).

EQR (Equity Resident--$55.20; -0.30; optionable (EQR): REIT
http://biz.yahoo.com/p/e/eqr.html
STATUS: EQR is threatening to fall out of its pattern, as it has taken a rather severe drop over the last few sessions. Today it continued to fall, showing the expected test of the 50 day MVA, (54.82, and the handle low) before rising a bit to close down on slightly increased, but still below average volume (251,900, average 328,500). Thus far, EQR is holding support at the 50 day, and that is critical to preserving the pattern. The stock may simply be resting before beginning another upward move. We are looking for a strong move over the handle high of 57.50 before taking positions; but that may not happen in a single session.
BUY POINT: Breakout: 57.63, on volume of 492,000 or more. Stop: 53.60. Aggressive: A move over the 10 day MVA (56.04) on above average volume. Stop: 52.12.
POSITION: Breakout: Stock and/or October $55 calls to buy (EQR JK). Aggressive: Stock and/or October $50 calls to buy (EQR JJ).

CNA (Cna Financial--$38.70; -0.51; optionable (CNA): Insurance
http://biz.yahoo.com/p/c/cna.html
STATUS: Continuing in its lengthy consolidation, today opening at its 10 day MVA (39.17) and selling down through its 50 day MVA (38.56) before recovering slightly to close just above it. As a stock prepares to breakout we may see increased selling as we did today (178,300, average 144,700), shaking out the remaining "weak" shareholders. The 50 day and recent handle lows continue to act as support, and we are still looking for a breakout to take positions. Target: $44-46.
BUY POINT: Breakout: 40.37, on volume of 217,000 or better. Stop: 37.54. A buy on the breakout up to 42.39.
POSITION: Stock and/or August $35 calls to buy (CNA HG; low open interests).

Puts:

ADVS (Advent Software--$51.50; -1.64; optionable): Software
http://biz.yahoo.com/p/a/advs.html
STATUS: The meltdown continued today, as strong institutional selling and decreasing money flow accompanied a further sell down on above average volume (770,900, average: 658,200). The stock gapped up at the open, just below its 200 day MVA (53.22), but fell to 48.61 before recovering to close near the May low support of 51.50. We will see if the good news after hours affects the stock, but with the drop through the 200 day and subsequent failure to recover, we are watching to see if it falls to its next major support of 45, our next target for a put.
BUY POINT: On further selling below 51 (perhaps after another attempt to move toward the 200 day) on continued rising volume.
POSITION: August $65 puts to buy (UIV TM).

CHV (Chevron--$87.67; -1.73; optionable): Oil and gas
http://biz.yahoo.com/p/c/chv.html
STATUS: Once again, CHV continued down on slightly above average volume (2.46 million; average is 2.3 million). Today the stock hit a low of 87.06, below the 200 day MVA (87.47), but recovered to close. For existing positions we will watch for a possible bounce from this level as signal to exit, but the stock is weak, and we will also look for a strong breach of the 200 day for additional put positions. Target on continued weakness: 82-83. If it bounces, we will sell.
POSITIONS: On a breach of the 200 day on continued strong volume and a failed move back over that level, a strong move down.
BUY POINT: August $95 puts to buy (CHV TS).

IGT (International Game Technology--$55.82; -0.83; optionable):
http://biz.yahoo.com/p/i/igt.html
STATUS: Today, IGT continued to sell back on slightly decreasing, but still very strong volume of 1.30 million (average 800,000). It is weak, but it could try to rebound, but we would not expect it to get very far. On a move back down on continued strong volume, we will watch the May low of 53.19 to act as potential support, but we are focusing on the 200 day MVA at 49.47 as our target.
BUY POINT: After a brief bounce up to the 57 range, a drop back below 56 on continued strong volume.
POSITION: August $65 puts to buy (IGT TM).

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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