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Begin part 3 of 3
THE PLAYS
Good movers: CVD; INGR; MSTR; SYNM; VAS; TBL
Best Plays:
1) AEZ: Nice volume as this oil and gas stock breaks higher.
2) ORBK: Resuming the breakout move.
3) SOX: May be ready to lead the market.
4) BRCM: A semiconductor that will move if the chips do.
5) KERX: Remains ready to break higher.
6) MCHP: Another chip ready to move off the 50 day EMA.
NEW PLAYS:
Upside:
Play Date: 08/22/2005
AEZ (American Oil & Gas--$5.75; +0.27; no options): Independent oil and gas
http://biz.yahoo.com/p/a/aez.html
STATUS: Double bottom w/handle. Good volume Monday as AEZ started the breakout from its 8 week pattern formed using the 50 day EMA (4.93) as support. Solid 2 to 0 accumulation in the pattern (2 up price weeks on rising volume to 0 down price weeks on rising volume) and surging money flow have set the stage as AEZ is ready to move to a new all-time high (went public in late 2003).
Volume: 324.6K Avg Volume: 209.055K
BUY POINT: $5.85 Volume=314K Target=$7.05 Stop=$5.44
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/aez.html
Play Date: 08/22/2005
ORBK (Orbotech--$25.45; +0.82; optionable): Automated optical inspection products for printed circuit boards, flat panel displays
http://biz.yahoo.com/p/o/orbk.html
After Hours: $25.41
STATUS: Test 50 day EMA. ORBK broke out from a 20 week double bottom base in late July and rallied to 26. It tested back with the market, holding above the 50 day EMA (23.65) on the test. A solid volume jump Thursday and then an upside move today on rising volume. Looks like a successful breakout test and a buy on a continued volume move higher. The base sports outstanding 8 to 2 accumulation (8 up price weeks on rising volume to 2 down price weeks on rising volume), setting the foundation for a good move. Money flow is surging ahead of price.
Volume: 126.6K Avg Volume: 112.917K
BUY POINT: $25.57 Volume=200K Target=$29.89 Stop=$24.52
POSITION: OKQ AE - Jan. $25c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/orbk.html
Play Date: 08/22/2005
^SOX (Philly Semiconductor Index--$467.72; +5.45; optionable)
http://biz.yahoo.com/p/^/^sox.html
STATUS: Test 50 day EMA. SOX broke out of its 11 month trading range in mid-July, rallying 35 points from the breakout point. It has spent this month testing the move, falling back toward the 50 day EMA (455.21) the past week, bottoming easily above that level. 450 marks the top of the trading range and SOX easily held above that level and Monday SOX moved back up through the 18 day EMA (465.90). Some resistance at 470, and we are looking for SOX to move through that level to start our position.
BUY POINT: $470.25 Target=$494 Stop=$463
POSITION: SXX JN - Oct. $470c (50 delta, low OI) or SXX IN - Sept. $470c (48 delta)
http://www.investmenthouse.com/ct/^sox.html
Downside:
Play Date: 08/22/2005
FST (Forest Oil Corp.--$42.57; -0.08; optionable): Independent oil and gas
http://biz.yahoo.com/p/f/fst.html
STATUS: Put. FST made a new 10 year high in early August, but volume lagged and the moves stalled. Moreover, the stocks started to sell on much higher, above average volume, a sign that the buyers on the way up have turned to sellers. It crashed through the 50 day EMA (43.27) Tuesday, sold hard Wednesday, and then made a lower volume rebound Thursday and Friday. Monday it tapped at the 50 day on the high and turned back down on rising though still below average volume. Money flow is falling steeply ahead of the price, and we anticipate FST to continue to follow it lower after this 'kiss goodbye.' A move to the target gains us 44%ish.
