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Begin part 3 of 3
THE PLAYS
Best Plays: Lots of great pullbacks
1) WIND: Nice breakout test.
2) KRY: Nice base and volume starting to surge.
3) SIE: Beautiful test.
4) VCI: Nice test of the breakout.
5) CAKE: Excellent test.
6) EW: Excellent test.
7) IDC: Excellent handle has formed.
8) TERN: Set and ready to go again.
NEW PLAYS:
Upside:
Play Date: 03/12/2005
AGYS (Agilsys--$19.46; +0.02; optionable): Wholesale electronics
http://biz.yahoo.com/p/a/agys.html
STATUS: Breakout test. AGYS surged out of a 4.5 month double bottom with handle base in mid-February, surging on strong volume. It peaked at 20 and has made a nice, low volume pullback last week as the rest of the market sold. Very orderly pullback, setting the stage for the next move higher in the breakout run. Strong 6 to 2 accumulation (6 up price weeks on rising volume to 2 down price weeks on rising volume) has set the stage for the breakout and run. Strong money flow leads, and relative strength broke out, a sign of a solid breakout. Looking for volume to resume as it rebounds. We have said it before, the first breakout test is one of our favorite entry points.
Volume: 130.553K Avg Volume: 224.992K
BUY POINT: $19.62 Volume=310K Target=$23 Stop=$19.05
POSITION: OQJ GD - July $20c (49 delta) &/or Stock
http://www.investmenthouse.com/ct/agys.html
Play Date: 03/12/2005
KRY (Crystellex Intl.--$3.93; +0.13; no options): Gold
http://biz.yahoo.com/p/k/kry.html
STATUS: Cup w/handle. Volume jumped back above average Friday as KRY moved off of its 10 day EMA (3.74) test, part of the handle to its 16 week base. It has shown very good volume this month as it moved up to finish the right side of the pattern and then started the test last week to form the handle and shake out the last sellers. Positive accumulation in the base and strong money flow is leading higher even as it made this slightly pullback. Good action as it used the 200 day SMA (3.10) as the very bottom of the base and bounced smartly off that level, touching it intraday just one session. May take a couple more sessions to complete the handle, but with the Friday volume we want to be ready.
Volume: 691.3K Avg Volume: 501.09K
BUY POINT: $4.05 Volume=715K Target=$5.06 Stop=$3.84
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/kry.html
Play Date: 03/12/2005
SIE (Sierra Health Services--$61.60; -0.05; optionable): Health care plans
http://biz.yahoo.com/p/s/sie.html
STATUS: Test 18 day EMA. SIE broke out from a 10 week double bottom base in late February, rallying to 65. In the market selling last week it has come back to test the move on very low, below average volume. Friday it held the 18 day EMA (61.32) with a nice hammer doji. That often indicates the pullback is over. Ready to move into this leader as it resumes the move higher on average or better volume.
Volume: 148.9K Avg Volume: 336.727K
BUY POINT: $62.25 Volume=400K Target=$69.95 Stop=$61.05
POSITION: SIE IL - Sept. $60c (63 delta) &/or Stock
http://www.investmenthouse.com/ct/sie.html
Play Date: 03/12/2005
VCI (Valassis Communications--$36.76; +0.22; optionable): Marketing services for manufacturers, direct marketers, retailers and franchisees.
http://biz.yahoo.com/p/v/vci.html
STATUS: Breakout test. VCI broke out in late February from a 14 week flat base, surging off the 50 day EMA (35.34) on very strong trade, rallying to 38 on continued solid volume. As with many leaders, it used last week's selling to test that move, pulling back to the 18 day EMA (36.39) on lower, below average volume. Strong 5 to 2 accumulation in the base shows solid net buying and has set up the breakout and the subsequent run. After this pullback it will be ready to resume the move, and we will step in when it does on average or better volume. Strong money flow is leading the way and relative strength broke out on the move, a good corroboration of the breakout.
Volume: 183.3K Avg Volume: 337.331K
BUY POINT: $37.05 Volume=475K Target=$42 Stop=$36.18
POSITION: VCI FG - June $35c (82 delta) &/or Stock
http://www.investmenthouse.com/ct/vci.html
Play Date: 03/12/2005
WIND (Wind River Systems--$14.98; -0.17; optionable): Business software integration
http://biz.yahoo.com/p/w/wind.html
STATUS: Breakout test. WIND surged to start march, blasting out of a 14 week double bottom with handle base, showing some tremendous volume as it made the move. it rallied from 14 to 16 in short order on continued solid trade. Last week in the market selling it started testing that move, coming back to tap intraday at the 18 day EMA (14.68) on the Friday low and snapping back. Volume was very low on the test, indicating very little selling of positions taken on the breakout move. The first test of a breakout is one of our favorite entry points, and we are ready to move in on an above average volume rebound through the buy point. Accumulation in the base is a solid 4 to 2, and money flow is surging ahead of price. Relative strength broke out on the breakout move, a good corroboration. Looks nice.
