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us stock market, stock recommendation
Begin part 3 of 3
THE PLAYS
Good movers Wednesday: BABY; JUPM; SNDA
Best Plays:
1) CMTL: Nice handle.
2) LEH: Nice handle forming to its base, ignoring the market.
3) DRS: Holding the lateral move as it prepares to breakout.
4) KMRT: Nice set up for the continued move.
5) SGMS: Holding up as market sells.
6) VNT: Nice breakout test.
NEW PLAYS:
Upside:
Play Date: 10/13/2004
AMED (Amedisys--$30.28; -0.10; optionable): Home Health Care
http://biz.yahoo.com/p/a/amed.html
After Hours: $30.37
STATUS: Double bottom w/handle. Volume is drying up as AMED moves laterally and slightly lower along the 10 day EMA (30.20) in its 14 week base. Outstanding 6 to 1 accumulation shows almost all buyers in the base that is setting up to launch AMED to an all-time high. Solid money flow to match.
Volume: 211.019K Avg Volume: 355.363K
BUY POINT: $31.06 Volume=533K Target=$36 Stop=$29.98
POSITION: CQE CF - Mar. $30c (58 delta) &/or Stock
http://www.investmenthouse.com/ct/amed.html
Play Date: 10/13/2004
AVID (Avid Technology--$48.65; +0.56; optionable): Electronic equipment
http://biz.yahoo.com/p/a/avid.html
After Hours: $48.60
STATUS: Double bottom w/handle. AVID is working on a nice, low volume handle to its 14 week base that is part of a larger 13 month double bottom. Accumulation in the smaller base is a solid 4 to 2, and money flow is moving higher as the stock moves laterally. Looking for volume to surge as the stock moves through the buy point. Playing some options to leverage our gain. It can rally to the high in June that started this base and makes us a nice gain.
Volume: 298.676K Avg Volume: 496.227K
BUY POINT: $49.45 Volume=744K Target=$54.55 Stop=$48.12
POSITION: AQI CJ - Mar. $50c (50 delta)
http://www.investmenthouse.com/ct/avid.html
Play Date: 10/13/2004
CMTL (Comtech Telecom--$27.02; -0.25; optionable): Telecom equipment
http://biz.yahoo.com/p/c/cmtl.html
After Hours: $27
STATUS: Double bottom w/handle. A very nice, low volume handle is forming over the 18 day EMA (26.16) as it sets up for the breakout from its 9 month base. Excellent price/volume action in that volume dried up July to early September and then surged as CMTL rallied to form the right side of the pattern. It is now shaking out the last sellers in this handle as it eases back on low volume. Money flow is screaming higher ahead or price even as it pulls back. Looks ready to make the breakout move.
Volume: 186.751K Avg Volume: 269.545K
BUY POINT: $28.12 Volume=404K Target=$34 Stop=$27.05
POSITION: CQH AE - Jan. $25c (69 delta) &/or Stock
http://www.investmenthouse.com/ct/cmtl.html
Play Date: 10/13/2004
LEH (Lehman Brothers--$80.84; -0.57; optionable): Investment brokerage
http://biz.yahoo.com/p/l/leh.html
After Hours: $80.79
STATUS: Double bottom w/handle. Working laterally and slightly lower the past week, tapping down at the 18 day EMA (79.79) on the lows Tuesday and Wednesday. Nice, traditional pattern with the right leg in July and August undercutting the left leg in May. Solid 9 to 6 accumulation in the base is setting up the breakout move as it shows net buyers during the base. Note how it has not faded in the selling, just minding its own business and holding the line as it forms the handle.
Volume: 1.442M Avg Volume: 2.122M
BUY POINT: $82.12 Volume=3.2M Target=$90 Stop=$80.32
POSITION: LES AQ - Jan. $80c (63 delta)
http://www.investmenthouse.com/ct/leh.html
CONTINUING PLAYS:
Upside:
Play Date: 10/11/2004
ARBA (Ariba--$10.74; +0.15; optionable): Internet software and services
http://biz.yahoo.com/p/a/arba.html
After Hours: $10.80
STATUS: Cup. Gapped up on slightly higher, average volume, coming off the 10 day EMA (10.40) after a rest from the stronger move higher last week. The stock is just starting to move up off of the lows in its 10 month base. It has started a series of tests, rallying off the 50 day EMA (9.38) last week and coming back on this test. It is in the process of building its base, but it is in a good risk/reward position and has plenty of room to run toward the 200 day SMA (13.43) for a nice gain.
Earnings: Oct. 27
Volume: 645.045K Avg Volume: 616.909K
BUY POINT: $10.78 Volume=835K Target=$13.45 Stop=$10.32
POSITION: IRV AB - Jan. $10c (67 delta) &/or Stock
http://www.investmenthouse.com/ct/arba.html
Play Date: 10/11/2004
DRS (DRS Technologies--$38.36; -0.28; optionable): Aerospace/ defense
http://biz.yahoo.com/p/d/drs.html
STATUS: Ascending base. Continues to move laterally, tapping at the 18 day EMA (38.10) on the low. Held up well given the overall market selling as it continues to set up in its 13 week base. DRS gapped higher to start July when it rejected a takeover attempt by LLL. It has shown strong accumulation (5 to 1) as it worked laterally in the base. The higher low and very narrow range the past two sessions along with the rising volume this week is telling us to get ready for a breakout move.
