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Begin part 3 of 3
THE PLAYS
Good movers: FLSH; PLLL; SOSA; VIVO
Best Plays:
1) QSII: A market leader that is just about ready.
2) CYBX: Volume is rising as CYBX moves off of the 50 day EMA toward a new all-time high.
3) RIG: Volume is surging as RIG starts to resume the breakout.
4) PMTI: Nice, nice base. The quiet before storm.
5) KERX: Nice breakout test looks to be over.
NEW PLAYS:
Upside:
Play Date: 07/25/2005
CYBX (Cybertronics--$44.07; +1.55; optionable): Medical appliances
http://biz.yahoo.com/p/c/cybx.html
After Hours: $44.05
Earnings: Early August.
STATUS: Cup w/handle. CYBX is coming off the 50 day EMA (41.79) that has acted as a support level for the 5 week handle where the stock is shaking out the last sellers. This is part 16 week base that has formed using the 50 day EMA as support. The base has set up right at an all-time high. Solid above average volume Monday as CYBX jumped off of the 50 day EMA. Looking at aggressive positions on a move through 45 (partial position), and then again on a breakout over 46.
Volume: 1.182M Avg Volume: 889.777K
BUY POINT: Aggressive: 45.05; Breakout: $46.05 Volume=1.2M Target=$52.95 Stop=$44.65
POSITION: QAJ JI - Oct. $45c (50 delta) &/or Stock
http://www.investmenthouse.com/ct/cybx.html
Play Date: 07/25/2005
QSII (Quality Systems--$53.10; +1.31; optionable): Healthcare information services
http://biz.yahoo.com/p/q/qsii.html
After Hours: $54.19
Earnings: Announced 6-13-05.
STATUS: Cup w/handle. Split in late May and continued to rally on up to 60 to start June. That is when it peaked and needed to take a breather. The current 7 week base is giving it that rest, and QSII is now forming its handle, the lateral move after rally off the pattern lows, using the 50 day EMA (51.06) as support. That is a key level as companies tend to move into the stock at that point to accumulate more positions. They have been doing that as accumulation in the base is a solid 4 to 2 (4 up price weeks on rising volume to 2 down price weeks on rising volume), setting the foundation for the breakout move. Sharp volume Friday as QSII sold below the 50 day and then rebounded to hold that level. That shows buyers moving in to buy it as it dipped. That is often the final shakeout before the breakout. Looking for more of that volume as it moves up through the buy point. A solid market leader with a good technical position and strong earnings and sales growth.
Volume: 280.119K Avg Volume: 402.875K
BUY POINT: $55.38 Volume=604K Target=$63.95 Stop=$52.65
POSITION: QCR LK - Dec. $55c (50 delta) &/or Stock
http://www.investmenthouse.com/ct/qsii.html
Play Date: 07/25/2005
RIG (Transocean--$58.27; -0.4; optionable): Oil and gas drilling and exploration
http://biz.yahoo.com/p/r/rig.html
After Hours: $58.47
STATUS: Breakout test. Volume has surged the past two sessions as RIG moved higher, resuming the breakout after a 5 week lateral trading range from 54 to 58. This followed the breakout from a 9 week double bottom with handle. Strong 5 to 2 accumulation in the pattern shows plenty of buying, setting up the breakout and the subsequent run. After this nice lateral trading range, the volume break higher Friday shows the buyers are back in. Looking for continued volume as RIG moves higher, following its strong money flow.
Volume: 5.967M Avg Volume: 4.308M
BUY POINT: $58.75 Volume=4.6M Target=$66.44 Stop=$56.35
POSITION: RIG KK - Nov. $55c (67 delta) &/or Stock
http://www.investmenthouse.com/ct/rig.html
Play Date: 07/25/2005
SKS (Saks Holdings--$19.61; -0.06; optionable): High end department stores
http://biz.yahoo.com/p/s/sks.html
STATUS: Breakout test. SKS broke out from a 12 week base in late June on speculation it would sell part of its stores. Nice base that formed using the 50 day EMA (18.57) as support, telling us that the big money was staying with the stock, buying it as it tested this key support level. After the breakout SKS ran to 21 and then came back for the test, a nice lower volume jobber to the 18 day EMA (19.49). Solid money flow is leading the way higher, and after this test we look for SKS to follow it. Lots of speculation as to whether the entire company will be bought ala NMGA. Good pattern nonetheless, and as volume surges on a move off the 18 day we will look to enter.