Volume: 648.693K Avg Volume: 724.318K
BUY POINT: $15.32 Volume=900K Target=$18 Stop=$14.55
POSITION: QWV HC - Aug. $15c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/wind.html
CONTINUING PLAYS:
Not yet entered:
Play Date: 02/26/2005
CAKE (Cheesecake Factory--$34.25; -0.09; optionable): Restaurants
http://biz.yahoo.com/p/c/cake.html
STATUS: Ascending base. CAKE has formed a 5 week ascending pattern that is acting as a consolidation of the breakout from an 11 month cup with handle base. It gapped higher out of that base and into the current rising pattern. It is now trying to make a higher low over the 18 day EMA (33.99), showing a hammer doji Friday. Looking for volume to surge back in as it makes the move through the buy point.
Volume: 333.256K Avg Volume: 590.5K
BUY POINT: $34.88 Volume=650K Target=$39 Stop=$33.87
POSITION: CZK GX - July $33.38c (66 delta) &/or Stock
http://www.investmenthouse.com/ct/cake.html
Play Date: 03/07/2005
CMCSA (Comcast--$33.27; -0.36; optionable): Cable TV
http://biz.yahoo.com/p/c/cmcsa.html
After Hours: $33.16
STATUS: Cup w/handle. Slid back to the 10 day EMA (33.19) Friday on lower, below average volume after trying to make the breakout in a weak market, but having to fall back as the market was not helping. This nice pullback sets up a run for the breakout. To recap: CMCSA has formed a big 14 month base, one that is very easy to pick out with its smooth cup and 10 week handle formed over the 50 day EMA (32.40). A stronger volume push through the top of the handle (the lateral move where the last sellers get frustrated and exit) is where we step in. Strong 17 to 9 accumulation in the base shows plenty of net buyers.
Volume: 7.351M Avg Volume: 7.403M
BUY POINT: New: $33.95 (orig. $33.72) Volume=10M Target=$38 Stop=$32.48
POSITION: CCQ GZ - July $32.50c (68 delta)
http://www.investmenthouse.com/ct/cmcsa.html
Play Date: 02/26/2005
COHR (Coherent--$30.52; +0.1; optionable): Lasers, laser based systems, precision optics
http://biz.yahoo.com/p/c/cohr.html
STATUS: Double bottom w/handle. Continuing the lateral move over the 18 day EMA (30.28) with volume backing off to below average Friday after a couple of strong sessions Wednesday and Thursday where it banged its head at the resistance at 31. Showing very good strength as the rest of the market sold. To recap: COHR is working on its second base after coming off the bottom of a long, long 5 year correction. The current 13 month pattern is nicely formed with the right leg dipping below the left and the handle holding the 50 day EMA (29.83). The 50 day EMA is a good point to hold as it is a key institutional level; now that COHR has recovered it in the base it is holding it. Good low volume in the handle is the action you want to see as it shows very few sellers as the stock fades slightly. Strong 13 to 7 accumulation in the base shows solid net buying during the base and is setting the foundation for the breakout. Money flow remains strong.
Volume: 121.359K Avg Volume: 152.363K
BUY POINT: $31.05 Volume=238K Target=$36.88 Stop=$29.55
POSITION: HRQ HF - Aug. $30c (58 delta) &/or Stock
http://www.investmenthouse.com/ct/cohr.html
Play Date: 03/09/2005
EW (Edwards Life Sciences--$43.42; -0.01; optionable): Medical appliances
http://biz.yahoo.com/p/e/ew.html
STATUS: Breakout test. Another very nice tight doji over the 10 day EMA (43.29) as EW continues the excellent breakout test from its earlier base. It refused to back off as the market sold, a very good sign of strength. To recap: EW is a leader, coming back to test the recent move higher out of an 11 week cup with handle base sporting outstanding 4 to 0 accumulation (4 up price weeks on rising volume to 0 down price weeks on rising volume). That shows a lot of buyers still wanting to own the stock even at these all-time high levels. Lots of happy shareholders as opposed to those with latent hostilities ready to take it out on the stock. Super money flow is leading higher. Relative strength broke out on the breakout move and remains strong, ready to go again. That shows strength in the breakout move. Looking for volume to turn back up as EW resumes its run higher.