Volume: 644.2K Avg Volume: 726.939K
BUY POINT: $42.25 Volume=735K Target=$40.12 Stop=$42.89
POSITION: FST VI - Oct. $45p (-62 delta)
http://www.investmenthouse.com/ct/fst.html
CONTINUING PLAYS
Upside:
Not yet entered:
Play Date: 08/04/2005
AMX (America Movil--$22.6; +0.35; optionable): Wireless telecom
http://biz.yahoo.com/p/a/amx.html
STATUS: Breakout test. Volume remained very low Monday as AMX continued its lateral move above the 18 day EMA (22.05) but below 23, a point setting up as resistance in this test. Strong trade toward the end of last week. Good money flow remains. Looking for a strong volume move to start the play. To recap: Broke out from a 14 week cup with handle in June and rallied up the 18 day. Spent the past three weeks moving laterally, testing the early run. Strong money flow is leading higher and just made a higher low at the 18 day.
Volume: 1.119M Avg Volume: 3.441M
BUY POINT: Aggressive: $22.21; Breakout: $23.12 Volume=5M Target=$25.55 Stop=$21.54
POSITION: AMX KD - Nov. $20c (64 delta) &/or Stock
http://www.investmenthouse.com/ct/amx.html
Play Date: 08/15/2005
BRCM (Broadcom--$42.44; +0.56; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/b/brcm.html
After Hours: $42.40
STATUS: Flying plateau. Moved up off the 18 day EMA (41.84) on rising though still below average volume Monday. Coming off last week's low where BRCM hit the late July lows after the strong gap higher on its earnings report. Money flow is leading higher and we anticipate semiconductors are going to try and lead the next upside move. BRCM is in good position to continue higher. 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: 6.25M 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: 08/15/2005
FLSH (M-Systems Flash Disk--$24.88; -0.3; optionable): Semiconductors
http://biz.yahoo.com/p/f/flsh.html
STATUS: Double bottom w/handle. Tougher session for FLSH as it undercut the 18 day EMA (25.12) and sold to 24.27 on the low before rebounding for a modest loss. Volume bumped higher but was still well below average. This looks as if it could be the final low volume shakeout in its handle. Need to see the break higher on above average volume. To recap: FLSH has already made us some nice money, and now it is ready to do it again. Still forming the handle to its 23 week base. Solid pattern that used the 200 day SMA (21.26) 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: 525.504K 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: 08/20/2005
KERX (Keryx Biopharmaceuticals--$16.71; +0.17; optionable): Drugs
http://biz.yahoo.com/p/k/kerx.html
STATUS: Breakout test. Volume remains very low as KERX continues a lateral move over the 18 day EMA (16.29) as it consolidates that strong July breakout. This low volume test shows few buyers and we are waiting for the next break higher to initiate the play. To recap: KERX is moving laterally, holding the 18 day EMA 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: 153.22K 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: 08/17/2005
MCHP (Microchip--$31; +0.24; optionable): Semiconductors
http://biz.yahoo.com/p/m/mchp.html
After Hours: $30.92
STATUS: Test 50 day EMA. Low volume the past four sessions as MCHP moves laterally along the 50 day EMA (30.72), showing dojis on the candlestick pattern. We think semiconductors are going to try a lead higher here and MCHP looks ready to follow its money flow 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 (30.72), 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: 941.362K 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: 08/20/2005
SYKE (Sykes Enterprises--$10.49; +0.04; no options): ITS software
http://biz.yahoo.com/p/s/syke.html
STATUS: Test 18 day EMA (10.38). Another below average volume session as SYKE continues to test the big break higher from two weeks back. Nice test and like the way it is holding the 18 day EMA on this test. Just need to see that volume really jump on the next break higher. To recap: 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: 170.989K 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
CC (Circuit City--$17.09; -0.10; optionable): Electronics stores
http://biz.yahoo.com/p/c/cc.html
STATUS: Put. Selling modestly Monday as volume fell sharply below average. CC tried to reach back up to the 50 day EMA (17.46) but failed and rolled back over. Want to see some more trade as it moves back down to initiate the play. To recap: 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 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 last Friday and then turned lower to close the session. 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: 653.9K 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
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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