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Begin part 3 of 3
THE PLAYS
Good movers Friday: With that surge there were many.
Best Plays:
1) AVO: A nice winner for us earlier in the year, it has set up a very nice base for the next move.
2) EMR: The stock has a lot of pop and it is ready for a key break higher.
3) KOOL: Ready to break higher. A very good risk/reward position.
4) FLS: Volume is pushing a breakout.
5) OPTV: Looks ready after this test.
NEW PLAYS:
Upside:
Play Date: 10/02/2004
AVO (Advanced Medical Optics--$39.39; -0.18; optionable): Medical instruments
http://biz.yahoo.com/p/a/avo.html
STATUS: Cup w/handle. A very nice, orderly 14 week base has formed at the 50 day EMA (38.03), consolidating the strong breakout and rally from April through June. Volume rallied Thursday and Friday as it did for most stocks, but it pushed AVO to the top of its short handle. Accumulation is a strong 5 to 2 (5 up price weeks on rising volume to 2 down price weeks on rising volume), showing net buyers and setting up the breakout move. Money flow is strong as well, and we are looking for AVO to follow it higher with another good volume jump.
Volume: 624.2K Avg Volume: 481.268K
BUY POINT: $40.12 Volume=722K Target=$47.75 Stop=$38.98
POSITION: AVO AH - Jan. $40c (50 delta) &/or Stock
http://www.investmenthouse.com/ct/avo.html
Play Date: 10/02/2004
EMR (Emerson Electric--$63.90; +2.01; optionable): Electronic equipment
http://biz.yahoo.com/p/e/emr.html
STATUS: Cup. EMR shot off of the 50 day EMA (62.02) Friday on a second day of strong, above average volume. The stock is following some surging money flow, ready for the breakout from its 8.5 month base. Accumulation is positive at 8 to 6, showing net buyers, and that sets the stage for a strong breakout and run higher. Excellent base and a market leader ready to make a breakout move.
Volume: 1.726M Avg Volume: 1.247M
BUY POINT: $64.34 Volume=1.9M Target=$74 Stop=$63.15
POSITION: EMR LM - Dec. $65c (40 delta) &/or Stock
http://www.investmenthouse.com/ct/emr.html
Play Date: 10/02/2004
KOOL (Thermogenesis--$5.00; +0.20; no options): Scientific & technical instruments
http://biz.yahoo.com/p/k/kool.html
After Hours: $5.01
STATUS: Cup. You could also view this as a broad double bottom, but those patterns work best when they are sharper, i.e. up and down hard and fast. In any event, KOOL just broke over the 200 day SMA (4.56) after a two week lateral move just below that level. Volume was surging Friday as it rallied off that level. Excellent 8 to 3 accumulation in the 8.5 month base shows net buyers in the base, setting up the foundation for a good move up to form the rest of the right side of the base. Money flow is super, leading well out in front of the stock. Looking to initiate positions on a further volume move and then again on the nest test. Looking nice.
Volume: 352.906K Avg Volume: 115.142K
BUY POINT: $5.11 Volume=200K Target=$6.49 Stop=$4.89
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/kool.html
Play Date: 10/02/2004
SYNA (Synaptics--$21.66; +1.50; optionable): PC IT services
http://biz.yahoo.com/p/s/syna.html
STATUS: Double bottom with handle breakout. Volume surged Friday as SYNA started the breakout move from its 8.5 month base. Very strong 14 to 4 accumulation in the base shows a lot of buying. That sets the foundation for the breakout when more want the stock but those that bought during the base don't want to sell. Money flow is strong and matches the solid accumulation. Looking to initiate positions on a continued move from here and then will add on a test of the breakout move.
Volume: 1.142M Avg Volume: 468.265K
BUY POINT: $21.85 Volume=702K Target=$26 Stop=$20.97
POSITION: QYG CD - Mar. $20c (67 delta) &/or Stock
http://www.investmenthouse.com/ct/syna.html
Downside:
Play Date: 10/02/2004
CX (Cemex SA--$28.55; +0.41; optionable): Cement
http://biz.yahoo.com/p/c/cx.html
STATUS: Put. Not all building materials stocks are moving higher. CX thudded lower Monday, crashing through the 200 day SMA (28.58) on tremendous volume. It has made a reflex bounce, but on lower and lower volume. Heavy distribution and tanking money flow underscore the weakness. Looking for it to roll over here at the 200 day SMA and continue the selling for a 41%ish gain.
Volume: 1.341M Avg Volume: 920.408K
BUY POINT: $28.41 Volume=950K Target=$27.15 Stop=$28.67
POSITION: CX WF - Nov. $30p (-70 delta)
http://www.investmenthouse.com/ct/cx.html
CONTINUING PLAYS:
New buy points on current plays:
Play Date: 09/21/2004
KMRT (Kmart Holding--$88.06; +0.59; optionable): Discount variety stores
http://biz.yahoo.com/p/k/kmrt.html
After Hours: $87.80
STATUS: Breakout test. Toying with us at the breakout point, but not showing us the volume it needs to make the breakout move. Friday KMRT showed a tight doji on low volume. Excellent 6 to 1 accumulation has set a good foundation. Now we just wait for the breakout move.
