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Begin part 3 of 3
THE PLAYS
Monday night play results:
ABM: Gapped higher but volume backed off and it closed flat. This is where it makes its move.
BEV: Still holding the pattern, gapping up but fading.
BLL: Managed to rally with market on steady trade.
New plays for Wednesday:
Upside:
Play Date: 05/18/2004
EGLS (Electroglas--$4.72; -0.02; no options): Chip equipment
http://biz.yahoo.com/p/e/egls.html
STATUS: Double bottom. We will see if AMAT can generate any excitement in the chip equipment makers. EGLS is coming up toward the 'hump' in its 14 week base, etching out its right leg as it approaches 5. Volume kicked up the past week, rising to above average levels on up sessions. It is moving more or less laterally, maybe forming a handle to the base. Accumulation is a solid 4 to 2 (4 up price weeks on rising volume to 2 down price weeks on rising volume) with excellent money flow well ahead of price. Again, looking to see if AMAT has any positive effects.
Volume: 95.781K Avg Volume: 141.409K
BUY POINT: $5.05 Volume=212K Target=$6.08 Stop=$4.66
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/egls.html
Play Date: 05/18/2004
RHAT (Red Hat--$25.22; +0.26; optionable): Internet software and services
http://biz.yahoo.com/p/r/rhat.html
STATUS: Ascending triangle. RHAT broke out an 11 week cup base in late April, surging on strong trade. It moved to 24, then started a range between 24 to 26 the past 8 weeks, building 2 to 0 accumulation as it moves up the 18 day EMA (24.88), making higher and higher lows below a constant top near 26. Strong money flow is helping lead the way.
Volume: 3.529M Avg Volume: 4.986M
BUY POINT: $26.32 Volume=7M Target=$30.25 Stop=$24.68
POSITION: RCV IE - Sept. $25c (57 delta) &/or Stock
http://www.investmenthouse.com/cd/rhat.html
Play Date: 05/18/2004
SMRT (Stein Mart--$13.63; +0.24; no options): Discount apparel, etc.
http://biz.yahoo.com/p/s/smrt.html
STATUS: Double bottom w/handle. Broke from a 19 month cup with handle base in January and rallied well up to 14.52 before starting the current correction. It has formed a 7 week base over the 50 day EMA (12.89); that is a sign of very solid support for the stock as big money buys into it when it hits that level. Indeed, accumulation in the short base is a solid 2 to 0. It is easing back to form the handle over the 18 day EMA (13.48) on very low, below average volume. That shows few sellers as it tests back and shakes out the final sellers. Money flow continues to move higher ahead of the price as it fades back. Looks very good with excellent relative strength.
Volume: 132.868K Avg Volume: 224.772K
BUY POINT: $14.18 Volume=337K Target=$17 Stop=$13.32
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/smrt.html
SUBSCRIBER PORTFOLIO: These are stocks subscribers suggest by vote that we put in a portfolio to track and move into the stocks if they perform well. If you have any suggestions for additions or deletions, email us. We don't cover them all each report, just when something interesting is developing.
ALDN, CECO, COH, DNA, EBAY, GTRC, LPNT, TGT
LPNT: Very tight trading range the past three sessions as it holds over the 18 day EMA on low, below average volume. Excellent handle forming. Getting ready for the next big breakout.
TGT: Tanked Monday but a nice recovery on rising, above average volume Tuesday. Still has not retaken the 50 day. Needs to get over 44.
SUBSCRIBER WATCHLIST
We continually receive ideas for potential plays from subscribers. Many times they are already on our watchlists, other times not. We always take a look and sometimes find a gem or two, or more. We don't necessarily endorse these, but want to provide a forum for subscribers with ideas that may appeal to other subscribers. We may just put on the ticker or we might describe our thoughts as to why or why not we think it is a buy or sell. This is a way we can all learn a bit more and maybe find a few more candidates to make us some good money.
Upside:
The following was the upside stock from the weekend (left out the ticker).
VTA: Nice low volume flying plateau forming after a big, high volume breakout last week.
Downside:
FLO: Has rallied back up to test the 10 day EMA on low volume after a nasty high volume tank. Ready to roll back over.
Good Investing!
Jon L. Johnson and The Daily Staff
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 of 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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