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us stock market, stock split
Begin part 2 of 3
What to do now.
Thus we continue to look for leadership caliber stocks to buy and at the same time cull out those that are unable to withstand the basing process. If a stock is holding support and showing overall good price/volume action, we are not dumping it. We are pruning those that break down and thus will be holding only the strongest stocks when this base is over. At the same time we add those stocks that are showing themselves to be leaders as they hold their support and even break higher ahead of the pack. Those leaders that are successfully testing their breakouts and are setting up the next buy points are really interesting at this juncture as they are proven winners. It is definitely a stock by stock market at this point with month moving around fairly rapidly again. It is good policy to take some gains when they are there and then let the remaining position ride if still positive. We can let that position work for us and ride through some of the bumps as long as the price/volume action holds and it is able to hold or quickly recover breaches of support.
Support and Resistance
NASDAQ: Closed at 1995.74
Resistance: The exponential 50 day MVA (2013). The simple 50 day MVA (2015) along with the 18 day MVA (2016). Breakout from the pattern is 2080. 2089 is the February closing high. 2112 is the early January high. 2154 is the January high.
Support: 1990 to 2000, the top of the late 2003 base. Some prices from the recent March consolidation attempt (1943). The 200 day MVA (1919). Mixed tops and bottoms at 1900.
S&P 500: Closed at 1134.61
Resistance: The simple 50 day MVA (1134) and the 10 day MVA (1133) have not been totally broken. The January high (1155). Next is 1159 (February highs) and 1160 to 1175 the highs in that double top that spanned late 2001, early 2002.
Support: The exponential 50 day MVA (1127), just over 1125, holding on the close Wednesday and Thursday. 1106 is a May 2002 top and represents some early 2001 lows. 1096 to 1100. 1075 to 1070 from the December consolidation.
Dow: Closed at 10,397.46
Resistance: The simple 50 day MVA (10,448). Price consolidation at 10,600 level. September/November up trendline (10,635). 10,747 is the February high.
Support: The exponential 50 day MVA (10,390) continues to try and hold. 10,000 to 9900-9850. 9859-9855 is the next real support.
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
4-19-04
Leading economic indicators, March (10:00): 0.3% expected, 0.0% February.
4-21-04
Fed Beige Book (2:00)
4-22-04
Initial jobless claims (8:30): 335K expected, 360K prior.
4-23-04
Durable goods orders, March (8:30): 0.7% expected, 2.5% February.
THE PLAYS:
Thursday night play results:
KMRT: Solid bounce off the 18 day MVA on strong trade.
SIRI: Still forming a nice, low volume handle.
VCLK: Not doing it.
WMS: Started the move but gave much of it back.
New Plays:
Upside:
Play Date: 04/17/2004
ANDW (Andrew Corp.--$20.20; +0.30; optionable): Telecom equipment
http://biz.yahoo.com/p/a/andw.html
STATUS: Breakout test. This is one of the leaders we have been talking about. It shot out of an 11 week flat base to start the month and has moved laterally during the recent selling, holding onto its gains as the market sold off. The 10 day MVA (19.67) has moved up to kiss it, and that is often the catalyst to send this type of breakout higher. Excellent 4 to 0 accumulation in the base (4 up price weeks on rising volume to 0 down price weeks on rising volume). Money flow is outstanding and turning up already ahead of the price. Excellent action and strength in the face of the market selling.
Volume: 3.812M Avg Volume: 2.966M
BUY POINT: $20.48 Volume=4M Target=$24.58 Stop=$19.05
POSITION: AQN JD - Oct. $20c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/andw.html
Play Date: 04/17/2004
BIIB (Biogen Idec--$59.46; +1.77; optionable): Biotechnology
http://biz.yahoo.com/p/b/biib.html
STATUS: Reverse head and shoulders. This new company has no combined split history, but both of the merged companies are former splitters though at higher levels. This is still a great pattern; a sweet 8 week base that formed after the big gap higher in mid-February on news its MS drug may be ready to market by mid-year. It has since worked laterally near the 18 day MVA (56.25) forming a nice accumulation pattern. Accumulation is solid, money flow is strong, and relative strength is already making the breakout ahead of the stock, a very solid indication of a solid pattern. Volume started to rise toward the end of the week as BIIB started toward the breakout, and we are looking for it to continue as the stock makes the actual breakout. A definite leader, holding up extremely well in the selling and forming this nice pattern.
Volume: 4.825M Avg Volume: 5.243M
BUY POINT: $59.88 Volume=7.5M Target=$71.88 Stop=$58.94
POSITION: IHD GL - July $60c (51 delta) &/or Stock
http://www.investmenthouse.com/ci/biib.html
Play Date: 04/17/2004
IRGI (Inveresk Research Group--$28.65; +1.00; no options): Medical labs
http://biz.yahoo.com/p/i/irgi.html
STATUS: Reverse head and shoulders. IRGI has formed the current 8 week base over the 50 day MVA (27.14), a good sign of support for the stock as big money held it up during the test. Solid 3 to 1 accumulation during the base shows buyers moving in even as the stock based. Solid money flow and relative strength ready to make a breakout with the stock, another confirmation of the move when it comes. A breakout puts IRGI at an all time high (it was a new issue in late 2002), a position we like because there is no overhead supply to sell the stock off.
Volume: 192.743K Avg Volume: 216.858K
BUY POINT: $28.94 Volume=325K Target=$34.75 Stop=$27.68
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ci/irgi.html
Play Date: 04/17/2004
OSIS (OSI Systems--$24.09; +1.03; optionable): Chip equipment
http://biz.yahoo.com/p/o/osis.html
STATUS: Breakout test. The semiconductors may be in the toilet overall, but OSIS is a market leader, having surged out of a 10.5 week base to start the month. It has come back to the 10 day MVA (22.91) as it tests the breakout, and that keeps it over the high in the pattern, maintaining the breakout. Volume eased back as the stock made the test, just what you want to see as that indicates few sellers, just some profit takers. Friday volume shot back up as the stock jumped off the 10 day MVA. Strong money flow and a relative strength breakout; it is very strong and again, a market leader.
Volume: 587.122K Avg Volume: 201.636K
BUY POINT: $24.68 Volume=312K Target=$29.62 Stop=$22.88
POSITION: UOJ GE - July $25c (45 delta) &/or Stock
http://www.investmenthouse.com/ci/osis.html
Play Date: 04/17/2004
SIMG (Silicon Image--$12.86; -0.18; optionable): Semiconductor memory chips
http://biz.yahoo.com/p/s/simg.html
STATUS: Breakout test. Another strong stock that has made the volume breakout and is now testing that move. SIMG gapped up and out of a 10 week base in early April and rallied to 14. It is making a low volume slide back to the 10 day, showing a nice hammer doji with tail at that level Friday. That often indicates a stock is finished with testing and is ready to continue the breakout.
Volume: 943.32K Avg Volume: 935.907K
BUY POINT: $13.12 Volume=1.4M Target=$15.78 Stop=$12.32
POSITION: QSI IV - Sept. $12.50c (63 delta) &/or Stock
http://www.investmenthouse.com/ci/simg.html
Good movers Friday: KFX; MXT; PHMD; R; TASR; TSCO; VION
End part 2 of 3
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us stock market
stock split
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