Volume: 314.5K Avg Volume: 403.954K
BUY POINT: $44.08 Volume=600K Target=$50 Stop=$42.65
POSITION: EW HI - Aug. $45c (43. delta) &/or Stock
http://www.investmenthouse.com/ct/ew.html
Play Date: 03/10/2005
IDC (Interactive Data Corp.--$21.18; +0.06; no options): Information and delivery software
http://biz.yahoo.com/p/i/idc.html
STATUS: Double bottom w/handle. IDC continues its very nice handle formation, holding over the 50 day EMA (20.97) on very low trade. It showed a nice tight doji on the candlestick chart Friday, often the predecessor to a move higher. A very nice pattern. To recap: IDC has used this market selling to make a nice easy test of the 50 day EMA, forming the handle to its 11 week base. Solid 3 to 1 accumulation in the pattern and strong, rising money flow show plenty of buying in the base, setting up the breakout move. IDC looks ready to challenge its all-time high on this breakout.
Volume: 100.4K Avg Volume: 127.909K
BUY POINT: $21.82 Volume=200K Target=$25 Stop=$20.88
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/idc.html
Play Date: 03/08/2005
PSTI (Per-Se Technologies--$15.40; -0.13; optionable): Services to improve efficiency of healthcare industry
http://biz.yahoo.com/p/p/psti.html
STATUS: Cup w/handle. Another stock showing a nice tight doji on the 18 day EMA (15.43) as it puts the finishing touches on the handle to its pattern. In the market selling it went about its own business and finished its base; that shows strength, and when the selling pressure lifts it will be one of the stocks popping higher. To recap: PSTI has formed a short 12 week pattern over the 200 day SMA (14.23), an important institutional support level. This is part of a much larger 17 month pattern. Accumulation in the latter portion of this pattern is positive at 3 to 2, showing net buyers and setting up the next breakout move. After a strong move to start the month it has drifted back on lower, average volume, closing above the 18 day EMA. Money flow is strong.
Volume: 167.892K Avg Volume: 139.363K
BUY POINT: $16.36 Volume=208K Target=$19 Stop=$15.49
POSITION: MQA FC - June $15c (65 delta) &/or Stock
http://www.investmenthouse.com/ct/psti.html
Play Date: 03/05/2005
STMP (Stamps.com--$16.93; +0.08; optionable): Internet based postage solutions.
http://biz.yahoo.com/p/s/stmp.html
After Hours: $16.94
STATUS: Double bottom w/handle. STMP continues to test the 18 day EMA (16.90) as it forms the handle to its base. Volume is very low as it holds the pattern, setting up the breakout in the face of a selling market. It is setting up for the breakout move. To recap: A nice 6 month base, rallying up in February to form the right side of the base with volume swelling as it made the move. Now a good three week lateral move down to the 18 day EMA on lower volume as it forms the handle where the last sellers are shaken out. Then we look for a high volume run through the buy point. Accumulation in the base is a solid 7 to 4 (7 up price weeks on rising volume to 4 down price weeks on rising volume) shows net buying. Used the 200 day SMA (13.70) as support for the base, an important institutional level. Strong money flow is leading higher. Relative strength is solid.
Volume: 120.138K Avg Volume: 247.045K
BUY POINT: $18.38 Volume=385K Target=$21.98 Stop=$17.27
POSITION: JXQ HW - Aug. $17.50c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/stmp.html
Play Date: 03/09/2005
TERN (Terayon Communication--$3.29; +0.03; optionable): Cable modems, digital video equipment, etc.
http://biz.yahoo.com/p/t/tern.html
After Hours: $3.29
STATUS: 50 day EMA test. Holding up very well at the 10 day EMA (3.26) on very low volume as the market sold back last week. Instead of selling TERN jumped off the 50 day EMA (2.99). A good ending to the week sets it up for the breakout move. To recap: TERN jumped off the 50 day EMA last week as it tries again to continue the move off the bottom of its 18 month base. It broke over the 200 day SMA (2.23) in December and January, and has been using the 50 day EMA since to make its halting advance. It just made a higher low off the 50 day, and that volume as it moved off that support showed money moving in. Indeed, money flow is very strong, moving higher and well out in front of the stock. It eased back to the 50 day on very low volume the past week, showing few sellers. The volume off this level shows the big buyers stepping in. Looking for an even stronger volume session to move in.
Volume: 226.826K Avg Volume: 992.454K
BUY POINT: $3.39 Volume=1.5M Target=$4.25 Stop=$3.17
POSITION: TUN FZ - June $2.50c (91 delta) &/or Stock
http://www.investmenthouse.com/ct/tern.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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top stock pick
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