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Begin part 3 of 3
THE PLAYS
Good movers Friday: AAPL; CCRT; HOLX; KDE; LUK; OVNT; SEBL; SHFL
Best Plays:
1) ATCO: Volume is up as it starts off the 50 day EMA.
2) WAG: Ready for another new high.
3) SLM: Ready to head lower on volume.
4) ETN: In trouble below the 50 day EMA.
5) CCRT: Moving higher on volume.
6) FFIV: Tight doji on the 18 day EMA as volume spikes.
NEW PLAYS:
Upside:
Play Date: 01/29/2005
ATCO (American Technology--$9.46; +0.49; no options): Sound reproduction products
http://biz.yahoo.com/p/a/atco.html
STATUS: Breakout test. ATCO surged out of an 8.5 month base in mid-December, surging to 11 on the run. The burst higher was on the news of an army contract. This year is has faded with the market, but its selling has been on low, below average volume, and indication that there is no dumping of the stock, just some profit taking. It held at the 50 day EMA (8.66) on the Monday dump lower and moved laterally above that level the rest of the week. Friday volume bounced as ATCO moved off the 50 day. Excellent money flow is moving higher ahead of the price; excellent relative strength shows the stock is outpacing the market as it tests its move. Looking for some more volume as it continues higher.
Volume: 107.206K Avg Volume: 143.136K
BUY POINT: $9.72 Volume=215K Target=$11.68 Stop=$9.08
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/atco.html
Play Date: 01/29/2005
MER (Merrill Lynch--$58.81; +0.32; optionable): Financial services
http://biz.yahoo.com/p/m/mer.html
STATUS: Cup w/handle. MER is working on the handle to a long 11 month base. It has formed a 7 week handle, coming back to the 50 day EMA (57.72) as it forms the handle. Nice action at this important support level. Volume jumped well above average on the three up sessions that ended last week. It is showing some accumulation, and with strong money flow leading the way it looks ready for a move from here. Relative strength is ready for a breakout as well, a very good sign for the stock to advance from here. Looking at using options to leverage us a nice gain (80%ish at the target).
Volume: 4.732M Avg Volume: 4.076M
BUY POINT: $59.25 Volume=6M Target=$64.42 Stop=$58.11
POSITION: MER DK - Apr. $55c (80 delta)
http://www.investmenthouse.com/ct/mer.html
Play Date: 01/29/2005
WAG (Walgreens--$42.87; +0.73; optionable): Drug stores
http://biz.yahoo.com/p/w/wag.html
After Hours: $43.34
STATUS: Breakout test. Strong break higher to start the year on strong earnings and December sales. It peaked at 43 on the move and came back to test that move, holding the 18 day EMA (41.70), the near support that strong stocks tend to hold after a breakout. It worked laterally along that support last week and then blasted higher Friday on stronger, above average volume. Looking to move in as it clears the recent highs. Using options to leverage our gains.
Volume: 3.567M Avg Volume: 2.74M
BUY POINT: $43.22 Volume=4M Target=$47.38 Stop=$42.05
POSITION: WAG DV - Apr. $42.50c (63 delta)
http://www.investmenthouse.com/ct/wag.html
Downside:
Play Date: 01/29/2005
ETN (Eaton Corp.--$67.00; -0.28; optionable): Fluid power systems, electrical power control, etc.
http://biz.yahoo.com/p/e/etn.html
STATUS: Put. ETN peaked at the end of the year with many stocks then tanked in the subsequent selling. It held the 50 day EMA (67.88) on the first leg lower, but after two weeks of moving along that support it gapped through it two weeks back. It managed a rebound last week, but as it approached the 50 day with a gap higher Friday, it reversed and sold back. Looks ready to roll over and fully test the 200 day SMA (63.51); it turned back up ahead of that point on the last selling. That will post us a nice 40%ish gain.
Volume: 1.554M Avg Volume: 852.818K
BUY POINT: $66.77 Volume=1.3M Target=$63.95 Stop=$67.92
POSITION: ETN ON - Mar. $70p (-70 delta)
http://www.investmenthouse.com/ct/etn.html
Play Date: 01/29/2005
SLM (SLM Corp.--$49.78; -0.97; optionable): Credit services
http://biz.yahoo.com/p/s/slm.html
STATUS: Put. SLM was a market leader through mid-January. It even managed to weather the hard selling at the first of the year. That did not last, however; SLM was just putting off the pain. It tanked hard two weeks back, moving through the 50 day EMA (51.54) on strong trade. A modest latterly move along 50 tried to hold the stock up, but Friday it broke through that level on rising trade. Looking to move in as it continues this next leg. Looking for a 42%ish return down to the target.
