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us stock market, stock recommendation
Begin part 3 of 3
THE PLAYS
Good movers Friday: ACDO; CGNX; UVN
Best Plays:
1) CAND: Nice test of a strong move.
2) VNT: Nice breakout test.
3) VRNT: Another leader giving a nice test of the breakout.
4) CHT: Tried the breakout but backed off in the market selling. Still in the nice pattern.
5) NXTP: A really nice base has formed.
6) SGMS: Knocking at the breakout.
NEW PLAYS:
Upside:
Play Date: 10/09/2004
CAND (Candies, Inc.--$4.12; -0.01; no options): Footwear
http://biz.yahoo.com/p/c/cand.html
STATUS: Breakout test. Taking another run at CAND; made us some good money earlier and we sold out too early. Now it is giving its first real entry point after the breakout. CAND exploded out of a flat base in early September and surged to 4.95 on the initial run. It is currently making its first test, easing back to the 18 day EMA (4.04) on mostly lower volume. Strong money flow and accumulation continues even as the stock makes this test. The first breakout test is one of our favorite entry points because it shows us that investors still want to move into the stock after the breakout. That typically means a lot more upside ahead.
Volume: 73.34K Avg Volume: 181.727K
BUY POINT: $4.28 Volume=275K Target=$5.25 Stop=$4.02
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/cand.html
Play Date: 10/09/2004
SWC (Stilwater Mining--$15.54; -0.03; optionable): Industrial metals and minerals
http://biz.yahoo.com/p/s/swc.html
After Hours: $15.55
STATUS: Flat base. Volume has come to life the past two weeks as SWC prepares for the breakout from its 26 week base. It has made three higher lows of late, one in August, one in September, and one just at the start of this month. Accumulation in the base is excellent at 7 to 2 (7 up price weeks on rising volume to 2 down price weeks on rising volume), setting the foundation for the breakout as the accumulation shows the bigger investors acquiring shares during the base. Money flow is starting to rise as it nears the breakout. Strong volume spikes to end last week tell us to get ready for a breakout attempt.
Volume: 1.129M Avg Volume: 381.27K
BUY POINT: $16.38 Volume=750K Target=$19.88 Stop=$15.78
POSITION: SWC AC - Jan. $15c (62 delta) &/or Stock
http://www.investmenthouse.com/ct/swc.html
Play Date: 10/09/2004
VNT (Compania Anomina Nac Telecom--$23.15; -0.1; optionable): Venezuelan telecom
http://biz.yahoo.com/p/v/vnt.html
STATUS: Breakout test. VNT broke out from a 24 week ascending triangle in late August, surging just over 24 on the breakout move. Volume was solid on the break higher, and now VNT is easing back toward the 10 day EMA (22.75) to test the breakout move. It is showing leadership attributes, i.e. just a pullback to test the breakout as the rest of the market sold harder. That first breakout test is one of our favorite entry points because when the stock holds and starts back up it shows the buyers are moving back in for more, still wanting the stock at this higher price. Solid 6 to 4 accumulation in the pattern shows net buyers and set up the breakout move. May come back to fully test the 10 day before it is ready to resume the move, but we want to be ready as it turns back up on volume.
Volume: 69.9K Avg Volume: 198.545K
BUY POINT: $23.41 Volume=298K Target=$27 Stop=$22.58
POSITION: VNT AX - Jan. $22.50c (63 delta) &/or Stock
http://www.investmenthouse.com/ct/vnt.html
Play Date: 10/09/2004
WSTM (Workstream--$3.30; -0.02; no options): Staffing and outsourcing services
http://biz.yahoo.com/p/w/wstm.html
After Hours: $3.21
STATUS: Breakout test. Volume surged to start the month as WSTM broke out from a 22 week cup with handle base sporting excellent 6 to 2 accumulation. It fell back last week on lower volume, testing the move with a tap down below the 18 day EMA (3.12) intraday Friday. It recovered on rising, above average volume as the buyers rushed back in. Looks as if that may have been the final test in the pullback. Money flow continues to rise even as the stock makes this test. Want to see strong volume continue as the stock moves back up through the buy point.
Volume: 304.97K Avg Volume: 167.097K
BUY POINT: $3.47 Volume=251K Target=$4.19 Stop=$3.34
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/wstm.html
New buy point for a current position:
Play Date: 10/09/2004
VRNT (Verint Systems--$36.69; -0.34; optionable): Business software services
http://biz.yahoo.com/p/v/vrnt.html
After Hours: $36.70
STATUS: Breakout test. A steady market leader and a solid winner for us, VRNT is making its second test of the early September breakout from a 9 week double bottom with handle base. Strong stocks tend to make 4 to 5 such bounces up the 10 or 18 day EMA after the breakout. That leaves plenty of upside for VRNT. Money flow remains strong even on this test. Friday it showed a nice tight hammer doji at the 10 day EMA, often an indication that a pullback has run its course.
Volume: 54.272K Avg Volume: 109.018K
BUY POINT: $37.21 Volume=135K Target=$42.48 Stop=$36.38
POSITION: JOQ BG - Feb. $35c (67 delta) &/or Stock
http://www.investmenthouse.com/ct/vrnt.html
CONTINUING PLAYS: Many are really setting up nicely.
