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yahoo stock, us stock market
Begin Part 2 of 2
SUBSCRIBER QUESTIONS
Q: I don't understand what this "buy up to 'price' " means. If I buy a stock at 19.60 and the target is 20.58, do I sell at 20.58? Is that a point at which you think it could [start a] re-test the breakout and go down? I know NOT to buy higher than 20.58, but do I hold it at that price?
A: The two targets are discrete: First ("a buy up to..."), we will buy on a breakout move up to 5% over the breakout price. That is just our standard target for buying ON THE MOVE, because once the stock gets over 5%, it has already made a good move and more likely ready to take a breather, and we don't want to buy at a point where the stock could then test the move and potentially take us out via a stop loss right off the bat on a simple test of the breakout (using a 7% stop loss). We'd much rather buy right at or just after the breakout to be assured of the maximum gain on this move, and that 5% gives us room to do that. Second, the target (the higher price) is how far we think the stock will go, either for the short term or for the long term--it is for the bigger picture. Sometimes you will see that we say "initial" target. That means that we think the stock will at least get that high for the present time, and we might adjust that higher once the stock gets over that initial target. Most of the time an initial target coincides with resistance levels if the move was not to a new high.
So you see that the breakout target ("a buy up to...") is separate from the initial target or some longer-term target. Once the stock gets to 5%, you can hold it by riding a pullback, or get out and then get back in when and if it starts to head back up after a pullback.
THE PLAYS:
Reading the Plays: Please note that when we reference the 10, 18, and 50 day moving averages (MVA), those are exponential moving averages (EMA). The 200 day moving average is always simple (SMA). We will note when we reference a particular MVA differently, e.g., a simple 50 day MVA. Please click on the Yahoo and chart links for company and charting information.
New note for reading plays: A "prior high" refers to the high at the start of a base.
BEST PLAYS: It has been a while since we covered TRI, but it is worth a mention tonight, since it broke out of base today on strong volume. It remains a buy on the move up to 36.57. KKD broke over its 50 day MVA on strong volume on an good comments; we are looking for it to break over the 38 range to clear out overhead supply since May.
From the weekend report:
MCL: Moved higher but on lower volume. That may change tomorrow, so we are still looking for the move over the August high.
SCOR: Strong volume and a gap higher, but showed a doji.
RESP: A big gap to open down at support, then up again on stronger volume. Not easy to short with that action.
AVL: Got a shot of strong volume today, but showing another doji. We will see if it can hold support for a breakout here.
OEX: May be the "kiss good-bye" from here.
VRSN: Hit our target on the put play, then bounced back up.
Previously covered stocks and/or indexes:
BPOP: Broke out of the ascending wedge! Remains a buy on the move up to 37.13.
USB: Holding support in its nice little bouncing range.
RI: Got stronger volume and moved back up and through resistance at 19; look for the breakout!
KM: Gapped higher and moved back over the 10 day MVA, after selling back Friday. Good move (volume was strong)!
K: Moved higher on the breakout, but low volume pulled it off the high (which at 31.95 is close to our target of 32.69).
MRBK: Showing a doji in its pullback and trying to hold on.
IXX: Still looks good in its pennant. Low volume on a move up from support.
MHK: Hanging in there in the test of the breakout.
WM: In a short 5-week cup base, and pulling back to support on low volume. May be getting ready for another move up (previous high is 42.99).
SIB: Could be topping out after a 20% move..
Best Plays:
1) ROST: Testing the strong breakout, so we are looking for entry points.
2) EWBC: A nice lateral movement.
3) DJX: Setting up for a fall.
4) LOW: A strong move today on good earnings!
New:
ROST (Ross Stores--$27.78; +0.22; optionable (REQ): Retail: Apparel
http://biz.yahoo.com/p/r/rost.html
STATUS: ROST had a very nice breakout recently, and is now testing the run. Friday's low tapped at 27 (price support; the breakout point was 25.63), then the stock tried to make a move higher as volume dropped back Monday (503,800; avg. 793,590). ROST may drop back to 27 again, but if it does, we will only have a better entry point. Otherwise, on a move back over the breakout high (28.19, tapped twice consecutively on the breakout), we can look at entry points there. Earnings are out Wednesday before the open. Target: initial, 31.