Volume: 2.06M Avg Volume: 1.747M
BUY POINT: $49.65 Volume=1.8M Target=$48.05 Stop=$50.55
POSITION: SLM OJ - Mar. $50p (-50 delta)
http://www.investmenthouse.com/ct/slm.html
CONTINUING PLAYS:
Not yet entered:
Play Date: 01/19/2005
AHG (Apria Healthcare Group--$31.93; -0.22; optionable): Home Health Care
http://biz.yahoo.com/p/a/ahg.html
STATUS: 50 day EMA test. AHG is holding at the 50 day EMA (31.64) where it has held the past week on low, below average volume. It gapped out of a 9.5 month cup base in mid-December and rallied to 34. It has since tested that move the past 5 weeks, filling the gap and holding important support at the 50 day EMA. Looking for volume to jump back above average as AHG resumes the breakout move and rallies through the 18 day EMA (32.17).
Volume: 257.7K Avg Volume: 506.909K
BUY POINT: $32.65 Volume=1M Target=$38 Stop=$32.05
POSITION: AHG FZ - June $32.50c (56 delta) &/or Stock
http://www.investmenthouse.com/ct/ahg.html
Play Date: 01/08/2005
CCRT (Compucredit Corp.--$28.36; +1.21; optionable): Credit services
http://biz.yahoo.com/p/c/ccrt.html
STATUS: Breakout test. Volume was up above average Friday as CCRT is on the verge of breaking wide open. Broke out from a nice 12 month cup with handle base in November and is stepping its way higher. Excellent money flow and a relative strength breakout continue to set up the continued breakout move.
Volume: 197.098K Avg Volume: 171.636K
BUY POINT: New: $28.45 (orig. $27.44) Volume=232K Target=$36.15 Stop=$26.11
POSITION: CUE DE - Apr. $25c (71 delta) &/or Stock
http://www.investmenthouse.com/ct/ccrt.html
Play Date: 01/27/2005
CVNS (Covansys--$14.12; -0.1; no options): ITS software
http://biz.yahoo.com/p/c/cvns.html
STATUS: Breakout test. CVNS continues testing the late December break higher, coming back to tap the 50 day EMA (13.77) on the Friday low and then rebounding to close basically flat. Excellent breakout from an 8 month base. Great money flow and relative strength. Has continued to hold up as the market sold off; now it is at the point where it needs to show it has the stuff to continue the breakout.
Volume: 58.802K Avg Volume: 97.636K
BUY POINT: $14.62 Volume=146K Target=$17.55 Stop=$13.68
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/cvns.html
Play Date: 01/25/2005
FFIV (F5 Networks--$47; -0.24; optionable): Internet software and services
http://biz.yahoo.com/p/f/ffiv.html
After Hours: $46.89
STATUS: Breakout test. Nice tight hammer doji Friday on rising, above average volume as FFIV holds the break higher and the 18 day EMA (46.81) all in one. Broke out in late October from a 10 month cup with handle base, rallied to 50, and then tested the 50 day EMA (44.77). Now it looks set for the move higher.
Volume: 1.414M Avg Volume: 1.267M
BUY POINT: $48.32 Volume=1.9M Target=$55 Stop=$46.32
POSITION: FLK DI - Apr. $45c (68 delta) &/or Stock
http://www.investmenthouse.com/ct/ffiv.html
Play Date: 01/20/2005
FSH (Fisher Scientific--$62.3; -0.61; optionable): Wholesale electronics
http://biz.yahoo.com/p/f/fsh.html
STATUS: Breakout test. FSH continues the test of its breakout, losing ground Friday but still holding above its 18 day EMA (62.02). This follows the breakout in December from the 9 month trading range and early 2005 test of that move back to the 50 day EMA (60.45). Still sporting strong money flow, and relative strength is holding up well as FSH holds its ground while the market stumbles. Looking for FSH to hold the 18 day and then a volume move higher. That will be our entry point.
