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Begin part 3 of 3
THE PLAYS
Thursday night play results:
AMGN: Nice handle still forming at the 10 day EMA.
ASTM: Gapped higher but closed lower so we did not chase it.
PLCE: Took the day off on lower volume as it continues to work in its handle.
New Plays:
Upside:
Play Date: 05/21/2005
BAX (Baxter Intl.--$37.07; +0.07; optionable): Medical instruments
http://biz.yahoo.com/p/b/bax.html
STATUS: Breakout test. BAX has eased back to the 18 day EMA (36.99) in a very nice, tight range. This follow the strong surge in mid-April and run up to 38. A nice breakout from a 14 week flat base sporting excellent 5 to 2 accumulation (5 up price weeks on rising volume to 2 down price weeks on rising volume) set up the breakout and run higher. This is the first real test of that move, and we anticipate it is going to use the 18 day EMA as support and rebound from here to continue the run higher, following the strong money flow. Ready to breakout to a new 2.5 year high.
Volume: 1.678M Avg Volume: 2.295M
BUY POINT: $37.35 Volume=3M Target=$42 Stop=$36.75
POSITION: BAX KU - Nov. $37.50c (55 delta) &/or Stock
http://www.investmenthouse.com/cd/bax.html
Play Date: 05/21/2005
CCI (Crown Castle Intl.--$16.95; -0.25; optionable): Telecom
http://biz.yahoo.com/p/c/cci.html
STATUS: Cup w/handle. Volume started higher Wednesday, as CCI started toward the breakout point from its 19 week base that formed using the 200 day SMA (15.88). Great, stupendous 8 to 1 accumulation in the base (8 up price weeks on rising volume to 1 down price weeks on rising volume); lots of buying during the base. That rising volume to end the week has us looking for the breakout this week as CCI follows the solid money flow higher.
Volume: 725.4K Avg Volume: 1.052M
BUY POINT: $17.36 Volume=1.6M Target=$20 Stop=$16.69
POSITION: CCI JW - Oct. $17.50c (54 delta) &/or Stock
http://www.investmenthouse.com/cd/cci.html
Play Date: 05/21/2005
CYH (Community Health Systems--$36.24; -0.15; optionable): Hospitals
http://biz.yahoo.com/p/c/cyh.html
STATUS: Ascending triangle. CYH broke out from a 13 month cup with handle base in January and then rallied up the 18 day EMA (35.88) through March. That pretty much took the wind out of it, and CYH needed a breather. It has formed another base, an 8 week triangle, building along the 50 day EMA (34.71), using that support at its lows, building the pressure for a breakout. In short it has refused to give back the gains in the run, a bullish sign. Solid 3 to 2 accumulation in the current base shows buyers still buying the stock in the base, setting up the next breakout. Strong money flow to match. A very tight range and making a higher low at the 18 day EMA. Looks ready to make the next move after a good consolidation.
Volume: 340.9K Avg Volume: 891.802K
BUY POINT: $36.65 Volume=1.2M Target=$42 Stop=$35.74
POSITION: CYH IG - Sept. $35c (70 delta) &/or Stock
http://www.investmenthouse.com/cd/cyh.html
Play Date: 05/21/2005
FCN (FTI Consulting--$22.26; -0.23; optionable): Business management services
http://biz.yahoo.com/p/f/fcn.html
STATUS: Breakout test. FCN is moving in a nice tight lateral pattern over the 18 day EMA (21.89), consolidating the late April breakout from its 15 week cup with handle base. Excellent 4 to 1 accumulation in the base shows almost all buying. After volume backed off during the most of this lateral consolidation it started higher toward the end of last week as FCN moved off the 18 day EMA (21.89). With money flow continuing to move higher we are looking for a break higher to provide us a nice gain.
Volume: 242.6K Avg Volume: 310.21K
BUY POINT: $22.55 Volume=465K Target=$25.75 Stop=$21.78
POSITION: FCN IX - Sept. $22.50c (61 delta) &/or Stock
http://www.investmenthouse.com/cd/fcn.html
Play Date: 05/21/2005
GLW (Corning--$14.70; -0.12; optionable): Telecom equipment
http://biz.yahoo.com/p/g/glw.html
After Hours: $14.70
STATUS: Breakout test. GLW is one of the few techs from the boom that is getting up off the mat and showing some real improvement in its earnings as well as its technical pattern. It formed a 16 month base that finally yielded a breakout in April. GLW bounced from 13 to 16, and is now taking a breather after that strong move. It tapped the 18 day EMA (14.32) Tuesday and recovered to the 10 day EMA to close out the week. Good test of the breakout and run is setting up the next move. Just waiting for the volume to return as GLW starts the next run.
Volume: 7.762M Avg Volume: 9.54M
BUY POINT: $15.05 Volume=14M Target=$18 Stop=$14.55
POSITION: GLW HC - Aug. $15c (53 delta) &/or Stock
http://www.investmenthouse.com/cd/glw.html
SUBSCRIBER PORTFOLIO: These are stocks subscribers suggest by vote that we put in a portfolio to track and move into the stocks if they perform well. If you have any suggestions for additions or deletions, email us. We don't cover them all each report, just when something interesting is developing.
AAPL, CELG, BLUD, BR, COH, HW, PSYS, RTSX, STN
CELG: Working in a very tight range over the 10 day EMA the past week. Nice recovery and getting ready to break higher.
BLUD: Lower volume Thursday and Friday as BLUD tests the early May highs. Want to see it through that level on strong volume.
BR: Ready to fall back from the 50 day EMA.
SUBSCRIBER WATCHLIST
We continually receive ideas for potential plays from subscribers. Many times they are already on our watchlists, other times not. We always take a look and sometimes find a gem or two, or more. We don't necessarily endorse these, but want to provide a forum for subscribers with ideas that may appeal to other subscribers. We may just put on the ticker or we might describe our thoughts as to why or why not we think it is a buy or sell. This is a way we can all learn a bit more and maybe find a few more candidates to make us some good money.
Upside:
TOL: Forming a handle to an 11 week cup with handle base that formed using the 50 day EMA as support for the cup. It bounced sharply Wednesday on the housing data and then held the gains with two low volume sessions Thursday and Friday. Looks nice but accumulation is very weak at 1 to 5. That makes the sharp bounce on Wednesday look a lot like short covering on good news.
NSM: Working on a 14 month cup with handle, forming the 12 week handle along the 50 day EMA. Volume jumped the past 6 sessions versus the dormant trade preceding it. Looks ready to try a breakout.
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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