BUY POINT: On a pullback to 27: Aggressive: On a move up from there on rising volume. New high: 28.20 on average or better volume. Stop: 27.
POSITION: Stock and/or November $25 calls to buy (REQ KE).
http://www.investmenthouse.com/cd/rost.html
Updates:
EWBC (East West Bancorp--$26.23; +0.12; no options): Regional banks
http://biz.yahoo.com/p/e/ewbc.html
STATUS: In a lateral consolidation on overall below average volume. The pattern formed after EWBC bounced from its 200 day MVA (now at 23) then crossed back over the remaining short term MVAs. We are looking for a breakout for a move over the June high of 27. The stock hit that high on a breakout move from its 6-month base, which failed, resulting in the correction back to the 200 day MVA. We are looking for a healthier result from this pattern. Good money flow, and relative strength is out ahead of price. Volume was up, still below average at 80,900 (avg. 150,000). Target: (initial) 30
BUY POINT: 26.46, on volume of 203,000 or more. Stop: 25 (50 day MVA).
POSITION: Stock.
http://www.investmenthouse.com/cd/ewbc.html
Indexes:
QQQ: A doji on low volume, and may be ready to move up from here into the FOMC announcement. Potential resistance at 40 and the 18 day MVA is at 40.83, but we doubt it will hit that high tomorrow. Will look for a downside play from where it is at the FOMC announcement if we get 25 basis points. We will look to October options if available tomorrow (were not showing up today; otherwise September), about $8 in the money so we can get a delta near 0.75.
OEX: Testing 600 just like we expected, and since volume was low, look for it to move back down from here after possibly drifting higher intraday tomorrow ahead of the FOMC announcement. If it does drift higher we are looking for resistance around 606-607 on that move. If it starts down from here, we will starting taking positions. Otherwise, we take positions on the FOMC announcement.
DJX (1/100 Dj--$103.20; +0.79; optionable (DJV):
STATUS: Tapped support (102) on the low and on the day moved higher, but volume was lower at 891,600 (avg. 1.1 million). The index is setting up for another move back down if it cannot break resistance at 104 (the ever-present 18 day MVA). If it makes it that far, we can go back and look at playing the index aggressively back down to 102 or lower. Indeed, we are looking to play a more aggressive play tomorrow on the Fed news if it is 25 basis points. 102 can be support. The next entry point is the move below 102 in market selling for the put down to 98-100. Support is then 98 to 100.
BUY POINT: Aggressive: 103.90 (on a move down from 104) on, preferably, rising volume. Below 102: 101.80 on rising volume.
POSITION: From 104: October $106 puts to buy (DJV JB). Below 102: October $104 or $102 puts to buy (DJV JZ or JX). Deltas unavailable at the time of this writing. Please check with your broker in the morning.
THE PORTFOLIOS: Each report, we look at these to see which is in a buy position. We don't cover them all each time, just the ones that look ready to pick up a few shares.
THE LEADERS: We have revamped this portfolio, dropping for now CPN, SGR, NATI and BRKS. Those stocks have, for the most part, dropped off and need to form bases or do some more work in ones already existing. To the New Leader section we are adding DGX, EBAY, FRX, PSFT, ADVS, and BMET. In the Previous Leader section, VRSN, VRTS, ADBE and SEBL are retained. Ones dropped include AMCC, ARBA, BEAS, BRCD, CIEN, EMC, EXTR, GLW, JNPR, NEWP, NTAP, PMCS and SCMR. All of these stocks will be kept on watch in context with improvement in their sectors and the market.
New Leaders: ESRX, ACS, NVDA, DGX, EBAY, FRX, PSFT, ADVS, BMET.
Previous Leaders in which we are still interested: ADBE, SEBL, VRSN, VRTS
NVDA: Closed just under its 50 day MVA, showing a tight doji on lower volume. We want to see it cross back over real quick.
PSFT: Another stock showing a doji on the lower volume. After falling for 4 days, may be ready to move back up from here. 200 day MVA is at 38.
FRX: Sold below the 50 day MVA.
ACS: Sitting on support (18 day MVA) on low volume. Looks good for a move up if it can get volume. Excellent price/volume action over the previous 6 days.
ESRX: Holding at the 50 day MVA.
