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Betgin Part 2 of 2
Notes on previously covered stocks: Some that were dropped this weekend still look good: NTIQ is back over the 18 day MVA on stronger volume, EEFT may be ready to break to a new high, SLVN is still holding up above support, MTG moved back over the short term MVAs in its pennant (volume was a tad lower), and CERN is hanging in there at support in the handle to its cup base (volume has been volatile). ASBC, ARE (pulled off its new high on lower volume) and COTT look ready to pull back after their breakouts.
Best Plays:
1) TRMK: Moving up on stronger volume in the ascending wedge.
2) AOC: A solid move up from support.
3) KNDL: Still tight, and got some solid volume today.
4) SKYF: A good move up, but needs volume.
5) AAS: May be ready to head higher after a short pullback.
6) Puts: CERS, MMC, DJX, OEX, AMGN
7) JCP: Broke resistance on stronger volume.
8) GP: A nice little ascending wedge pattern.
9) CHRW: Tightening up.
10) GOTO: Moving laterally on low volume.
NEW PLAYS:
From the weekend:
TRMK (Trustmark--$24.40; +0.28; no options): Regional banks
http://biz.yahoo.com/p/t/trmk.html
STATUS: In an ascending wedge pattern that formed since mid-July and has shown decreasing volume throughout until Monday, when it rose to 104,100 (avg. 135,000). The stock opened at 23.88, below support, then made a nice move back through the 1- and 18 day MVAs. Looking for the breakout. Good money flow and buying. Target: initial 29
BUY POINT: 24.88, on minimum breakout volume of 183,000. Stop: 23.90 (below the 18 day MVA, at 23.99). A buy on the breakout up to 26.
POSITION: Stock.
AOC (Aon--$38.60; +0.43; optionable): Insurance
http://biz.yahoo.com/p/a/aoc.html
STATUS: A test of the breakout from a saucer base, and moving up Monday on rising volume, just the action we wanted to see. Looking for a move over the breakout high at 39.30. Target: (initial) 43.
BUY POINT: 39.43, on volume in the range of 416,000. Stop: 38.
POSITION: Stock and/or October $35 calls to buy (AOC JG).
KNDL (Kendle Intl--$20.25; -0.08; optionable): Drug
http://biz.yahoo.com/p/k/kndl.html
STATUS: Testing the recent breakout by pulling back and consolidating above its 10 day MVA (20.08) on low volume. The pattern is really tightening up, showing its 4th consecutive doji, and on the shot of volume today (up to 68,200; avg. 77,000), the stock may be ready to make its move up. It can test the 10 day MVA first, however. The stock formed a similar but longer pattern the first two-thirds of July, but the stock may not take that long to resolve, judging from the tightness of the pattern. Strong money flow and high relative strength. Initial target: 25
BUY POINT: Over 21.35 on volume of 78,000 or higher. Stop: 20.
POSITION: Stock and/or November $17.50 calls to buy (KQR KW; low open interest).
SKYF (Sky Fincl--$20.66; +0.40; no options): Regional banks
http://biz.yahoo.com/p/s/skyf.html
STATUS: Recently broke from a flat base and is testing, having fallen back to the 10 day MVA Friday on lower volume. The stock held support at its low (20.22, Friday) and headed up from there today, making a nice move and making our buy poing of 20.60, but volume was lower at 55,300 (avg. 141,000). Looks good, but needs the volume. That may improve tomorrow on the rate cut, so look for a breakout over the high at 20.90. Good buying and high relative strength. Initial target: 23
BUY POINT: Breakout: 21, on volume of 141,000 or better. Stop: 20.00
POSITION: Stock.
PHTN (Photon Dynamics--$39.80; +1.46; optionable): Chip Equipment
http://biz.yahoo.com/p/p/phtn.html
STATUS: Moving up in the handle to a 9.5-month saucer/cup base, and added to Friday's move but on lower volume of 307,700 (avg. 263,000), beating our aggressive buy point of 39.30. We are looking for a breakout over 40.66 (handle high), so want to see volume surge back up. If it cannot, look for support at the 38 range (price support from late July and this month). Our initial target are the highs at the start of the current base, at 43-44. Super money flow and positive buying.
