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Begin part 3 of 3
THE PLAYS
Good movers: CCK; CUTR; HCP; TBL
Best Plays:
1) CC: Ready to fall to the 200 day SMA.
2) KERX: Excellent lateral move
3) SYNM: Volume jumps above average as it starts the breakout.
4) CMX: Test looks just about over.
5) CVD: Rising on better volume.
6) VAS: Ready to move off of the 'get ready' spikes last week.
NEW PLAYS:
Upside:
Play Date: 08/20/2005
KERX (Keryx Biopharmaceuticals--$16.54; +0.22; optionable): Drugs
http://biz.yahoo.com/p/k/kerx.html
STATUS: Breakout test. KERX is moving laterally, holding the 18 day EMA (16.24) the past 6 weeks as it tests the mid-July break higher from a 6.5 month base. That base is part of a larger 16 month cup with handle, and this lateral move is the handle to that base. Solid 9 to 4 accumulation in this year's pattern showing plenty of buying. Money flow is surging higher, confirming the accumulation we see. Very nice set up and looking for volume to return (it has been very low and well below average the past three weeks) as KERX moves through the buy point.
Volume: 104.508K Avg Volume: 452.357K
BUY POINT: $16.95 Volume=679K Target=$19.97 Stop=$16.11
POSITION: QKY LC - Dec. $15c (65 delta) &/or Stock
http://www.investmenthouse.com/ct/kerx.html
Play Date: 08/20/2005
SYNM (Syntroleum--$12.26; +1.04; optionable): Synthetic oil (converting natural gas to liquid hydrocarbons)
http://biz.yahoo.com/p/s/synm.html
STATUS: Cup w/handle. SYNM jumped on above average volume Friday as it started toward the breakout from its 5 month base. Solid 4 to 2 accumulation in the base shows net buying, and money flow is rising ahead of price, confirming that accumulation. Looking for a continued move higher to star the play.
Volume: 507.468K Avg Volume: 420.358K
BUY POINT: $12.42 Volume=631K Target=$14.95 Stop=$11.55
POSITION: HYU AV - Jan. $12.50c (53 delta) &/or Stock
http://www.investmenthouse.com/ct/synm.html
Play Date: 08/20/2005
SYKE (Sykes Enterprises--$10.45; +0.02; no options): ITS software
http://biz.yahoo.com/p/s/syke.html
STATUS: Test 18 day EMA (10.37). SYKE broke out from a 19 month reverse head and shoulders base in early May and is making its second test of the 18 day EMA after that breakout. Strong stocks will make 4 to 5 bounces up off the 18 day after moving out of their base; that gives SYKE plenty of more upside on this move. A very nice, orderly pullback the past two weeks has put SYKE on the 18 day, showing a series of dojis to end the week. Strong 19 to 12 accumulation in the base shows net buying and has set up this run. Money flow remains very strong, moving higher even as SYKE makes this test. Looking for a volume jump as SYKE resumes the run higher.
Volume: 188.664K Avg Volume: 272.454K
BUY POINT: $10.68 Volume=409K Target=$12.65 Stop=$10.25
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/syke.html
Downside:
Play Date: 08/20/2005
AVT (Avnet--$23.75; -0.16; optionable): Wholesale electronics
http://biz.yahoo.com/p/a/avt.html
STATUS: Put. A familiar story, i.e. a strong run from the April low but then running out of gas in late July as it matched the April 2004 high. A sharp, high volume move lower through the 50 day EMA (24.05) two weeks back killed that rally, however. Money flow has fallen into the hopper as AVT has tried to move back above the 50 day but is failing. Volume edged higher Friday as AVT fell back some. Looking for a continued rise in volume as AVT falls from the 50 day EMA.
Volume: 513.8K Avg Volume: 938.872K
BUY POINT: $23.61 Volume=950K Target=$22.32 Stop=$24.08
POSITION: AVT UE - Sept. $25p (-69 delta)
http://www.investmenthouse.com/ct/avt.html
Play Date: 08/20/2005
CC (Circuit City--$17.19; -0.14; optionable): Electronics stores
http://biz.yahoo.com/p/c/cc.html
STATUS: Put. CC enjoyed a decent run from May to August, but as it made a new high volume remained below average; fewer buyers having to carry the load, and that often means a reversal. The stock fell to the 50 day EMA (17.47) early in the month, held that support for a week, then broke down through that level last week. A modest, low volume rebound tested the 50 day on the Friday open, but by the close it had turned back down on stronger volume. Looking for CC to continue lower after this failed test of the 50 day EMA, a.k.a. the kiss goodbye. A move to the target gives us a 49%ish gain.
Volume: 1.218M Avg Volume: 1.599M
BUY POINT: $17.08 Volume=1.6M Target=$16.15 Stop=$17.55
POSITION: CC VW - Oct. $17.50p (-60 delta)
http://www.investmenthouse.com/ct/cc.html
CONTINUING PLAYS
Upside:
Not yet entered:
Play Date: 08/15/2005
BRCM (Broadcom--$41.88; +0.6; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/b/brcm.html
STATUS: Flying plateau. Still holding the 18 day EMA (41.77), moving higher Friday as volume edged higher though remained below average. Holding the July gap higher, this is where it needs to make the continued move or fill the gap. Like the strong money flow. To recap: BRCM made us some good money in July, and it is setting up to do so once more. A big gap higher in July on earnings and since then a 3 week lateral move on mostly low, below average volume. A pullback to the 18 day EMA looks like the final shakeout as BRCM. Excellent money flow is leading higher. Ready to move in as BRCM continues its move and clears the recent highs on above average volume. That is our buy point.