Volume: 1.141M Avg Volume: 2.726M
BUY POINT: New: 88.45 (orig. $80.22) Volume=3.6M Target=$100 Stop=$85.38
POSITION: KTQ LQ - Dec. $85c (53 delta)
http://www.investmenthouse.com/ct/kmrt.html
Continuing not yet entered:
Play Date: 09/25/2004
ECL (Ecolab--$31.75; +0.31; optionable): Cleaning products
http://biz.yahoo.com/p/e/ecl.html
STATUS: Cup w/handle. Volume continues to improve as ECL knocks on the breakout door to its 15 week base. The base formed more or less at the 50 day EMA (30.68), showing solid institutional support. Solid 4 to 2 accumulation and strong money flow are setting up the breakout move. This active volume has us ready to move in on the breakout move that sticks.
Volume: 857.3K Avg Volume: 659.264K
BUY POINT: New: $31.88 (orig. $31.68) Volume=952K Target=$36.55 Stop=$30.55
POSITION: ECL AF - Jan. $30c (78 delta) &/or Stock
http://www.investmenthouse.com/ct/ecl.html
Play Date: 09/16/2004
FLS (Flowserve--$24.50; +0.32; optionable): Precision engineered flow control equipment
http://biz.yahoo.com/p/f/fls.html
STATUS: Cup w/handle. Volume jumped again Friday as FLS once more banged at the breakout door. It closed above our buy point, but it was not forceful at that level. Looking for another good surge on continued solid volume (though not huge volume as it ahs shown solid trade to end last week). Very nice 12 week base with strong 4 to 1 accumulation and money flow that is surging higher ahead of price. Ready for it to follow that money flow and deliver the definitive breakout.
Volume: 228.4K Avg Volume: 284.425K
BUY POINT: $24.44 Volume=415K Target=$28.48 Stop=$23.62
POSITION: FLS BE - Feb. $25c (45 delta) &/or Stock
http://www.investmenthouse.com/ct/fls.html
Play Date: 09/29/2004
JUPM (Jupitermedia--$17.31; -0.49; optionable): Online information, images, research and events for IT
http://biz.yahoo.com/p/j/jupm.html
After Hours: $17.35
STATUS: Breakout. Gapped higher Friday as a follow up to the Thursday gap. Volume was lower, however, and JUPM could not hold the move, not even Thursday's gap. It may need to test back toward the 10 day EMA (16.67) to once again set up the next break higher. That will be a quick test to the breakout from its 6 week ascending triangle that followed on the heels of the breakout from a 19 week ascending base. The last breakout was on extremely strong volume, and volume of late is trying to match that level. After a quick test, looking for a rebound once more on strong trade.
Volume: 734.859K Avg Volume: 545.881K
BUY POINT: $17.57 Volume=550K Target=$21 Stop=$16.88
POSITION: EUU BW - Feb. $17.50c (56 delta) &/or Stock
http://www.investmenthouse.com/ct/jupm.html
Play Date: 09/30/2004
NSS (NS Group--$18.73; +0.23; no options): Steel and iron
http://biz.yahoo.com/p/n/nss.html
STATUS: Cup with handle. A short 9 week base that formed at the 50 day EMA (16.69) and broke out early last week. It rallied toward the end of the week, but volume trailed off sharply, coming in well below average. Still very solid and just need to see volume pick up once more as it continues the move. Solid 4 to 2 accumulation in the pattern and surging money flow is leading the way higher. Metals are being rediscovered, and NSS is ready to make the move.
Volume: 123.1K Avg Volume: 192.926K
BUY POINT: New: $18.88 (orig. $18.72) Volume=287K Target=$22.55 Stop=$17.54
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/nss.html
Play Date: 09/27/2004
OPTV (Opentv--$3.16; +0.11; no options): Multimedia/graphics software
http://biz.yahoo.com/p/o/optv.html
After Hours: $3.16
STATUS: Cup. Still working in its 12 month base, working laterally over the 10 day EMA (3.04) after powering through the 200 day SMA (2.83) on very strong trade. Volume was up to average on Friday as OPTV moved off of the 10 day. Tremendous money flow is leading higher. Continuing to be patient and letting it show us the breakout.
Volume: 378.89K Avg Volume: 448.583K
BUY POINT: New: $3.18 (orig. $3.15) Volume=525K Target=$4.25 Stop=$2.93
POSITION: - Stock
http://www.investmenthouse.com/ct/optv.html
Downside:
Play Date: 09/30/2004
CGNX (Cognex--$27.32; +1.12; optionable): Scientific & technical instruments
http://biz.yahoo.com/p/c/cgnx.html
STATUS: Put. CGNX has continued its low volume rebound, rallying back up with the market Thursday and Friday. It made it to the 50 day SMA (28.02) Friday, filling the gap lower from the prior week and just about taking back all of the selloff. This is where it will fail if it is going to continue the trend lower that started after it peaked in Late June. Looking for a roll back over here for a move back toward the September low and a 50%ish gain.
Volume: 505.254K Avg Volume: 595.935K
BUY POINT: New: $26.65 (orig. $25.94) Volume=750K Target=$23.88 Stop=$26.32
POSITION: QCG WF - Nov. $25p (-30 delta)
http://www.investmenthouse.com/ct/cgnx.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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