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trade stock, stock recommendation
Begin part 3 of 3
THE PLAYS
Good movers Friday: CRXL; NXTP; PPDI; WITS; YUM
Best Plays:
1) CDIS: Nice breakout test.
2) PRAA: Ready for the breakout from a well-formed base.
3) RSTI: Good handle and ready to make the breakout.
4) CHT: Pullback looks to be over with this star doji.
5) TZOO: Looks ready to resume the move.
6) VNT: Looks as if the pullback is over.
NEW PLAYS:
Upside:
Play Date: 10/16/2004
AXP (American Express--$52.5; +0.79; optionable): Credit services
http://biz.yahoo.com/p/a/axp.html
STATUS: Double bottom w/handle. AXP won an important court battle regarding its access to markets controlled by Mastercard and Visa. Cannot say we agree with the ruling, but the stock has formed up well in anticipation of the news and is preparing for another breakout from its 8 month base. Volume surged Friday as the stock moved up off the 18 day EMA (52); you could call this a test of the early October breakout that occurred when the news was delivered regarding the lawsuit. It tested that move on low volume, and the retail sales numbers Friday acted as the next catalyst to continue the breakout move. Strong 8 to 4 accumulation in the base shows net buyers and has set the foundation for a breakout and run higher. Excellent money flow is surging higher ahead of price and relative strength broke out Friday ahead of the stock price, a very bullish indication for a breakout.
Volume: 6.145M Avg Volume: 3.284M
BUY POINT: $53.55 Volume=4.9M Target=$60 Stop=$51.12
POSITION: AXP AJ - Jan. $50c (85 delta)
http://www.investmenthouse.com/ct/axp.html
Play Date: 10/16/2004
BSTE (Biosite--$49.45; +0.44; optionable): Diagnostic substances
http://biz.yahoo.com/p/b/bste.html
STATUS: 50 day EMA test. BSTE is one of the leading stocks in sales and earnings. It is testing the 50 day EMA (48) as part of a continuing move higher after a mid-August breakout. This is part of a much larger 15 month base, and BSTE is positioning itself for an all-time high. Looking for volume to ramp up as it rebounds off the 50 day and moves through the 10 day EMA (49.75).
Volume: 244.307K Avg Volume: 306.363K
BUY POINT: $49.88 Volume=460K Target=$56 Stop=$47.97
POSITION: BQS AJ - Jan. $50c (51 delta) &/or Stock
http://www.investmenthouse.com/ct/bste.html
Play Date: 10/16/2004
CDIS (Cal Dive--$36.08; +0.23; optionable): Oil and gas service company
http://biz.yahoo.com/p/c/cdis.html
After Hours: $36.02
STATUS: Test 18 day EMA. Energy stocks came under pressure the past week, sending many reeling lower. CDIS sold back, but it was not one of those careening lower on high volume. It fell back to the 18 day EMA (35.62) on Wednesday, held its ground on Thursday with some solid volume, and closed out he week still holding that level as volume backed off. CDIS broke out from an 8 week base in early September and ran to 38.75 on the first breakout run. Stocks typically use the 18 day EMA as support for a test of the breakout move, exactly what CDIS appears to be doing here. Indeed, money flow is still strong and has started to turn higher ahead of the price. We expect CDIS to follow it higher.
Volume: 246.619K Avg Volume: 426.681K
BUY POINT: $36.58 Volume=640K Target=$42.65 Stop=$35.55
POSITION: KPQ CG - Mar. $35c (64 delta) &/or Stock
http://www.investmenthouse.com/ct/cdis.html
Play Date: 10/16/2004
PRAA (Portfolio Recovery--$33.49; +1.41; no options): Outsourced receivables management
http://biz.yahoo.com/p/p/praa.html
STATUS: Cup w/handle. PRAA is another top rated stock in earnings and sales, and it has set up a very nice 17 month base. It has taken a long time, but it is on the verge of a breakout. Volume started to surge to start the month, and has shown several solid volume spikes as it moved laterally over the 10 day EMA (32.21) in a narrow range. Friday volume spiked sharply and the stock moved right up to the breakout point. Money flow is surging higher ahead of price and relative strength broke out ahead of the stock, a very bullish move. Looking for a continued volume surge as it moves through the buy point.
Volume: 425.265K Avg Volume: 110.181K
BUY POINT: $33.89 Volume=188K Target=$40 Stop=$32.09
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/praa.html
Play Date: 10/16/2004
RSTI (Rofin-Sinar Tech--$30.11; +0.86; optionable): Lasers for various applications
http://biz.yahoo.com/p/r/rsti.html
After Hours: $30.06
STATUS: Cup w/handle. RSTI is moving laterally and lower on very low, below average volume as it forms the handle to its 9 month base. Strong 7 to 4 accumulation in the base (7 up price weeks on rising volume to 4 down price weeks on rising volume) shows net buyers moving into the stock. Outstanding money flow continues to run higher ahead of price even as the stock makes this low volume pullback. The handle is holding above the 200 day SMA (28.32) on this test, a key support level it broke on strong volume to start the month. Setting up for the breakout and run.