Volume: 956.5K Avg Volume: 1.668M
BUY POINT: $19.95 Volume=1.8M Target=$22.95 Stop=$19.28
POSITION: SKS KW - Nov. $17.50c (65 delta) &/or Stock
http://www.investmenthouse.com/ct/sks.html
Downside:
Play Date: 07/25/2005
FDX (Federal Express--$83.90; -1.20; optionable): Delivery
http://biz.yahoo.com/p/f/fdx.html
STATUS: Put. Taking another look at this stock as it rallied up to eh 50 day EMA (85.36) last week on volume but once more it stalled at this key level. Monday it turned down on rising volume. It looks ready to continue the downtrend that started after FDX peaked in March. A move to the target gains us 45%ish.
Volume: 1.998M Avg Volume: 2.07M
BUY POINT: $83.68 Volume=2.2M Target=$80.05 Stop=$84.11
POSITION: FDX UQ - Sept. $85p (-54 delta)
http://www.investmenthouse.com/ct/fdx.html
CONTINUING PLAYS
New buy point:
Play Date: 07/15/2005
KERX (Keryx Biopharmaceuticals--$16.04; +0.05; optionable): Drugs
http://biz.yahoo.com/p/k/kerx.html
STATUS: Breakout test. The pullback to test the 10 day EMA (15.61) looks just about over as KERX makes a full test of the breakout just over a week ago. Nice 6 month cup base set up the move, and after this test it looks ready to continue higher as money flow surges higher ahead of the stock.
Volume: 346.237K Avg Volume: 535.812K
BUY POINT: New: $16.32 (orig. $15.78) Volume=650K Target=$18.45 Stop=$15.95
POSITION: QKY LC - Dec. $15c (72 delta) &/or Stock
http://www.investmenthouse.com/ct/kerx.html
Upside:
Not yet entered:
Play Date: 07/23/2005
FSH (Fisher Scientific--$64.6; -0.24; optionable): Services and products to global pharma, laboratory markets
http://biz.yahoo.com/p/f/fsh.html
Earnings: 8-3-05 after the close
STATUS: Cup w/handle. Still working on the handle, holding above the 18 day EMA (64.30) on continued below average volume. Setting up for the move, and just being patient to let it show us the move. To recap: FSH continues to work laterally the past 6 weeks, forming the handle to its 6 month base. Excellent 8 to 4 accumulation (8 up price weeks on rising volume to 4 down price weeks on rising volume) shows plenty of buying during the pattern. Once this shakeout in the handle is over and the short term profit takers are gone it will be set to make the breakout to another all-time high. Excellent stock with great technical and fundamental underpinnings.
Volume: 530.4K Avg Volume: 961.386K
BUY POINT: $65.34 Volume=1.4M Target=$72.97 Stop=$64.05
POSITION: FSH LM - Dec. $65c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/fsh.html
Play Date: 07/20/2005
PMTI (Palomar Medical Tech--$27.46; -0.09; optionable): Medical Appliances
http://biz.yahoo.com/p/p/pmti.html
Earnings: 7-28-05
STATUS: Cup w/handle. Low, low volume as PMTI continues its lateral move above the 10 day EMA (26.87), setting up the handle to its base. This is where the last sellers get frustrated and get out. Once they are gone PMTI is ready to show us the breakout. Just waiting for that break higher on volume. To recap: Still working laterally, forming the handle as the 10 day EMA has risen to meet it. Indeed, that pushed PMTI higher Friday though volume was not strong with the price. Still looks solid and ready to go. To recap: A tight two week lateral move has set up the handle to a 19 week base that is ready to send PMTI to an 8 year high. Tried to make the move Tuesday with a high volume surge but could not hold the gain. Positive 4 to 3 accumulation shows net buying, setting the stage for the breakout. Looking for volume to return as it makes the next break higher.
