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Begin part 3 of 3
THE PLAYS
Good movers: FLSH; CTRX; GLW
Best Plays:
1) MMSI: Volume is up as it moves up off the breakout test.
2) ULTI: Nice breakout test getting ready to pop upside.
3) ASPM: Nice doji at the 10 day EMA has set the move.
4) DRIV: Nice 10 day EMA test after the breakout.
5) CVD: Another excellent breakout test ready to move back upside.
NEW PLAYS:
Upside:
Play Date: 08/03/2005
CUTR (Cutera--$21.99; +1.49; no options): Laser and light-based products for aesthetic applications.
http://biz.yahoo.com/p/c/cutr.html
After Hours: $22.47
STATUS: Breakout test. Taking another run at CUTR. It gave us a run into earnings, gapped higher on the excellent results, but then turned over on us. It held the 10 day EMA (20.32) and bounced Wednesday. The 15 week base sports 6 to 4 accumulation (6 up price weeks on rising volume to 4 down price weeks on rising volume), setting up the breakout and run. Now that it has gapped and held the move on the test we will look for positionson the continued move higher.
Volume: 1.435M Avg Volume: 216.406K
BUY POINT: $22.11 Volume=325K Target=$26.25 Stop=$21.22
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/cutr.html
Play Date: 08/03/2005
MMSI (Merit Medical Systems--$17.62; +0.69; optionable): Medical instruments
http://biz.yahoo.com/p/m/mmsi.html
STATUS: Breakout test. After a strong run in 2003, MMSI has spent the past 18 months in a long base. It bottomed in late 2004, bounced, and then formed a very nice 7 month cup with handle base. It broke out in mid-July on a solid volume surge. It rallied to 18 on a strong move and has spent the past three weeks coming back to test the move, holding the 18 day EMA (17) as it made the test. Volume spiked the past two sessions, posting a solid gain Wednesday. Strong volume is leading higher and MMSI looks ready to follow it.
Volume: 445.957K Avg Volume: 160.938K
BUY POINT: $17.74 Volume=235K Target=$20.44 Stop=$16.79
POSITION: RMQ AQ - Jan. $17.50c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/mmsi.html
Play Date: 08/03/2005
TALX (Talx Corp.--$38.43; -0.45; optionable): Automated employment and income verification, etc.
http://biz.yahoo.com/p/t/talx.html
STATUS: Breakout test. Strong run for TALX this year after breaking out in April. It has made two gaps higher, one in early July and then again to start August. It gapped Monday on news of strong earnings and has come back Tuesday and Wednesday on lower volume to test that move. May come all the way back to the 10 day EMA (37.25) to fill the gap and fully test the move higher; that would be the perfect action and a buy as it came back up on stronger volume. It is a strong stock, and we want to be ready if it turns back up from here; it tapped at 38ish on the lows Tuesday and Wednesday and rebounded. Thus it may make that move higher from the Wednesday close. Strong money flow is leading higher and we expect TALX to continue to follow it.
Volume: 452.115K Avg Volume: 251.822K
BUY POINT: $38.65 Volume=400K Target=$44.45 Stop=$37.11
POSITION: TUB LG - Dec. $35c (65 delta) &/or Stock
http://www.investmenthouse.com/ct/talx.html
Play Date: 08/03/2005
ULTI (Ultimate Software--$17.93; +0.18; optionable): Payroll and workforce management solutions
http://biz.yahoo.com/p/u/ulti.html
After Hours: $17.90
STATUS: Breakout test. ULTI jumped out of a 15 week ascending triangle the last week of July with a strong volume surge higher as it reported strong earnings numbers. After that surge it has moved laterally for a couple of weeks, holding over the 10 day EMA (17.74) on the lows as it consolidates. Just being patient and letting it set up and show us the continued breakout move. Outstanding 6 to 1 accumulation in the base has set up the move, and it looks ready to continue following the strong money flow higher.
Volume: 188.206K Avg Volume: 170.998K
BUY POINT: $18.05 Volume=256K Target=$20.88 Stop=$17.61
POSITION: JUL KW - Nov. $17.50c (58 delta) &/or Stock
http://www.investmenthouse.com/ct/ulti.html
CONTINUING PLAYS
Upside:
Not yet entered:
Play Date: 08/01/2005
ASPM (Aspect Medical--$32.59; -0.01; optionable): Medical appliances
http://biz.yahoo.com/p/a/aspm.html
STATUS: Breakout test. Nice doji at the 10 day EMA (32.24) that tapped at the 18 day EMA on the low (31.57) and rebounded. Simply a great pullback to test the breakout move and ready to move in as it rebounds. To recap: Testing last week's breakout from a 7 week triangle that formed using the 50 day EMA (29.92) on the lows. Positive 3 to 2 accumulation in the pattern (3 up price weeks on rising volume to 2 down price weeks on rising volume) shows net buyers in the short base and strong money flow shows the buying. Great breakout on volume Wednesday and then a nice test back. Looking for it to rally off of this doji to continue the breakout.
