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Begin part 3 of 3
THE PLAYS
Good movers Wednesday: AAPL; ATCO; BDX; DDDC; HOLX; ILMN; JJZ; TTEC; WGAT
Best Plays:
1) CVC: A very nice test of the breakout has set up the next move.
2) DP: Rebounding off the 50 day EMA on stronger volume.
3) BC: Has made the test of the 50 day EMA breakdown and is ready to fall again.
4) CHTT: Very nice pattern.
5) FFIV: Nice doji over the 50 day EMA.
NEW PLAYS:
Upside:
Play Date: 02/02/2005
CVC (Cablevision Systems--$27.94; +0.41; optionable): Cable television systems
http://biz.yahoo.com/p/c/cvc.html
STATUS: Breakout test. CVC exploded higher in mid-January, blasting out of a 13 month cup with handle base. It rallied to almost 30 and then has tested that move the past two weeks, coming back to and holding the 10 day EMA (27.31) on lower volume, an indication that there were few sellers compared to the buying. Solid 10 to 7 accumulation (10 up price weeks on rising volume to 7 down price weeks on rising volume) in the base set the foundation for the breakout. It has done that and now is setting up to continue that run. Money flow is very strong and running higher ahead of the price. Looking to pick it up as it continues higher from here on stronger volume.
Volume: 1.5M Avg Volume: 1.716M
BUY POINT: $28.07 Volume=2M Target=$33 Stop=$27.19
POSITION: CVC FE - June $25c (79 delta) &/or Stock
http://www.investmenthouse.com/ct/cvc.html
Play Date: 02/02/2005
DP (Diagnostic Products--$53.12; +0.89; optionable): Diagnostic substances
http://biz.yahoo.com/p/d/dp.html
STATUS: Test 50 day EMA. Volume was up sharply Wednesday as DP continued the move off the 50 day EMA (50.59), gaining some strength as it continued the move. DP broke out from a 10 month cup with handle base in early December and rallied to 56. It has come back to test that move in the January selling, but its has held at the 50 day. Got a bit dicey at the end of January and then rebounded on some strong volume, moving right back up over the 50 day. A solid leader in a nice pattern and moving back toward another new high. Looking to move in on a further volume rise.
Volume: 174.9K Avg Volume: 104.727K
BUY POINT: $53.25 Volume=150K Target=$60 Stop=$51.42
POSITION: DP FJ - June $50c (70 delta) &/or Stock
http://www.investmenthouse.com/ct/dp.html
Play Date: 02/02/2005
TXI (Texas Industries--$64.17; +0.30; optionable): Steel and iron
http://biz.yahoo.com/p/t/txi.html
STATUS: Ascending triangle. TXI last split in 1997, but it was right at this price, and after this hellacious two year run it is ready to announce a split. Either way, it is in a nice 8 week triangle that has used the 50 day EMA (60.39) to build higher and higher lows above a constant top near 65. Volume has jumped 2 of the past 3 sessions on up days, very good price/volume action as it moves toward the end of the pattern. Positive 3 to 2 accumulation in the pattern has set up the breakout. Strong money flow and relative strength ready to make a breakout along with the stock, a good corroboration of any move. Breakouts from these patterns can be very explosive. Playing this with options to leverage our gain. The target is initial, and we will size it up when it gets there.
Volume: 518.6K Avg Volume: 244.363K
BUY POINT: $64.88 Volume=400K Target=$71.88 Stop=$62.92
POSITION: TXI DM - Apr. $65c (48 delta)
http://www.investmenthouse.com/ct/txi.html
Downside:
Play Date: 02/02/2005
BC (Brunswick--$45.95; -0.45; optionable): Pool tables, Mercury outboards, etc.
http://biz.yahoo.com/p/b/bc.html
STATUS: Put. After a 3 month umbrella top, a distribution pattern, BC gapped through the 50 day EMA (47.36) at the end of January on heavy volume. It has rebounded, but just up to the 10 day EMA (46.55) and has stalled at the bottom of the 3 month pattern. Wednesday it turned lower on continued strong volume, and it looks ready for a test of the 200 day SMA (43.11) ahead. Want to see continuing strong volume as it continues lower. A move to the target nets us a 55%ish gain.
Volume: 1.173M Avg Volume: 609.318K
BUY POINT: $45.82 Volume=914K Target=$43.65 Stop=$46.65
POSITION: BC OI - Mar. $45p (-38 delta)
http://www.investmenthouse.com/ct/bc.html
Play Date: 02/02/2005
OCR (Omnicare--$31.37; +0.28; optionable): Drug stores
http://biz.yahoo.com/p/o/ocr.html
STATUS: Put. In a continuing downtrend below the 200 day SMA (33.87) that started after OCR peaked in February and March 2004. After a major drop in July it moved laterally for 3 months and then rallied up to the 200 day SMA. It failed to break that level and has made two drops and two rebounds. These past two weeks it has rebounded up toward the 50 day EMA (31.87) on very low volume. Weak money flow and still under heavy distribution. Looking for it to roll over here on stronger volume to move in. Looking for a 40%ish gain down to the target.