BUY POINT: Breakout: 40.79, on minimum breakout volume of 395,000 Stop: 38.50
POSITION: Stock and/or October $35 calls to buy (PDU JG; low open interests).
New Trading Plays: Take the move and move on.
Now a possible put play:
SOX (Phili Semi--$561.11; +5.57; optionable):
STATUS: Found some support near 550, moving up slightly today. We are looking for the possible bounce up to the 575 range (earlier August lows; 10 day MVA at 582.38) and then retreat back for a put play. However, we will also look at selling back upon the FOMC announcement tomorrow even if it has not reached up to resistance. There is potential support in the 537 range (March and July prices), and we will see how it handles that. On a continued drop it could visit 500.
BUY POINT: A drop back after a move that fails in the 575 range. Also, after a bit of a move up tomorrow, selling back upon the FOMC announcement.
POSITION: September $580 puts to buy (SJX UP). From 565: September $570 puts to buy (SJX UN). Deltas unavailable at the time of this writing. Please check with your broker.
AAS (Amerisource--$58.85; -0.15; optionable): Drugs wholesale
http://biz.yahoo.com/p/a/aas.html
STATUS: Made a move off the 18 day MVA on strong volume. The stock is in an 8-week base with a prior high of 62.50, and we are looking for a trade up to that level, initially. Monday we got a pullback to a doji on lower volume (805,100; avg. 774,000). As lower support, 58 looks good, so if the stock can get some heavy buying again, we are looking for a move back up from that level, or from this doji.
BUY POINT: Aggressive: 59.50, on rising volume. Stop: 56.70 (50 day MVA).
POSITION: Stock and/or November $55 calls to buy (AAS KK).
THOR (Thorate--$18.68; +1.04; optionable): Medical Instruments
http://biz.yahoo.com/p/t/thor.html
STATUS: Added to Friday's strong move over the short term MVAs and volume was only a little lower (1.67 million; avg. 438,000). That may change if overall market volume improves tomorrow; we are looking for a breakout over the handle high at 19.59. THOR is in a 10-month cup with handle base, showing great money flow and buying. Initial target: 23
BUY POINT: Breakout: 19.72, on continued strong volume (minimum breakout volume is 657,000). Stop: 18.
POSITION: Stock and/or October $12.50 calls to buy (TQU JV). Deltas unavailable at the time of this writing. Please check with your broker.
FFIV (F5 Networks--$14.45; -0.14; optionable): Software
http://biz.yahoo.com/p/f/ffiv.html
STATUS: In a huge base (prior highs from fall 1999) but just off the lows around 4. FFIV reached a June high at 19.20 on a breakout over the 200 day MVA, but crossed back below that major support until Friday, when strong volume took it back over all its moving averages. We are looking for a move back up to the June high as a target, though today was a disappointment. At least volume was lower (605,300; avg. 619,000) today. The stock did test lower support (18 and 50 day MVAs) on the low of 14.06, but the hold at the major support is positive.
BUY POINT: Aggressive: 15.50, on continued rising volume. Stop: 13.85 (50 day MVA).
POSITION: Stock and/or October $12.50 calls to buy (FLK JV).
A Short Sale:
PTMK (Pathmark Stores--$23.65; +0.55; no options): Grocery
http://biz.yahoo.com/p/p/ptmk.html
STATUS: The stock broke support of its 50 day MVA on strong volume Friday and we were looking at selling the stock short on a move down to 19-20 (the 200 day MVA is at 19). However, PTMK broke back over the 50 day MVA, albeit on lighter, below average volume (152,000; avg. 234,000). The high of 24.08 stretched above the short term MVAs, but pulled back down. We will keep the play alive for now, but if it gets any higher, we'll drop it.
BUY POINT: Aggressive: Below 22.95 on continued strong volume. Stop: 23.86 (18 day MVA 23.86)
POSITION: Stock.
