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Begin part 3 of 3
THE PLAYS
Good movers Wednesday: CAND; CRXL; NOVN; PRAA; TZOO; VRNT; CDIS
Best Plays:
1) BEIQ: Nice pullback to the 50 day EMA.
2) AGYS: Volume is surging as it moves back off the 50 day.
3) MHR: Has filled the gap, testing the breakout, and moving back up on solid volume.
4) CMTL: Surging money flow.
5) KOOL: Volume is starting to swell.
6) VION: Now it is ready after this short pullback.
NEW PLAYS:
Upside:
Play Date: 10/20/2004
BEIQ (BEI Technologies--$28.50; -0.06; optionable): Scientific & technical instruments
http://biz.yahoo.com/p/b/beiq.html
STATUS: Breakout test. BEIQ broke out from a 16 week reverse head and shoulders base to start the month on very strong volume. In the subsequent market selling it has pulled back on much lighter, below average volume to test the move, tapping at the 50 day EMA (27.85) on the Wednesday low and rebounding on slightly rising volume. Positive accumulation in the base and solid money flow set the stage for a breakout run. A leader that simply tested its breakout during the heavy selling, a sign of strength. Looking for that stronger volume on the rebound to enter positions.
Volume: 44.255K Avg Volume: 100.181K
BUY POINT: $29.22 Volume=150K Target=$34.55 Stop=$28.25
POSITION: GEU BF - Feb. $30c (43 delta) &/or Stock
http://www.investmenthouse.com/ct/beiq.html
Play Date: 10/20/2004
AGYS (Agilsys--$16.94; +0.34; optionable): Wholesale electronics
http://biz.yahoo.com/p/a/agys.html
After Hours: $16.96
STATUS: 50 day EMA test. Volume surged Wednesday as AGYS jumped off of the 50 day EMA (16.02). This test follows the late August breakout from a 6 month flat base and run up the 18 day EMA (16.80). After that run it needed a breather, and strong stocks will come back and test the 50 day and then resume the move on strong trade. That is what AGYS is doing: low volume pullback to test the 50 day EMA this month and now starting back up on volume, showing the short term sellers are out and the longer term buyers are moving back in. We want them to carry us higher with them. Money flow has turned back up ahead of price and relative strength is moving for the next breakout.
Volume: 483.975K Avg Volume: 289.681K
BUY POINT: $17.12 Volume=400K Target=$20.49 Stop=$16.65
POSITION: OQJ AW - Jan. $17.50c (46 delta) &/or Stock
http://www.investmenthouse.com/ct/agys.html
Play Date: 10/20/2004
MHR (Magnum Hunter Res.--$12.40; +0.43; optionable): Oil and gas exploration
http://biz.yahoo.com/p/m/mhr.html
STATUS: Breakout test. MHR gapped out of a 5.5 month base two weeks back, exploding higher on strong volume. It has since pulled back on lower volume, filling the gap and holding support and the breakout at the 18 day EMA (12.08). As with many oil and gas stocks it sold back this month, but MHR was under control as it did. Nice money flow and still solid relative strength. Started back up on Wednesday on very strong volume, and looking to move in on a further rebound on volume.
Volume: 1.63M Avg Volume: 798.636K
BUY POINT: $12.62 Volume=1.2M Target=$15 Stop=$12.05
POSITION: MHR CV - Mar. $12.50c (53 delta) &/or Stock
http://www.investmenthouse.com/ct/mhr.html
Play Date: 10/20/2004
PLAB (Photronics--$17.48; +0.62; optionable): Chip equipment
http://biz.yahoo.com/p/p/plab.html
After Hours: $17.40
STATUS: Test 200 day SMA. PLAB is not near a high, but it is well off of the low of its year long base, having rallied off of the August low with the market. The stock exploded higher and through the 200 day SMA (17) earlier this month on news of an acquisition in its sector. It has filled the gap, held, and now is starting back up on very strong, above average volume following a very low volume pullback. Money flow is surging higher ahead of price, and we are looking for the stock to follow it higher for a nice rally.