Volume: 134.214K Avg Volume: 184.743K
BUY POINT: $33.32 Volume=276K Target=$39.45 Stop=$31.89
POSITION: UCU KF - Nov. $30c (68 delta) &/or Stock
http://www.investmenthouse.com/ct/aspm.html
Play Date: 07/30/2005
CVD (Covance--$49.08; -0.42; optionable): Drug development services for the pharma, biotech industries.
http://biz.yahoo.com/p/c/cvd.html
STATUS: Breakout test. Low volume persists as CVD moved laterally, tapping the 18 day EMA (48.59) on the lows. Super action as it shakes out the final sellers and resumes the move back up. Want to see some volume as it makes that move. To recap: Strong volume breakout two weeks back as CVD moved out of its 14 week trading range between 43 and 48. Rallied to 51 and has come back to test and hold the 18 day EMA a good near support level for a strong breakout. Started back up off of that level to end the week with volume rising. Strong 5 to 3 accumulation in the pattern shows net buying. Looking for another new all-time high as CVD resumes the breakout. The first test of a strong breakout is one of our favorite entry points as it shows buyers are ready to buy even at the higher price; that is a sign of strength.
Volume: 306.1K Avg Volume: 385.892K
BUY POINT: $50.05 Volume=400K Target=$56.35 Stop=$48.65
POSITION: CVD KJ - Nov. $50c (52 delta) &/or Stock
http://www.investmenthouse.com/ct/cvd.html
Play Date: 08/02/2005
DRIV (Digital River--$38.89; -0.63; optionable): e-Commerce outsourcing solutions
http://biz.yahoo.com/p/d/driv.html
After Hours: $38.26
STATUS: Breakout test. Tested a bit lower Wednesday, tapping at the 10 day EMA (38.15) on the low and rebounding to recoup some losses. Volume remained low as DRIV tests the breakout, shaking out the quick sellers but holding near support at the 10 day. A full test of the 10 day EMA is good and if it holds from here and rebounds on volume that shows its strength. To recap: Reported some strong earnings last week and gapped higher on strong volume. The move took it out of a 6 month cup with handle base as DRIV is following its strong money flow higher. It is coming back toward the 10 day EMA on lower volume, showing a nice doji with tail Tuesday, recovering to close flat. May come back some more to test the 10 day EMA, but with its strength and early leadership (gapped up ahead of the market) we want to be ready when it starts back up to once more follow that money.
Volume: 1.075M Avg Volume: 1.089M
BUY POINT: $40.04 Volume=1.6M Target=$46 Stop=$37.88
POSITION: DQI LH - Dec. $40c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/driv.html
Play Date: 07/27/2005
PPDI (Pharmaceutical Prodcut Dev.--$57.14; -0.15; optionable): Medical labs
http://biz.yahoo.com/p/p/ppdi.html
Earnings: Released 7-13-05
STATUS: Test breakout. Still in the lateral move along the 10 day EMA (56.98) as PPDI tests the huge breakout in mid-July. Lower and lower volume in a narrow range. Holding its breakout is a sign of strength as no one really ants to sell it as it rests. Being patient and waiting for a volume surge as it moves through the buy point. To recap: PPDI exploded higher 7-13 on news it beat earnings estimates and upped Q3 and Q4. The move broke it out of a 13 week base on some very strong volume. After rallying to 60 it has pulled back the past week to test the 10 day EMA, moving lower on declining volume. Strong money flow has surged ahead of the price and is holding well on the test. Looking for PPDI to turn back up from here and continue the breakout move.
Volume: 310.629K Avg Volume: 367.589K
BUY POINT: $57.38 Volume=547K Target=$64.48 Stop=$56.35
POSITION: PJQ AK - Jan. $55c (62 delta) &/or Stock
http://www.investmenthouse.com/ct/ppdi.html
Play Date: 07/30/2005
RTSX (Radiation Therapy--$27.06; +0.46; no options): Medical practitioners
http://biz.yahoo.com/p/r/rtsx.html
After Hours: $27.45
STATUS: 50 day EMA test. Strong volume Tuesday as RTSX reached down below the 50 day EMA (25.40) but then rebounded to close flat. Volume died off Wednesday as it continued the move; we could have entered but decided to hold off & see if volume would improve once more after that wild Tuesday session. To recap: RTSX broke in mid-June from a 9 week ascending triangle, moving to 28 on the move. It has spent the past three weeks testing that move on lower volume, holding the 50 day EMA the past week. Strong 4 to 1 accumulation in the base set the move. Strong money flow to go along with the great accumulation. Looking for strong volume on a continued rebound off the 50 day as RTSX starts toward another all-time high.
Volume: 101.242K Avg Volume: 209.883K
BUY POINT: $26.39 Volume=250K Target=$31.85 Stop=$25.18
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/rtsx.html
Play Date: 07/23/2005
UBET (Youbet.com--$5.87; +0.2; no options): Pari-mutuel horse race wagering (online)
http://biz.yahoo.com/p/u/ubet.html
Earnings: 8-4-05
After Hours: $5.91
STATUS: Cup w/handle. Volume was back up above average Wednesday as UBET moved off the 50 day EMA (5.46) and toward the breakout from its 13 week base. Solid pattern that formed using the 200 day SMA (4.93) on the lows, a key support level. Earnings are out after hours Thursday, making this an aggressive play going into that result.
Volume: 313.622K Avg Volume: 321.294K
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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