Volume: 93.767K Avg Volume: 247.216K
BUY POINT: $27.95 Volume=390K Target=$32 Stop=$26.34
POSITION: HKQ KE - Nov. $25c (65 delta) &/or Stock
http://www.investmenthouse.com/ct/pmti.html
Play Date: 07/14/2005
SONO (Sonosite--$33.41; -0.29; optionable): Medical instruments
http://biz.yahoo.com/p/s/sono.html
After Hours: $33.45
Earnings: 7-28-05 after the close
STATUS: Breakout test. Still working laterally over the 18 day EMA (33.24) on low volume, trying to set up the next move higher as it consolidates the early July move off the 50 day EMA (32.03). Just being patient and letting it make this lateral move and then show us the break higher. To recap: SONO broke out in early July, moving out of its 7 month reverse head and shoulders base. It rallied to 35 on the move and has faded back the past three sessions on lower and lower below average volume, holding the 18 day EMA on the close. Great position to continue the move higher. Strong 7 to 4 accumulation in the base set up the breakout, and this test gives us a good entry point when the stock starts back up on rising volume.
Volume: 48.635K Avg Volume: 117.461K
BUY POINT: $34.45 Volume=175K Target=$38.55 Stop=$32.98
POSITION: UZS LG - Dec. $35c (48 delta) &/or Stock
http://www.investmenthouse.com/ct/sono.html
Play Date: 07/20/2005
SVNT (Savient Pharma--$4.32; -0.17; no options): Biotechnology
http://biz.yahoo.com/p/s/svnt.html
Earnings: Early August
STATUS: Breakout test. Dipped to the 18 day EMA (4.32) on the close on very low volume as SVNT continues its lateral move below 4.50, testing the strong break higher from early June. This looks as if it is making the final shakeout where it looks as if it is going to fade but then once the last sellers are gone it makes the break higher. Being patient and waiting for it to show us the move that continues the breakout. To recap: SVNT broke out in early June, moving out of a 18 week base that it formed as it came off the bottom of its long decline. Excellent 6 to 1 accumulation in the base (6 up price weeks on rising volume to 1 down price weeks on rising volume) set up the move. It broke out and rallied up the 10 day EMA (4.39) and came back the past two weeks to the 18 day EMA (4.31), moving laterally below some resistance at 4.50. Money flow is moving higher ahead of the price and volume is creeping up to average. It is building pressure for the breakout.
Volume: 234.932K Avg Volume: 657.797K
BUY POINT: $4.58 Volume=981K Target=$5.49 Stop=$4.26
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/svnt.html
Play Date: 07/23/2005
UBET (Youbet.com--$5.64; -0.08; no options): Online pari-mutuel horse wagering.
http://biz.yahoo.com/p/u/ubet.html
Earnings: 8-4-05
STATUS: Cup w/handle. Low, low volume pullback continues, holding above the 18 day EMA (5.55) as UBET puts some finishing touches on the handle to its base. This is just the action you want, the quiet before the storm where the last sellers are shaken out in frustration and then the stock bolts higher. To recap: UBET is working on a two week handle to an 11 week base. Used the 200 day SMA (4.84) as support, an important point where the bigger money either holds a stocks or sells it off. It held, and the strong 4 to 1 accumulation shows there was indeed plenty of buying ongoing during the test and the base. Solid money flow is another indication of the buying. Nice low volume handle is setting up the next move. Want to see the volume run back in as UBET moves through the buy point.
Volume: 78.794K Avg Volume: 376.309K
BUY POINT: $6.05 Volume=564K Target=$7.32 Stop=$5.63
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/ubet.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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