New Puts (from the weekend):
BBY (Best Buy--$59.40; +0.12; optionable (BBY): Retail
http://biz.yahoo.com/p/b/bby.html
STATUS: BBY gapped down and hit the buy point (58.50), but after hitting 57.23 the stock ran back up to close, moving on sharply higher, above average volume (2.83 million; average 2.43 million). We will see if the upward momentum dies, either at 60 (high of 59.90 today) or the 10 day MVA (61.16), and will look for a strong run back down. The new buy point is below today's low at 57.23. Our target is 50. Some discouraging analyst comments out Friday may help this one fall.
BUY POINT: Aggressive: After a failed move to the 60-61 range, a move back through 58.50 on rising volume. Stop: 61.50. On a move below the August low: 57, on strong and rising volume. Stop: 61.50.
POSITION: September or October $70 puts to buy (BBY UN or BBY VN).
RYAAY (Ryanair--$51.00; +0.21; optionable): Regional airlines
http://biz.yahoo.com/p/r/ryaay.html
STATUS: The stock broke through strong support (the 200 day MVA at 51.10), and has since tried to break back over it, but failed each time. After an initial strong attempt, the stock has made a couple of weak efforts, today showing a doji after hitting down to 50.06 at its low. Volume was again very low at 39,500 (average 112,000), and we are looking for a strong move back from here. Target: March lows near 42.
BUY POINT: Below 49.50 on above average selling volume. Stop: 51.50.
POSITION: December $55 puts to buy (ZQ XK).
CERS (Cerus--$60.01; +2.46; optionable): Biotech
http://biz.yahoo.com/p/c/cers.html
STATUS: Continues to struggle with the 200 day MVA (60.73), but has not made the definitive drop. It gapped up and hit as high as 61.78 before retreating to hit the buy point of 57 (low of 56.79) and then recovering to close with a doji under resistance. Could still give us the drop as it is under resistance, but a higher volume move up even with the doji makes us cautious. Looking for a move below recent lows (last week 55.60). Target: initial, 50; below that, 45.
BUY POINT: Aggressive: After a move back over the 200 day, a drop back below 59 on continued strong volume (down to 311,500 Monday; average 93,500. Stop: 60.73 (200 day MVA).
POSITION: October $70 puts to buy (CEQ VN).
DIGE (Digene--$28.51; -0.78; optionable): Drugs
http://biz.yahoo.com/p/d/dige.html
STATUS: After retreating back through the 200 day MVA (30.57) on Friday, following a failed move on the 50 day (32.23), DIGE gapped down. Volume was up to a strong 162,700 (average 113,000) as the stock managed to hold over last week' low at 28.11. Target: initial, 25.
BUY POINT: 28, on continued strong volume.
POSITION: Both buy points: October $35 puts to buy (QDG VG).
MSCC (Microsemi--$58.17; -1.58; optionable): Chip
http://biz.yahoo.com/p/m/mscc.html
STATUS: Hit our buy point on the put today (59), moving down on bigger volume (1.26 million; average 798,200). However, it bounced back up from its low of 56.20 to close. We will see how it responds; if we get a move up toward the 50 day MVA (61.50) on lower volume, we will watch for a drop back again toward our initial target of 55.
BUY POINT: After a lower-volume test of the 50 day MVA, a drop back through 58 on strong volume. Stop: 62
POSITION: October $70 puts to buy (QMS VN).
MMC (Marsh & Mclennon--$98.25; +3.04; optionable): Insurance
http://biz.yahoo.com/p/m/mmc.html
STATUS: Managed a relief bounce after Friday's selling, running back up from its July lows to close just under its 10 day MVA (98.91). Volume was sharply lower than we saw on Friday's selling, although still above average at 944,500 (average 799,400). We will need to see it take out that support for a put play. Our initial target is 90, then 85 (April low is at 80).
BUY POINT: A move below 95 on continued above average volume. Stop: 99.
POSITION: October $95 or $100 puts to buy (MMC VS or VT).
