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Begin part 3 of 3
THE PLAYS
Good movers Wednesday: ABMD RHI
Best Plays:
1) MACE: Lots of momentum as it rebounds from the test.
2) MCHP: Lots of volume as it jumps off the 50 day EMA.
3) PLMO: Another momentum play, jumping off the test on strong volume.
4) ALOG: Looks great, just a matter of when it goes.
5) KOSN: Volume is jumping as it shows a doji over the 10 day EMA.
6) LEXG: Still a very nice base.
7) MIPS: Volume is moving higher as it tries the breakout.
8) RHI: Starting back up off the 18 day EMA test.
9) UAG: Very nice base.
NEW PLAYS:
Downside:
Play Date: 05/05/2004
$OEX (S&P 100 options--$547.19; +0.04; optionable)
http://biz.yahoo.com/p/$/$oex.html
STATUS: Put. Stalling at the 18 day EMA (549.86) with a doji Wednesday as volume died off. The low volume bounce to resistance are classic signs of a waning relief bounce. Looking for a roll down for a quick test of the 200 day SMA (533.23). This one is a more aggressive play given the jobs report Friday, but we want to be ready. Indeed, unless things are very negative Thursday we will hold off to see the reaction to the jobs report, be patient, and see if it gives us an entry point.
Volume: 1.469M Avg Volume: 1.5M
BUY POINT: $545.88 Volume=1.8M Target=$535 Stop=$549.06
POSITION: OEB RI - June $545p (-41 delta)
http://www.investmenthouse.com/ct/$oex.html
Play Date: 05/05/2004
$SOX (Philly Semiconductor Index--$452.25; +3.94; optionable)
http://biz.yahoo.com/p/$/$sox.html
STATUS: Put. This low volume bounce in the indexes has set them up for further selling if the jobs report does not evoke strong buying. We are going to be ready for the downside contingency, and the SOX can dump in a hurry. It is coming back up to test the break below the March low (453.23). We anticipate it will tap at the 10 day EMA (458.86) and fail. Given the jobs report Friday we will be cautious about jumping into this one unless the market is very negative Thursday. Then if the jobs report hurts stocks we will be ready to find an opening for this play. A failed test of the 10 day EMA would be good.
BUY POINT: From Wednesday close: $448.12. 10 day EMA test at 459: 454.95 on the way back down. Target=$427 Stop=$452.25
POSITION: SXX RJ - June $450p (-45 delta)
http://www.investmenthouse.com/ct/$sox.html
Upside:
Play Date: 05/05/2004
MACE (Mace Security Intl.--$5.92; +2.64; optionable): Personal defense products
http://biz.yahoo.com/p/m/mace.html
STATUS: Test 50 day EMA. MACE reported strong earnings Wednesday and exploded higher on big volume. This stock was virtually unknown beginning early April when it leapt higher. It has come back to test the move on lower volume, holding near the 50 day (3.48). This is a momentum play with room upside to make us a nice return and then move on. Super money flow. If it continues the move it can make our target at 7.32 easily and we would let it run to 8 if the move was really surging once more.
Volume: 22.082M Avg Volume: 2.651M
BUY POINT: $6.04 Volume=4M Target=$7.32 Stop=$5.62
POSITION: QXA IA - Sept. $5c (74 delta) &/or Stock
http://www.investmenthouse.com/ct/mace.html
Play Date: 05/05/2004
MCHP (Microchip--$30.30; +1.35; optionable): Semiconductors
http://biz.yahoo.com/p/m/mchp.html
STATUS: 50 day EMA test. MCHP exploded higher 9 sessions back, gapping over the 200 day SMA (29.05) and surging to 33. it ahs come back to test the move in the market selling, pulling back on lower volume. It held the simple 50 day Wednesday and then jumped Tuesday and Wednesday on excellent trade. We are looking at this as a momentum bounce play to capture the upside back to the January high near 34. Looking at options to give us the best leverage on this momentum run.