Earnings: Nov. 5
Volume: 243.3K Avg Volume: 258.136K
BUY POINT: $39.34 Volume=400K Target=$45 Stop=$38.18
POSITION: DRS CH - Mar. $40c (46 delta) &/or Stock
http://www.investmenthouse.com/ct/drs.html
Play Date: 10/04/2004
EYET (Eyetech Pharmaceuticals--$35.9; -0.1; optionable): Biotechnology
http://biz.yahoo.com/p/e/eyet.html
After Hours: $35.15
STATUS: 50 day EMA test. Continues its lateral move over the 50 day EMA (35.15) on below average volume, testing the strong volume move over that level last week. It is trying to set up a double bottom base that started in June, but this 50 day MA test is a very good risk/reward entry point. Money flow is still surging higher ahead of the stock, and we are looking for the volume to jump back up as it moves through the buy point.
Earnings: Oct. 22 after the close
Volume: 416.888K Avg Volume: 785.409K
BUY POINT: Aggressive: $35.92; Breakout: $36.82 Volume=1.1M Target=$43 Stop=$35.95
POSITION: QUJ LG - Dec. $35c (64 delta) &/or Stock
http://www.investmenthouse.com/ct/eyet.html
Play Date: 08/18/2004
KMRT (Kmart Holding--$87.25; +0.27; optionable): Discount variety stores
http://biz.yahoo.com/p/k/kmrt.html
After Hours: $87.07
STATUS: Flying plateau. KMRT continues to move in a very tight range over the 18 day EMA (86.75) on extremely low volume. This move comes after the breakout from an 8 week double bottom with handle base in September. It is very quiet, ignoring the market selling, just biding its time and setting up for the next move. Solid 3 to 0 accumulation shows solid buying. Just waiting for the next move on volume to add to positions.
Volume: 1.159M Avg Volume: 2.585M
BUY POINT: New: $88.88 (orig. positions: $80.22) Volume=3.6M Target=$100 Stop=$86.21
POSITION: KTQ AR - Jan. $90c (50 delta)
http://www.investmenthouse.com/ct/kmrt.html
Play Date: 10/05/2004
NXTP (Nextel Partners--$16.20; -0.10; optionable): Wireless telecom
http://biz.yahoo.com/p/n/nxtp.html
STATUS: Cup w/handle. Continues working on the 3 week handle to its 16 week base. It is selling back, but sparingly, holding easily over the 18 day EMA (15.94) and on mostly below average volume. Excellent action, ignoring the market and setting up for its breakout move. Formed over the 200 day SMA, using that as the bottom of the base; good sign of solid institutional support. Strong 5 to 2 accumulation in the base, and money flow is still rising as the price moves laterally in the handle.
Volume: 1.082M Avg Volume: 1.733M
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: 10/12/2004
PLMD (Polymedica--$32.38; -0.35; optionable): Drugs
http://biz.yahoo.com/p/p/plmd.html
After Hours: $32.36
STATUS: Reverse head and shoulders. PLMD started the breakout move Tuesday on strong trade, and tried to continue Wednesday, gapping higher on solid trade. As with many stocks, it was unable to hold the move. No major sell off, however. Nice 17 week base that used the 50 day EMA (30.50) and the 200 day SMA (28.43) as support, showing institutions staying with the stock. Solid base and strong money flow surging ahead of price. Relative strength broke out on the move, a good corroboration. Still looks ready to make the move.
Volume: 601.418K Avg Volume: 184.318K
BUY POINT: $32.88 Volume=250K Target=$37.78 Stop=$31.97
POSITION: PM CG - Mar. $35c (42 delta) &/or Stock
http://www.investmenthouse.com/ct/plmd.html
Play Date: 10/06/2004
SGMS (Scientific Games--$19.57; +0.04; optionable): PC hardware
http://biz.yahoo.com/p/s/sgms.html
After Hours: $19.59
STATUS: Double bottom w/handle. SGMS continues a low volume lateral move the past three sessions, unable to break over 20. Strong breakout move last Wednesday but it stalled out at 20. A very nice, low volume test of the breakout from the 6 month base, a classic pattern with the August low, the second low in the base, undercutting the May low. Getting ready to continue the breakout move.
Earnings: Nov. 1 after the close
Volume: 296.914K Avg Volume: 572.954K
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
Play Date: 10/09/2004
VNT (Compania Anomina Nac Telecom--$23.08; -0.31; optionable): Venezuelan telecom
http://biz.yahoo.com/p/v/vnt.html
STATUS: Breakout test. Still in the test of the breakout from the 24 week ascending triangle sporting solid 6 to 4 accumulation. Strong volume breakout move sent it higher, and now it is testing and holding the 10 day EMA (22.99). Strong money flow is holding up even as the stock tests. Looks ready for the next move in the breakout.
Earnings: Oct. 27 after the close.
Volume: 242.1K Avg Volume: 201.772K
BUY POINT: New: $23.55 (orig. $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
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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