Volume: 63.907K Avg Volume: 131.772K
BUY POINT: $31.02 Volume=200K Target=$37.75 Stop=$29.78
POSITION: QRT CF - Mar. $30c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/rsti.html
CONTINUING PLAYS:
New buy points for additional positions on current plays:
Play Date: 10/11/2004
TZOO (Travelzoo--$62.18; -0.19; no options): Online travel deals
http://biz.yahoo.com/p/t/tzoo.html
After Hours: $61.06
STATUS: Breakout test. A nice doji over the 18 day EMA (59.73) Friday as TZOO eased back to hold that level after a nice rebound off the 50 day EMA to start the week. TZOO made us some great money when it blasted out of a base in August and rallied to over 70. It has tested the 50 day EMA (52.03) and jumped higher on volume. Now it is taking a breather from that move. Looks ready to resume and we will look at more positions as it rebounds on rising trade.
Volume: 1.188M Avg Volume: 2.12M
BUY POINT: $62.82 Volume=2.9M Target=$80 Stop=$59.38
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/tzoo.html
Upside:
Play Date: 10/11/2004
ARBA (Ariba--$10.37; -0.11; optionable): Internet software and services
http://biz.yahoo.com/p/a/arba.html
After Hours: $10.34
STATUS: Cup. Nice doji at the 10 day EMA (10.41) on low, below average volume as ARBA continues its lateral move over the 10 day as it consolidates the strong volume surge higher to start the month. That surge was part of ARBA's move off of the lows of its 10 month base. It is in the process of building its base, and remains in a good risk/reward position and has plenty of room to run toward the 200 day SMA (13.36) for a nice gain.
Earnings: Oct. 27
Volume: 407.472K Avg Volume: 614.409K
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: 10/13/2004
AVID (Avid Technology--$48.4; 0.00; optionable): Electronic equipment
http://biz.yahoo.com/p/a/avid.html
STATUS: Double bottom w/handle. Another low volume session as AVID works laterally along the 10 day EMA (48.26) as it continues the handle to its 14 week pattern 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. Looks ready but need to see volume surge as it 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 some nice profit.
Volume: 226.807K Avg Volume: 491.818K
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: 10/07/2004
CHT (Chunghwa Telecom--$17.85; -0.07; optionable): Chinese wireless telecom
http://biz.yahoo.com/p/c/cht.html
STATUS: Breakout test. CHT broke out from a 24 week double bottom in early October and ran close to 19 on the move. It has since sold back to fully test the breakout, holding at the 18 day EMA (17.88) and showing a star doji at that level on rising, above average volume. That star doji is a strong indication a rebound is over and a resumption of the breakout is coming. We need to see volume remain strong as it turns back up off of this test.
Volume: 190.2K Avg Volume: 198.727K
BUY POINT: $18.14 Volume=306K Target=$22 Stop=$17.66
POSITION: CHT CW - Mar. $17.50c (76 delta) &/or Stock
http://www.investmenthouse.com/ct/cht.html
Play Date: 10/13/2004
CMTL (Comtech Telecom--$27.29; +0.27; optionable): Telecom equipment
http://biz.yahoo.com/p/c/cmtl.html
STATUS: Double bottom w/handle. Continues its lateral move over the 18 day EMA (26.36) on low, below average volume, forming the handle to its 9 month base. Again, excellent price/volume action as volume dried up July to early September and then surged as CMTL rallied to form the right side of the pattern. This lateral move shakes out the last sellers and sets up the breakout. Money flow is still screaming higher ahead or price. Just being patient and waiting for the strong breakout move.
Volume: 134.817K Avg Volume: 268.909K
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: 10/12/2004
PLMD (Polymedica--$32.32; +0.2; optionable): Drugs
http://biz.yahoo.com/p/p/plmd.html
After Hours: $32.38
STATUS: Reverse head and shoulders. Started the breakout Tuesday, but then reversed some of the move Wednesday on very strong trade after it gapped higher. It spent the rest of the week making a test of the 18 day EMA (31.44) on the Friday low and then rebounding to close positive on the session on some decent volume. Nice 17 week base that used the 50 day EMA (30.63) and the 200 day SMA (28.49) 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. After this test it looks ready to make a serious upside move.
Volume: 208.36K Avg Volume: 193.181K
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--$19.36; -0.08; optionable): PC hardware
http://biz.yahoo.com/p/s/sgms.html
STATUS: Double bottom w/handle. Volume remains low as SGMS continues working on what looks to be another handle or a continuation of the original handle in its 6 month base. It is tapping the 18 day EMA (19.16) on the intraday lows and rebounding to close basically flat; lots of support at the 18 day. It needs to show another strong volume breakout, however, to show us enough buyers want it to send it sharply higher.
Earnings: Nov. 1 after the close
Volume: 377.542K Avg Volume: 565.818K
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--$22.54; -0.03; optionable): Venezuelan telecom
http://biz.yahoo.com/p/v/vnt.html
STATUS: Breakout test. The low volume test of the breakout continues, with VNT holding the 18 day EMA (22.51). The 18 day is a normal near term support level for a breakout, and VNT still holds 50% of its breakout gain. Nice breakout and test of a 24 week ascending triangle sporting solid 6 to 4 accumulation. Strong money flow remains. This is where it needs to hold and resume its upside move. It looks solid, and the first test of a breakout is one of our favorite entry points because when the stock surged back up on strong volume it shows us the big money still wants the stock even after the breakout surge.
Earnings: Oct. 27 after the close.
Volume: 87.7K Avg Volume: 203.59K
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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trade stock
stock recommendation
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