Volume: 4.837M Avg Volume: 2.623M
BUY POINT: $30.62 Volume=4M Target=$34 Stop=$28.48
POSITION: QMT GF - July $30c (56 delta)
http://www.investmenthouse.com/ct/mchp.html
Play Date: 05/05/2004
PLMO (Palmone--$18.12; +1.94; optionable): Wholesale computers
http://biz.yahoo.com/p/p/plmo.html
STATUS: Test Breakout. PLMO is getting some help from the Dell upgrade, but it has more behind it than that. The stock gapped higher from 14 in mid-March and rallied to 24; big move on some big volume. It came back to test that move, coming all the way back to 16 early this week on very low, below average volume. It held and then started back up Wednesday on strong, above average volume. Super accumulation in the 5.5 month cup base at 8 to 3 (8 up price weeks on rising volume to 3 down price weeks on rising volume) has set up the breakout and run. Now it looks ready to hold that breakout and resume the move, following a huge surge in money flow.
Volume: 3.196M Avg Volume: 2.43M
BUY POINT: $18.38 Volume=3.5M Target=$22 Stop=$17.09
POSITION: UPY HW - Aug. $17.50c (61 delta) &/or Stock
http://www.investmenthouse.com/ct/plmo.html
CONTINUING PLAYS:
Play Date: 04/29/2004
ALOG (Analogic Corp.--$48.10; +0.22; no options): Scientific & technical instruments
http://biz.yahoo.com/p/a/alog.html
STATUS: Cup w/handle. Still forming the handle on low volume, working laterally and slightly lower the mast month near the 18 day EMA (48.11), trying to put the finishing touches on a nice 8 month base. Surging money flow keeps us ready for the breakout move, but we want to see the volume jump as it clears the buy point. Nice looking pattern.
Volume: 47.145K Avg Volume: 105.636K
BUY POINT: $50.28 Volume=159K Target=$57.85 Stop=$48.05
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/alog.html
Play Date: 04/19/2004
ATRX (Atrix Labs--$31.97; +0.9; optionable): Drug delivery systems
http://biz.yahoo.com/p/a/atrx.html
STATUS: Breakout test. Moving up off the 18 day EMA (30.56) test on rising volume. A nice low volume pullback to test near support and the breakout. Still looks solid and a buy on a further volume move.
Volume: 267.306K Avg Volume: 196.363K
BUY POINT: New: $32.18 (orig. $32) Volume=300K Target=$38.32 Stop=$30.05
POSITION: OQF HF - Aug. $30c (61 delta) &/or Stock
http://www.investmenthouse.com/ct/atrx.html
Play Date: 05/03/2004
KOSN (Kosan Biosciences--$14.09; +0.01; no options): Biotechnology
http://biz.yahoo.com/p/k/kosn.html
STATUS: Cup w/handle. Still moving laterally over the 18 day EMA (13.61), forming the handle to its 8 week base. Nice accumulation at 3 to 1 (3 up price weeks on rising volume to 1 down price week on rising volume). A very tight doji Wednesday as volume spiked higher. That often indicates a move is imminent. Strong money flow and relative strength ready for the next breakout move, a good confirmation of any breakout.
Volume: 219.572K Avg Volume: 102.681K
BUY POINT: $14.82 Volume=154K Target=$17.72 Stop=$13.78
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/kosn.html
Play Date: 05/03/2004
LEXG (Lexicon Genetics--$7.25; -0.01; no options): Biopharma research for disease control
http://biz.yahoo.com/p/l/lexg.html
STATUS: Cup. Another doji over the 10 day EMA (7.13) on very low volume as it continues forming the handle to its 15 week base. Money flow continues to move higher ahead of price even as it works laterally, a good indication of a move higher to come.