Upside:
Play Date: 10/07/2004
BABY (Natus Medical--$7; +0.01; no options): Medical appliances
http://biz.yahoo.com/p/b/baby.html
STATUS: Breakout test. Continues its lateral move over the 10 day EMA (6.86), testing the breakout and holding its ground on low volume. BABY came to life in May, rallying to 6.75 where it started the current 12 week cup with handle base. It broke out of this base in late September and has moved laterally, holding its gains as it sets up for the next leg of the breakout run. Excellent 5 to 0 accumulation in the base shows all buyers, and money flow is strong. Just about ready to complete the consolidation at the 10 day EMA. Looking for it to bolt higher on once again strong volume.
Volume: 120.481K Avg Volume: 117.943K
BUY POINT: $7.22 Volume=450K Target=$8.85 Stop=$6.79
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/baby.html
Play Date: 10/07/2004
CHT (Chunghwa Telecom--$18.25; -0.25; optionable): Chinese wireless telecom
http://biz.yahoo.com/p/c/cht.html
STATUS: Double bottom. Gapped higher Friday on continued solid volume, but could not hold the move as the market sold off. Volume has suddenly jumped in the stock, indicating it is ready to make a stronger upside move. A solid 25 week double bottom base with strong 7 to 4 accumulation, showing net buyers during the base. Relative strength broke out on the move, a good corroboration of the breakout. Looking to initiate a partial position on a further move from here and if it comes back to test, when it rebounds from that test.
Volume: 282K Avg Volume: 205.022K
BUY POINT: $18.62 Volume=306K Target=$22 Stop=$17.55
POSITION: CHT CW - Mar. $17.50c (76 delta) &/or Stock
http://www.investmenthouse.com/ct/cht.html
Play Date: 10/02/2004
EMR (Emerson Electric--$62.94; -0.17; optionable): Industrial electrical equipment
http://biz.yahoo.com/p/e/emr.html
STATUS: Cup. EMR sold back modestly last week as the market did the same, holding at the 18 day EMA (62.81) on the Friday close after tapping the 50 day EMA (62.25) on the session low. Nice tight doji Friday as volume jumped back up toward average. Held its ground and looks to be ready to make the breakout move from its 9 month base. Money flow continues to move higher ahead of the price. After this higher low we anticipate EMR will follow the money.
Volume: 1.056M Avg Volume: 1.227M
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--$4.93; -0.09; no options): Scientific and technical instruments
http://biz.yahoo.com/p/k/kool.html
STATUS: Cup. Forming a small handle to its 9 month base, easing back to end the week at the 10 day EMA (4.89) on lower, below average volume. It is toying with the breakout point, but we need to see that volume spike as it moves through the buy point. Excellent money flow is pointing the way.
Volume: 97.295K Avg Volume: 112.045K
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: 10/05/2004
NXTP (Nextel Partners--$16.65; +0.24; optionable): Telecom wireless
http://biz.yahoo.com/p/n/nxtp.html
After Hours: $16.60
STATUS: Cup w/handle. One of the nicer patterns, NXTP continues to move laterally in the tight handle to its 15 week base, bouncing up off of the 10 day EMA (16.22) Friday. Solid 6 to 4 accumulation in the pattern sets the foundation for the breakout. Money flow continues to move higher ahead of price, and relative strength is moving up to breakout even before the stock does, a very bullish indication. Just want to see the volume surge as it moves through the buy point.
Volume: 1.22M Avg Volume: 1.743M
BUY POINT: $16.88 Volume=2M Target=$20.25 Stop=$15.88
POSITION: KTU BW - Feb. $17.50c (43 delta) &/or Stock
http://www.investmenthouse.com/ct/nxtp.html
Play Date: 10/04/2004
SAPE (Sapient--$8.28; +0.01; optionable): Business software
http://biz.yahoo.com/p/s/sape.html
After Hours: $8.29
STATUS: Test 50 day EMA. SAPE continues to ease back from the breakout attempt last Monday, holding at the 10 day EMA (8.17) on lower volume as it does. To recap: after a late July breakout and run up the 18 day EMA (8.06), SAPE has come back to test the 50 day EMA (7.54) on much lower, below average volume. It found that support and then exploded higher last Monday on a very strong volume surge, helped along by the SEBL announcement. Strong money flow is leading higher. Strong stocks breakout, rally 4 to 5 bounces up the 18 day EMA, test the 50 day EMA, and then start back up. After this modest pullback SAPE is set to make the move if the market starts to rebound as well.
Volume: 1.228M Avg Volume: 1.402M
BUY POINT: $8.62 Volume=1.6M Target=$10.35 Stop=$8.28
POSITION: SQC AU - Jan. $7.50c (76 delta) &/or Stock
http://www.investmenthouse.com/ct/sape.html
Play Date: 10/06/2004
SGMS (Scientific Games--$19.53; -0.15; optionable): PC hardware
http://biz.yahoo.com/p/s/sgms.html
STATUS: Double bottom w/handle. The breakout move that started Wednesday stalled out end the week, unable to clear 20 after tapping at that level the last three sessions. Not bad action at all, holding its ground as the market sold off. Solid 6 month base, a classic pattern with the August low, the second low in the base, undercutting the May low. It used the 18 day EMA (18.92) as support for the handle as volume dried up. Just the action you want to see in the handle. Looking for that strong volume breakout over 20 this week. Looks ready.
Volume: 531.602K Avg Volume: 568.874K
BUY POINT: $20.12 Volume=650K Target=$24 Stop=$19.05
POSITION: TUJ AD - Jan. $20c (53 delta) &/or Stock
http://www.investmenthouse.com/ct/sgms.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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us stock market
stock recommendation
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