UP & COMERS PORTFOLIOS: We have revamped the Up & Comers portfolio, and are dropping EXDS, TQNT, BVSN, SANM, PKI and GMST for now, adding BBBY, IGT, RCII, CHS, KG and AEOS.
LNCR, BJ, ANF, LOW, HI, THQI, BBBY, IGT, RCII, CHS, KG, AEOS
KG: Looks great in the handle to the double bottom pattern. Volume was lower as the stock tucked back into support at the short term MVAs, so we look for a move up and breakout. See last Thursday's report for buy point and other details.
BJ: Looks good in the pennant/flat base pattern. Earnings Tuesday.
THQI: Lost the handle after selling below the 50 day MVA on strong volume. Not a welcome move though it bounced from support at 50. Watch positions.
BBBY: Watch positions here as well. The stock is hanging above 29, but if it breaks below that it can fall to the 200 day MVA around 27.
HI: Broke support of the 50 day MVA Friday, and dropped lower today; volume was below average both days. It may be able to hold here as long as volume is low. Next most obvious support level is at 64.
LOW (Lowe's--$37.84; +2.80; optionable (LOW): Retail
http://biz.yahoo.com/p/l/low.html
STATUS: It wasn't looking great, but the stock really responded Monday to good news, an 18% rise in profits. LOW blasted back over the 50 day and short term MVAs on strong volume of 6.6 million (avg. 3.2 million), getting back into the range of the previously forming ascending wedge pattern. We are looking for a continued move up from here, watching resistance at the upper reaches of the pattern (around 39.50). At that point the stock may take a breather and turn back down for another pullback. On a breakout, we are looking at a target at the 46 range. Great money flow, and relative strength has broken out ahead of price, which is bullish.
BUY POINT: Breakout: 40, on continued strong volume. Stop: 39, revised up from 37.66.
POSITION: Stock and/or October $35 calls to buy (LOW JG).
http://www.investmenthouse.com/cd/low.html
CHS (Chico's--$36.60; +2.00; optionable (CHS): Retail: Apparel
http://biz.yahoo.com/p/c/chs.html
STATUS: Made the move we wanted, breaking over resistance at 36 on stronger volume (397,300; avg. 486,000). Our buy point was 36.12. Remains a buy up to 38-38.50 (August highs) on continued strong volume. An ideal entry point would be on a pullback to 36 in the morning, taking the opportunity on a move up from there. An aggressive play on the momentum. Target: the August highs at 38 or 38.50. From there, we may get a brief pullback then breakout over the high if we're lucky. CHS has been showing
good price/volume action over the last 8 days, and relative strength has broken out ahead of price. We like that along with the strong money flow.
BUY POINT: Aggressive: 36.05, on average or higher volume. Stop: 35
POSITION: Stock and/or November $30 calls to buy (COJ KF).
http://www.investmenthouse.com/cd/chs.html
MEMBER PORTFOLIO: We have tallied the results, and are adding the stocks subscribers voted into an updated portfolio. Two of the former members have retained their position in the mix, BRCM and CHKP. The new stocks are AMAT, JNJ, MSFT, AOL, HGSI, BUD, and PXLW.
New portfolio as selected by the subscribers. Some of these stocks are still struggling to move higher in their bases, and will likely continue to trade in close ranges just like the market. We'll be ready to catch them when they are ready to move. The new list: BRCM, CHKP, AMAT, JNJ, MSFT, AOL, HGSI, BUD, PXLW.
Old members: BRCM, CHKP, CSCO, EMLX, IDTI, INTC, JDSU, MVSN, NT, PWER, SUNW, VTSS
JNJ: Friday's bounce translated into a move back over the 18 day MVA. The stock closed right at support (10 day MVA). Volume was lower, but still strong and above average.
MSFT: Held on by moving up from a low at 61, closing just above the 200 day MVA.
CHKP: Showing a doji and holding above the August low of 35.75. Volume is below average; if it holds here, could be a 4-point aggressive play up to the 18 da
at 40.
BUD: Funny we mentioned that down trendline over the weekend; BUD broke over it and a shorter term down trendline Monday; volume was lower, though. We'd like to see it hold support here, but more likely the 200 day MVA just lower (at 43.31) will come into play as support.
Good Investing!
Jon L. Johnson and The Daily Staff
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 of 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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yahoo stock
us stock market
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