Continued Puts: BSC hit our target for the put. We will see what it does from here.
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;
otherwise, look for the move below 102 in market selling for the put down to 98-100.
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.
OEX (Standard & Poors--$598.79; +4.92; optionable):
STATUS: Testing the 600 resistance as expected, after opening lower at 593.83. Volume was lower on the move up, at 891,600 (avg. 1.1 million), and we are looking for a move down from here for the put play if the index cannot break resistance. If it can, the OEX can move up to the 607 range, but if that is on low volume, look for the likely turn back down from there (or the 606 level, at the 10 day MVA). Target: 568
BUY POINT: 598, on a move down on rising volume.
POSITION: September $600 puts to buy (OEY UT). Please check with your broker for
deltas.
AMGN (Amgen--$59.93; -0.02; optionable): Biotech
http://biz.yahoo.com/p/a/amgn.html
STATUS: AMGN is holding on, today closing with another doji under resistance (18 and 50 day MVA's at 60.82 and 61.27, respectively). Volume continued to decrease, coming in light at 4.52 million Monday (average 7.37 million). Still looking weak and set up for a possible drop, and if it heads below 58.30 (last week's low) on selling, we can still look at playing it down to our target at 53-54.
BUY POINT: 58.25, on increased volume near the average. Stop: 62.
POSITION: September $65 puts to buy (YAA UM).
CONTINUED PLAYS:
Bounce play:
JCP (J.C.Penney--$26.90; +1.02; optionable): Retail
http://biz.yahoo.com/p/j/jcp.html
STATUS: Making a stronger move off the 50 day MVA (25.73), with volume rising to 1.4 million (avg. 1.7 million). We like the break over resistance of the short term MVAs, which has held JCP back over the last week or so. Looking for a run up to the July highs at 29.50. High money flow and relative strength. Initial target: 29.50
BUY POINT: Aggressive: 27.10, on rising volume (1.5 million or better). Stop: 25.73 (50 day MVA).
POSITION: Stock and/or November $22.50 calls to buy (JCP KX).
Trading Plays: These stocks are not necessarily long-term plays for now. The plan is to look at a shorter-term target, taking profits when we get there, then leaving. If the play falters or gets hit with some selling, we won't wait around too long for it to recover.
SAGI (Sage--$18.29; +0.54; optionable): Integrated circuits
http://biz.yahoo.com/p/s/sagi.html
STATUS: After a slight pullback with consecutive dojis over its 10 day MVA (17.20), SAGI moved back up Monday. It closed just below its recent (last Wednesday) breakout high of 18.50, but volume on the move was not what we were looking for, coming in sharply lower at 140,300 (average 204,500). We will see if we get some more volume on a move over the breakout high, and we are looking for a move up to the prior basing highs (9-month cup base) for an initial target: 21. Great money flow and buying.
BUY POINT: Aggressive: Over 18.50 on above average volume. Stop: 17.10.
POSITION: Stock and/or October $15 calls to buy (UEJ JC).
BREAKOUTS:
Removed ARE, which had a fine breakout; volume, however, keeps pulling back. Also, ASBC, which may be topping out here. Good performers!
WEDGES, PENNANTS, and FLYING PLATEAUS (AND FLAGS): These are some of our favorite patterns as the moves can be explosive. In this market, however, we need to see the move on the breakout on strong volume.
Ascending wedges:
GP (Georgia Pacific--$37.13; +0.38; optionable): Materials & Construction
http://biz.yahoo.com/p/s/sagi.html
STATUS: In a small ascending wedge pattern above the 10 day MVA, as the stock tested last week's stronger move up from the 10 day MVA (at 36 at that time). Volume was stronger as the stock halted for the 4th day at resistance (37 level). We are looking for this volume surge to break the stock out. Volume was strong at 1.7 million (avg. 1.5 million). Target: 43
BUY POINT: 37.62, on volume of 2 million or better. Stop: 36.50.
POSITION: Stock and/or October $35 calls to buy (GP JG).