Volume: 140.618K Avg Volume: 235.909K
BUY POINT: $7.62 Volume=369K Target=$9.15 Stop=$7.09
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/lexg.html
Play Date: 05/03/2004
MDT (Medtronic--$51.17; +0.77; optionable): Medical appliances
http://biz.yahoo.com/p/m/mdt.html
STATUS: Double bottom w/handle. Straining to make the breakout from its 12 week base, holding the 18 day EMA (50.18) on the handle lows and rebounding Monday and Wednesday. Strong 4 to 1 accumulation in the pattern has set the stage for the breakout as big money used the pullback to quietly enter the stock. Just need to see volume spike as it breaks higher.
Volume: 3.639M Avg Volume: 4.882M
BUY POINT: $51.78 Volume=7.5M Target=$59 Stop=$49.92
POSITION: MDT HJ - Aug. $50c (66 delta) &/or Stock
http://www.investmenthouse.com/ct/mdt.html
Play Date: 04/21/2004
MIPS (Mips Technologies--$6.85; +0.02; no options): Semiconductor memory chips
http://biz.yahoo.com/p/m/mips.html
STATUS: Cup w/handle. Rallied higher Wednesday on lower though solid trade but then gave the move back. Still working on a nice handle to its 15 week base. Surging money flow, and we are just waiting for it to follow the money.
Volume: 473.335K Avg Volume: 255.09K
BUY POINT: New: 6.96 (orig. $6.82) Volume=339K Target=$8.22 Stop=$6.34
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/mips.html
Play Date: 03/31/2004
RHI (Robert Half Intl.--$28.02; +0.66; optionable): Staffing and outsourcing
http://biz.yahoo.com/p/r/rhi.html
STATUS: Breakout test. Moving up off the test of the 18 day EMA (26.76), starting the jump back up from the test that filled the gap higher 2 weeks back. It has now filled and looks solid for the rebound, particularly with the huge money flow running higher ahead of the stock.
Volume: 1.035M Avg Volume: 898.045K
BUY POINT: New: $28.22 (orig. $25.18) Volume=1.1M Target=$28.85 Stop=$27.88
POSITION: RHI IE - Sept. $25c (75 delta) &/or Stock
http://www.investmenthouse.com/ct/rhi.html
Play Date: 05/01/2004
SLXP (Salix Pharmaceuticals--$31.99; +0.78; optionable): Drug related products
http://biz.yahoo.com/p/s/slxp.html
STATUS: Breakout test. Up off the 18 day EMA (30.88) Wednesday but volume was not there. SLXP broke from an 8 week pattern in late March. It has formed the current flying plateau and is holding up after it was caught up in the selling last week. Excellent 6 to 1 accumulation in the base. Just need to see some more volume as the stock following the strong money flow.
Volume: 152.677K Avg Volume: 208.181K
BUY POINT: $32.06 Volume=350K Target=$37.88 Stop=$30.48
POSITION: PQN GF - July $30c (61 delta) &/or Stock
http://www.investmenthouse.com/ct/slxp.html
Play Date: 05/01/2004
UAG (United Auto Group--$30.78; 0; no options): Automotive sales franchises
http://biz.yahoo.com/p/u/uag.html
STATUS: Cup w/handle. Another doji on low volume as UAG continues forming the nice, tight handle to its 4 month base sporting strong 8 to 1 accumulation. Excellent money flow moving up ahead of the stock. Looks ready to make the breakout.
Volume: 128.1K Avg Volume: 163.318K
BUY POINT: $31.55 Volume=250K Target=$36.45 Stop=$29.34
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/uag.html
Downside:
Play Date: 05/03/2004
ENR (Energrizer Holdings--$44.05; -0.37; optionable): Batteries
http://biz.yahoo.com/p/e/enr.html
STATUS: Put. Stalling below the 50 day EMA (44.97) after a lower and lower volume rebound from the massive break through the 50 day 6 sessions back. It has set up beautifully, and now we wait for the turn back down on continuing strong volume.
Volume: 404.8K Avg Volume: 343.863K
BUY POINT: New: $43.88 (orig. $44.48) Volume=500K Target=$42 Stop=$45.25
POSITION: ENR RI - June $45p (-64 delta)
http://www.investmenthouse.com/ct/enr.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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