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trade stock, stock recommendation
Begin part 3 of 3
THE PLAYS:
Wednesday play results:
ASKJ: Nice move on continued above average volume.
CRZO: Got wild on us, reaching way down but rallying back on volume. Still holding but don't like the wild action.
LPNT: Starting higher on some rising volume. Getting ready.
MXIM: Another nice, low volume test of the 50 and 200 day SMA.
New Plays:
Upside:
Play Date: 05/13/2004
NMSS (Natural Microsystems--$8.37; +0.08; optionable): Telecom processing systems
http://biz.yahoo.com/p/n/nmss.html
STATUS: Test breakout. NMSS shot out of a 12 week cup with handle base in mid-April on strong volume and rallied to just over 9. As the market started to sell NMSS eased back on lower and lower below average volume, coming back to test the 50 day EMA (7.77). A very orderly test while there was heavy market selling is a good indication that it will be ready to move higher when the pressure lets up. Solid 4 to 1 accumulation in the base (4 up price weeks on rising volume to 1 down price week on rising volume) shows money moved in during the base and set the foundation for a good run. Money flow remains strong even on the pullback. Volume started edging higher Thursday and we want to see a strong, above average volume surge as it moves through the buy point.
Volume: 350.396K Avg Volume: 415.045K
BUY POINT: $9.06 Volume=550K Target=$10.88 Stop=$8.32
POSITION: QNM IU - Sept. $7.50c (71 delta, low OI) &/or Stock
http://www.investmenthouse.com/ci/nmss.html
Play Date: 05/13/2004
WITS (Witness Systems--$13.87; +0.63; no options): Optimization software re customer data and workforce performance
http://biz.yahoo.com/p/w/wits.html
STATUS: Ascending triangle. A nice 10 week ascending triangle sporting excellent 4 to 0 accumulation and outstanding money flow. The pattern has formed making higher lows on the 50 day EMA (12.88) under a constant top at 14ish. That builds pressure from below as it weeds out the sellers. These breakouts can be explosive. Really like the pattern.
Volume: 285.999K Avg Volume: 379.227K
BUY POINT: $14.32 Volume=510K Target=$17.25 Stop=$13.48
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ci/wits.html
Downside: Despite the reversal, there are several downside plays in sectors that are in trouble.
Play Date: 05/13/2004
DHR (Danaher--$89.97; -1.45; optionable): General building materials
http://biz.yahoo.com/p/d/dhr.html
STATUS: Put. Crashed through the 50 day EMA (92.41) 5 sessions back on rising, above average volume. It continued lower to 88 on strong trade and then started a low volume rebound to test the breakdown. Got up to the 10 day EMA (91.59) and then rolled over Thursday as volume shot back above average. Looks ready to continue the move lower. May try to hold at 88, but we anticipate it will fall on through toward the 200 day SMA (85.56).
Volume: 1.273M Avg Volume: 834.5K
BUY POINT: $89.75 Volume=950K Target=$86.25 Stop=$91.65
POSITION: DHR RR - June $90p (-49 delta)
http://www.investmenthouse.com/ci/dhr.html
Play Date: 05/13/2004
MCO (Moodys Corp.--$63.27; -0.58; optionable): Business rating services
http://biz.yahoo.com/p/m/mco.html
STATUS: Put. MCO peaked in early April and has since been in a steady downtrend using the 10 day EMA (64.13) as resistance that stalls each move higher. It tanked last week and then made a low volume rebound this week, tapping the 10 day EMA on the Thursday high. It reversed from there and sold on sharply higher, above average volume, showing a tombstone doji on the candlestick pattern. The name says it all. Looking for the downside to resume.
Volume: 871.3K Avg Volume: 535.863K
BUY POINT: $63.15 Volume=804K Target=$60.42 Stop=$64.22
POSITION: MCO TM - Aug. $65p (-64 delta)
http://www.investmenthouse.com/ci/mco.html
Play Date: 05/13/2004
POG (Patina Oil & Gas--$26.40; -0.77; optionable): Oil and gas
http://biz.yahoo.com/p/p/pog.html
STATUS: Put. It is interesting to see the oil stocks under pressure even as oil prices reach higher. POG gapped below the 50 day EMA (27.11) last week on stronger volume, then mounted a lower volume rebound this week. It tried to break through the 50 day Thursday, but reversed as volume rallied aback above average. Looks ready to continue the drop.
Volume: 824.6K Avg Volume: 706.272K
BUY POINT: $26.28 Volume=800K Target=$24 Stop=$27.25
POSITION: POG UY - Sept. $27.50p (-45 delta)
http://www.investmenthouse.com/ci/pog.html
Good Investing!
Jon L. Johnson and your IH Alerts 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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