Volume: 657.7K Avg Volume: 932.545K
BUY POINT: $31.22 Volume=950K Target=$29.18 Stop=$31.55
POSITION: OCR OZ - Mar. $32.50p (-56 delta)
http://www.investmenthouse.com/ct/ocr.html
CONTINUING PLAYS:
Not yet entered:
Play Date: 01/19/2005
AHG (Apria Healthcare Group--$33.10; +0.12; optionable): Home Health Care
http://biz.yahoo.com/p/a/ahg.html
STATUS: 50 day EMA test. Volume jumped Tuesday as AHG continued the move off the 50 day EMA (31.79), and it looked as if AHG was ready to really move higher. Wednesday trade faded back to well below average as AHG held steady. Solid money flow and relative strength is still ready to make the breakout. Needs more volume as it continues the move. To recap: AHG 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.
Volume: 298.2K Avg Volume: 506.909K
BUY POINT: New: $33.35 (orig. $32.65) Volume=1M Target=$39 Stop=$32.05
POSITION: AHG FZ - June $32.50c (56 delta) &/or Stock
http://www.investmenthouse.com/ct/ahg.html
Play Date: 01/24/2005
CHTT (Chattem--$36.00; 0.00; optionable): Drugs
http://biz.yahoo.com/p/c/chtt.html
After Hours: $35.97
STATUS: Cup w/handle. CHTT continues to move laterally the past week, holding over the 10 day EMA (35.41) on lower, below average volume. It is putting the finishing touches on its short but nice 9 week base sporting solid 3 to 1 accumulation. Solid money flow. Relative strength is ready to breakout with the stock, a very good indication of the stock's strength. Nice leader. Just need to see that volume surge with a breakout move.
Volume: 113.247K Avg Volume: 166.09K
BUY POINT: $36.28 Volume=250K Target=$40.55 Stop=$34.72
POSITION: HQT FG - June $35c (58 delta) &/or Stock
http://www.investmenthouse.com/ct/chtt.html
Play Date: 01/27/2005
CVNS (Covansys--$14.31; -0.09; no options): ITS software
http://biz.yahoo.com/p/c/cvns.html
STATUS: Breakout test. Volume shot even higher Tuesday, but Wednesday when CVNS gapped a bit higher, volume was not there. It faded back and closed at the 18 day EMA. It is still making the 5 week pullback to test the late December breakout. Very nice, orderly pullback to test the move, and it is setting up well to continue. It just needs to show us that strong volume as it makes a breakaway move through the buy point. To recap: CVNS is testing the late December break higher, coming back to tap the 50 day EMA (13.84) on the Friday low and then rebounding to close basically flat. Excellent breakout from an 8 month base. Great money flow and relative strength. Held up during the market sell off and it looks ready.
Volume: 78.022K 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--$46.71; +0.05; optionable): Internet software and services
http://biz.yahoo.com/p/f/ffiv.html
STATUS: Breakout test. Has come back to hold just over the 50 day EMA (45.03) after a strong move higher in mid-January when FFIV tried to continue the breakout move that started back in late October. FFIV broke out from a 10 month cup with handle base to end that month and rallied to 50. It tested the 50 day and rebounded on strong trade. It stalled and faded back on lower volume. Now it has made the test again and looks ready to move again. Strong money flow leading higher and a relative strength breakout on the last move. Solid, but needs to show us the next break higher on volume.
Volume: 967.464K 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--$62.8; -0.4; optionable): Wholesale electronics
http://biz.yahoo.com/p/f/fsh.html
STATUS: Breakout test. FSH continues to move in a narrowing range the past two weeks, holding over the 18 day EMA (62.31) on low volume. That shows no one is selling it as the stock consolidates the second bounce higher after the December breakout from its 8.5 month flat base. Excellent money flow. Solid relative strength. It is setting up for the next move; we just have to be patient and wait for the volume to spike as it moves through the buy point.
Volume: 843.1K 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
Downside:
Play Date: 01/29/2005
ETN (Eaton Corp.--$67.9; +0.1; optionable): Fluid power systems, electrical power control, etc.
http://biz.yahoo.com/p/e/etn.html
STATUS: Put. ETN continues to struggle at the 50 day EMA (67.89) after two weeks of rebounding from the strong volume break through the 50 day mid-January. That was the second leg lower since ETN peaked in late December. Money flow is still in the tank and the stock is still under distribution. Showed a doji Wednesday, a hanging man doji; the name says it all. Looking for ETN is ready to turn lower and move toward the 200 day SMA (63.64) for a 40%ish gain.
Volume: 1.323M Avg Volume: 852.818K
BUY POINT: New: $67.12 (orig. $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
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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