Continued:
CHRW (C.H.Robinson Worldwide--$30.74; 0.00; optionable): Transportation
http://biz.yahoo.com/p/c/chrw.html
STATUS: Has pulled laterally near the highs in its ascending wedge. CHRW tested its 10 day MVA at its low of 30.55, moving on volume that continued to decrease at 144,900 (average 212,000). The pattern is tightening, holding its 18 day MVA (30.22 currently) on its last move down. We are looking for a move over the May high of 31.28 for the breakout. Continued strong money flow and high relative strength. Target: 36
BUY POINT: Breakout: 31.41, on volume of 290,000 or better. Stop: 30.18.
POSITION: Stock and/or November $30 calls to buy (CJQ KF).
SON (Sonoco Products--$25.20; -0.40; no options): Paper
http://biz.yahoo.com/p/s/son.html
STATUS: SON held the 18 day MVA (25.45) on a test Friday, but gave it up today, falling back toward the 50 day (25.06). Volume was lighter (121,900; average 141,300), and the 50 day has been solid support in this pattern. Therefore, we will look for the stock to hold support here and make a move back up toward breakout. The ascending wedge-type pattern formed as a handle to a large cup at the bottom of the stock's much larger base. Target: 30
BUY POINT: 26.13, on volume of 193,000 or better. Stop: 24.85. A buy on a breakout up to 27.44.
POSITION: Stock.
Pennant: MTG is showing higher volume as it holds at the 50 day MVA, not able to break over resistance. It is showing distribution. We will keep it on a watchlist for the breakout (buy point 77.13).
BASING/TRADING RANGES:
Continued:
TMCS (Ticketmaster Online--$15.50; -0.45; optionable): Software
http://biz.yahoo.com/p/t/tmcs.html
STATUS: Off the lows (around 7) in a base that is almost at three years in length. The stock has formed a cup base (although with a "u" dip down to the 200 day MVA in July; almost a reverse head and shoulders), and has made a recent move up that took it as high as 16.77. We were looking for a pullback and the formation of a handle, but Monday's selling was on heavier volume than we would like (728,800; average 495,500), although it did touch its 18 day MVA at its low of 15.13 before recovering to close on the 10 day. Looking for it to hold this range and move back up to the breakout. Target: 19-20
BUY POINT: 16.90, on volume of 743,000 or better. Stop: 16. Aggressive: Over 16 on continued strong volume. Stop: 15.
POSITION: Stock and/or October $15 calls to buy (QMF JC).
Basing: Keeping SOTR on a watchlist, which is having trouble breaking resistance at 26.64.
GOTO (Goto.Com--$24.00; +0.10; optionable): Internet
http://biz.yahoo.com/p/g/goto.html
STATUS: GOTO is in a really long base (2 years) and off the lows around 6. It has been back over its 200 day MVA for nearly 4 months, and has formed an 11-week cup base. GOTO has now shown consecutive dojis over its 10 day MVA (23.47) since a decent move up over that level last Thursday, pulling back from its intraday high today at 25. Volume was lighter at 420,300 (average 964,000), and we will see if it can hold the 10 day and give us a breakout over July's high (25.15). Initial target: 30.
BUY POINT: Breakout: 25.28, on volume of 1.4 million or better. Stop: 23.51
POSITION: Stock and/or November $20 calls to buy (GUO KD).
CWN (Crown American--$8.50; +0.04; no options): REIT
http://biz.yahoo.com/p/c/cwn.html
STATUS: In a pennant/flat base of nearly 3 months' length. CWN showed a second consecutive loose doji Monday, again reaching up slightly to 8.56 before pulling back. Volume was up and closer to the average (80,400; average 88,000), and we could get a retest of the 10/18 day MVAs (8.40, 8.35 respectively), and from there we continue to look for the breakout. Initial target: 10
BUY POINT: 8.62, on volume of 132,000. Watch the May high of 8.72 for resistance. Stop: 8.06. A buy on the breakout up to 9.05.
POSITION: Stock.
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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