Volume: 5.672M Avg Volume: 7.35M
BUY POINT: Aggressive: 42.95; Clear resistance: $43.54 Volume=11M Target=$49.95 Stop=$42.25
POSITION: RCQ KS - Nov. $42.50c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/brcm.html
Play Date: 08/13/2005
CMX (Caremark RX--$46.35; -0.05; optionable): Specialized health services
http://biz.yahoo.com/p/c/cmx.html
STATUS: Breakout test. Tried to make the move Friday, hitting 47.13 on the high but then backing off to close basically flat. A dry run for this week, and it is showing the life we want to see as it heads into the next move higher. To recap: CMX blasted out of a nice little 8 week double bottom with handle base to start August. This base followed directly on the heels of a 15 week trading range in May; a good base on base pattern that really works to weed out the sellers. Strong volume breakout and then a lateral move the past two weeks to tap and test the 18 day EMA on low as volume. Nice test and looking for a strong break higher once more as CMX moves to another new all-time high.
Volume: 1.597M Avg Volume: 2.156M
BUY POINT: $46.35 Volume=2.6M Target=$52.08 Stop=$45.38
POSITION: CMX LI - Dec. $45c (62 delta) &/or Stock
http://www.investmenthouse.com/ct/cmx.html
Play Date: 07/30/2005
CVD (Covance--$50.35; +0.9; optionable): Research services
http://biz.yahoo.com/p/c/cvd.html
STATUS: Breakout test. Volume was higher but still below average Friday as CVD tapped the 18 day EMA (49.23) on the low and rebounded for a solid price gain. We were tempted and may regret it, but we held off given the volume. Ready to move in this week, however, if it continues the move. To recap: CVD continues to move laterally the past three weeks following the breakout from a 14 week double bottom with handle base that formed along the 50 day EMA (48.01). Holding up very well in the weaker market, and we are ready to move in as it shows another good volume session.
Volume: 237.7K Avg Volume: 356.836K
BUY POINT: New: $50.48 (orig. $50.25) Volume=400K Target=$56.95 Stop=$48.68
POSITION: CVD KJ - Nov. $50c (52 delta) &/or Stock
http://www.investmenthouse.com/ct/cvd.html
Play Date: 08/15/2005
FLSH (M-Systems Flash Disk--$25.18; -0.49; optionable): Semiconductors
http://biz.yahoo.com/p/f/flsh.html
STATUS: Double bottom w/handle. Faded to the 18 day EMA (25.15) to end the week, falling on some very low volume after some excellent volume to start the week off. No complaints as this test back works to shake out more sellers and set up the breakout move. Strong money flow contiues higher and we are looking for the breakout soon. To recap: FLSH has already made us some nice money, and now it is ready to do it again. Strong volume Monday as FLSH rallied off the 18 day EMA and broke out from the handle of its 23 week base. Solid pattern that used the 200 day SMA (21.21) as support for the two legs. Strong money flow is leading higher and relative strength broke out as well. Positive accumulation shows net buyers. Making a 5 year new high and ready to move in as it continues the breakout.
Volume: 441.998K Avg Volume: 639.883K
BUY POINT: $26.68 Volume=850K Target=$30.69 Stop=$25.41
POSITION: VUM AE - Jan. $25c (68 delta) &/or Stock
http://www.investmenthouse.com/ct/flsh.html
Play Date: 08/17/2005
MCHP (Microchip--$30.76; -0.16; optionable): Semiconductors
http://biz.yahoo.com/p/m/mchp.html
STATUS: Test 50 day EMA. Another hammer doji Friday on continued low, below average volume as MCHP holds up very well in this test of the strong July move higher that broke it out of its base. Money flow is leading higher and a very nice pullback is setting up the next leg higher. To recap: Broke out from an 8 month double bottom with handle base in early July and rallied near 33. After that move it has come back to test the 50 day EMA (30.70), moving laterally along that level the past two weeks. Money flow continues to move up ahead of the stock as it makes this test; that often means the stock is going to follow it higher. Looking for the volume to return this week as MCHP is getting to that fish or cut bate point.
Volume: 1.011M Avg Volume: 1.568M
BUY POINT: $31.22 Volume=1.7M Target=$35.95 Stop=$30.44
POSITION: QMT AF - Jan. $30c (61 delta) &/or Stock
http://www.investmenthouse.com/ct/mchp.html
Play Date: 08/17/2005
VAS (Viasys Healthcare--$24.67; -0.06; optionable): Medical equipment
http://biz.yahoo.com/p/v/vas.html
STATUS: Breakout test. Volume trailed off to a trickle to end the week as VAS showed a very tight doji right on top of the 10 day EMA (24.59). A good test of the breakout, showing some strong volume spikes that are telling us to get ready for the next leg higher. To recap: A new issue in late 2001, VAS is preparing to break to another new all-time high. It broke out from a 9 week cup with handle base that formed over the 50 day EMA (23.73). It rallied to 25 on the first move and has come back to test and hold the 18 day EMA (24.49). Volume spiked higher Monday as VAS logged a gain. With strong money flow leading the way and the 'get ready' volume spikes we anticipate VAS making the next breakout soon.
Volume: 47.1K Avg Volume: 158.303K
BUY POINT: $25.25 Volume=247K Target=$28.75 Stop=$23.97
POSITION: VAS AE - Jan. $25c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/vas.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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