Volume: 898.2K Avg Volume: 1.227M
BUY POINT: $63.65 Volume=1.5M Target=$71 Stop=$61.38
POSITION: FSH FM - June $65c (48 delta) &/or Stock
http://www.investmenthouse.com/ct/fsh.html
Play Date: 01/26/2005
PT (Portugal Telecom--$12.27; +0.01; no options): Foreign telecom
http://biz.yahoo.com/p/p/pt.html
STATUS: Breakout test. Volume shot higher Friday as PT screamed higher a whole penny. It is on the verge of breaking above the recent highs, and thus the high volume is an indication it is going to make the move. It still has to show us the strong move, however, before we enter. To recap: PT broke out from a nicely formed 8.5 month cup with handle base in early November, and rallied up the 18 day EMA as a good breakout stock will do. It needed a rest and came back in the January selling to test and hold the 50 day EMA (11.95). Volume started to jump last week as it came off that important support level. We note it did not breach its 50 day in the selling, a sign of strength a lot of stocks have not shown. Solid 10 to 7 accumulation in the base (10 up price weeks on rising volume to 7 down price weeks on rising volume) has set up the breakout and run. Ready to move in on a further volume move. Relative strength has broken out as well, a good indication that the breakout is a good one.
Volume: 234.6K Avg Volume: 107.227K
BUY POINT: $12.48 Volume=161K Target=$14.98 Stop=$11.97
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/pt.html
Play Date: 01/12/2005
TOO (Too, Inc.--$26.65; -0.38; optionable): Apparel stores
http://biz.yahoo.com/p/t/too.html
STATUS: Breakout test. Continuing to wait for TOO to continue the breakout move. it is getting rather quiet here as it moves over the 18 day EMA (26.39). Low, low volume and a pretty narrow trading range show no sellers and quiet accumulation. Stocks should be quiet before they make their breaks higher. That is what TOO is showing so we are being patient and waiting for the higher volume break above this three week lateral range. To recap: TOO has worked its way through a long two year base, capping off a nice 10 week run from September to early December with a 4 week pullback to the 50 day EMA (25.12) where it spent a couple of weeks to catch its breath. Excellent money flow continues to lead higher. Positive 2 to 1 accumulation in the current short pattern indicates buyers are still moving into the stock.
Volume: 231.4K Avg Volume: 726.09K
BUY POINT: $27.05 Volume=1M Target=$32 Stop=$26.05
POSITION: TOO EX - May $25c (75 delta) &/or Stock
http://www.investmenthouse.com/ct/too.html
Downside:
Play Date: 01/24/2005
CNF (CNF Transportation--$46.8; -0.18; optionable): CNF Transportation
http://biz.yahoo.com/p/c/cnf.html
STATUS: Put. Not yet giving it up, CNF is still below the 50 day EMA (47.32), struggling but not breaking down. CNF peaked at the end of the year. It fell back to the 50 day EMA, moved laterally, and looked to be forming up for a move higher. It collapsed below that support, holding at 46 and rebounding to test the move. Tried to recover on volume Tuesday but failed. Need to see volume hike back up as it falls from this 50 day EMA breakdown test, a.k.a. the kiss goodbye.
Volume: 420.8K Avg Volume: 571.818K
BUY POINT: New: $46.44 (orig. $45.75) Volume=600K Target=$43.72 Stop=$46.32
POSITION: CNF DI - Mar. $45p (-40 delta)
http://www.investmenthouse.com/ct/cnf.html
Play Date: 01/26/2005
KMRT (Kmart Holding--$93.94; -0.41; optionable): Variety stores and Sears
http://biz.yahoo.com/p/k/kmrt.html
After Hours: $94.20
STATUS: Put. KMRT rallied on some solid Sears earnings Thursday. Despite the news volume was lackluster, still below average as KMRT moved back up toward the 50 day EMA (95.58) following its January slide lower below that level. The selling was rough last Monday but rebounded after that high volume drop. Friday the move ran out of steam as KMRT showed a tight tombstone doji that tapped the 50 day on the high and faded back. Looks ready to roll back over and give us a very nice downside run. We moved up the buy point to accommodate the Thursday bounce and give us more downside to profit from.
Volume: 1.671M Avg Volume: 2.421M
BUY POINT: $92.12 Volume=2.5M Target=$86.45 Stop=$93.72
POSITION: KTQ OR - Mar. $90p (-45 delta)
http://www.investmenthouse.com/ct/kmrt.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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