Volume: 949.807K Avg Volume: 569.727K
BUY POINT: $18.05 Volume=750K Target=$22 Stop=$16.99
POSITION: PQF CW - Mar. $17.50c (55 delta) &/or Stock
http://www.investmenthouse.com/ct/plab.html
Play Date: 10/20/2004
SMH (Semiconductor Holders Trust--$31.05; +0.65; optionable)
http://biz.yahoo.com/p/s/smh.html
After Hours: $31.34
STATUS: Flat base. SMH has moved laterally the past 6 weeks in a trading range between 29.50 and 32. Volume has surged the past two sessions as SMH moved off the bottom of the range, clearing the 50 day EMA (30.94) on the Wednesday close. Volume was tremendous Wednesday. Looking to start positions on a further volume move, anticipating a breakout from the range this time around. Playing options on this one and looking for a 65%ish gain.
Volume: 42.525M Avg Volume: 23.77M
BUY POINT: $31.21 Volume=28M Target=$34 Stop=$30.88
POSITION: SMH AF - Jan. $30c (69 delta)
http://www.investmenthouse.com/ct/smh.html
CONTINUING PLAYS:
Upside:
Play Date: 10/07/2004
CHT (Chunghwa Telecom--$18; -0.04; optionable): Chinese wireless telecom
http://biz.yahoo.com/p/c/cht.html
STATUS: Test breakout. Could not continue higher after the Tuesday attempt but still hanging in the pattern as it tests the breakout from its 24 week double bottom. Still holding up better than the market overall as judged by its relative strength line, but need to see volume kick back in as it starts the rebound move again.
Volume: 112K Avg Volume: 194.59K
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--$27.24; +0.61; optionable): Telecom equipment
http://biz.yahoo.com/p/c/cmtl.html
After Hours: $26.48
STATUS: Double bottom w/handle. Still working on the handle to its 9 month base, holding the 18 day EMA (26.57) as it moves laterally in a tight range. Money flow continues to surge higher ahead of price, and looks as if it is just a matter of time before CMTL follows it. Telecom is coming to life again, and this is a great set up to another run.
Volume: 128.491K Avg Volume: 266.272K
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: 10/18/2004
HMX (Hartmarx--$7.99; +0.31; no options): Men's Apparel Group, Women's Apparel Group
http://biz.yahoo.com/p/h/hmx.html
STATUS: Cup. HMX continues to hang right at the breakout point from its 12 week base. Volume has surged this week as it prepares for the breakout. Solid base that formed over the 50 day EMA (7.25), a good sign of institutional support. Accumulation is also a strong sign, showing an excellent 5 to 1 reading. Strong money flow and relative strength making the breakout move. Looks ready.
Volume: 278.2K Avg Volume: 131.181K
BUY POINT: $8.09 Volume=150K Target=$9.75 Stop=$7.52
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/hmx.html
Play Date: 10/02/2004
KOOL (Thermogenesis--$5.08; +0.12; no options): Scientific & technical instruments
http://biz.yahoo.com/p/k/kool.html
After Hours: $5.04
STATUS: Double bottom w/handle. Very nice flat lateral move above the 18 day EMA (4.90) to form the handle to a 37 week base. Solid 8 to 5 accumulation and money flow is surging higher ahead of price, leading the way. Relative strength is already breaking out and volume has moved above average the past two sessions. Looks ready to make the move.
Volume: 138.132K Avg Volume: 114.59K
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: 10/16/2004
RSTI (Rofin-Sinar Tech--$30.43; +0.60; optionable): Scientific & technical instruments
http://biz.yahoo.com/p/r/rsti.html
STATUS: Double bottom w/handle. RSTI continues a low volume pullback to form a second handle at the 18 day EMA (29.90) to its 9 month base. Outstanding money flow is way ahead of price. Strong 9 to 4 accumulation shows net buyers during the base. Has all of the attributes for a strong breakout and run, and just waiting for the volume to surge as it moves through the buy point.
Volume: 77.363K Avg Volume: 127.181K
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
Play Date: 10/19/2004
VION (Vion Pharma--$4.50; -0.15; no options): Biotechnology
http://biz.yahoo.com/p/v/vion.html
STATUS: Cup w/handle. Continues the low volume pullback, tapping at the 18 day EMA (4.35) on the Wednesday intraday low and rebounding to recoup most of the loss. A very nice 23 week base with outstanding 8 to 2 accumulation (8 up price weeks on rising volume to 2 down price weeks on rising volume). Excellent money flow is leading the way higher, and the accumulation has set up the breakout move. Volume was strong last week, then backed off this week. Waiting for the volume to return on the breakout move.
Volume: 359.392K Avg Volume: 479.136K
BUY POINT: $4.85 Volume=700K Target=$6 Stop=$4.51
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/vion.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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