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top stock pick, stock recommendation
Begin part 3 of 3
THE PLAYS
Good movers: BOOM, CRXL, FRK, GILD, GPN, SMTS, VLO
Thursday night play results:
FLO: Moving higher but no volume Friday. Still looks sweet.
NVDA: Sold to the 18 day EMA on lower volume.
SMTS: Nice bounce off the 10 day EMA.
SPIL: Reached down to the 50 day SMA and rebounded. Solid but needs to show some volume
GPN: Good volume as it bounced up off the 10 day EMA test.
Upside:
Play Date: 10/08/2005
BRCM (Broadcom--$46.47; +0.58; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/b/brcm.html
After Hours: $46.76
STATUS: Test 18 day EMA. Taking another run at BRCM. It is showing real strength as the market sold off, dropping on higher volume Thursday, but holding the 18 day EMA (45.86) after just cracking through it. This is the second test following the early September break higher from a 6 week flat base. Bigger picture this is a test of the breakout from a much larger 14 month cup with handle. Again, very strong pattern and very good relative strength as the market sold off last week. Just looking for volume to pick up as BRCM continues higher after this shallow test.
Volume: 4.434M Avg Volume: 6.882M
BUY POINT: $46.92 Volume=8.8M Target=$55.95 Stop=$45.45
POSITION: RCQ AI - Jan. $45c (62 delta) &/or Stock
http://www.investmenthouse.com/ci/brcm.html
Play Date: 10/08/2005
GG (Goldcorp--$20.09; +0.67; optionable): Gold mining
http://biz.yahoo.com/p/g/gg.html
After Hours: $20.15
STATUS: Breakout test. GG is moving laterally the past 3 weeks, holding near the 18 day EMA (19.65) as it tests the September break higher out of a 21 month cup with handle base. Got a bit rocky last week with the market selling, but held up relatively well, keeping the move orderly. Weathering that kind of storm sets it up to continue the breakout move as the market comes around. Gold is doing well in this inflation concerned environment, and GG is a top ranked stock in sales, earnings, and its technical pattern.
Volume: 3.249M Avg Volume: 2.359M
BUY POINT: $20.42 Volume=3.5M Target=$25.55 Stop=$19.48
POSITION: GG AD - Jan. $20c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/gg.html
Play Date: 10/08/2005
JEF (Jeffries Group--$44.01; +0.81; optionable): Brokerage services
http://biz.yahoo.com/p/j/jef.html
STATUS: Breakout test. Nice, easy test of the 10 day EMA (43.27) last week as JEF comes back to consolidate the breakout move from a nicely formed 11 month cup with handle. In the little 9 week cup with handle that is the handle of the larger base, accumulation is an excellent 4 to 1 (4 up price weeks on rising volume to 1 down price weeks on rising volume). Unlike the market as a whole, JEF held its breakout with a lower volume test. Looks very good to continue its move higher.
Volume: 257.5K Avg Volume: 231.665K
BUY POINT: $44.45 Volume=347K Target=$51.45 Stop=$43.11
POSITION: JEF AI - Jan. $45c (49 delta) &/or Stock
http://www.investmenthouse.com/ci/jef.html
Play Date: 10/08/2005
PFWD (Phase Forward--$10.47; +0.44; no options): Integrated software for pharmaceutical, biotech, medical device companies.
http://biz.yahoo.com/p/p/pfwd.html
STATUS: Breakout test. Another strong stock that used last week's selling to test its explosive breakout. PFWD eased back on low volume, indicating few sellers. A new issue in July 2004, PFWD broke out of its first real base in September, a big 11 month cup with handle. Accumulation in the base was a strong 12 to 8, showing plenty of buying. Surging money flow as well. Relative strength broke out on the move as well, a good corroboration of the breakout. Love the first bases of new issues, especially the test of those breakouts. Looking for solid volume as it continues higher.
Volume: 135.208K Avg Volume: 180.485K
BUY POINT: $10.75 Volume=250K Target=$12.95 Stop=$10.11
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ci/pfwd.html
Play Date: 10/08/2005
UNH (Unitedhealth Group--$56.37; -0.04; optionable): Health care plans
http://biz.yahoo.com/p/u/unh.html
After Hours: $55.96
STATUS: Breakout test. UNH moved higher in late September out of an 11 week double bottom with handle base. One really good volume surge was all it showed, but that was enough to propel it 58 on the move. During the selling last week UNH faded back to the 10 day EMA (55.94) on very low volume, using the selling to simply take a breather. Looks ripe to continue the move this week. Solid market leader. Excellent money flow and a relative strength breakout as well.
Volume: 3.218M Avg Volume: 5.504M
BUY POINT: $56.68 Volume=6M Target=$64.95 Stop=$55.55
POSITION: UHB AK - Jan. $55c (60 delta) &/or Stock
http://www.investmenthouse.com/ci/unh.html
New buy points on current positions
Play Date: 10/08/2005
MSCC (Microsemi--$24.13; -0.07; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/m/mscc.html
After Hours: $24.10
STATUS: Test 50 day EMA. Another leader in the semiconductor sector, MSCC sold last week with the market, but it did so on lower and lower below average volume, fading back to support at the 50 day EMA (23.77). The low volume shows there was little heavy selling or dumping of the stock. Thus this test of the 50 day EMA simply sets up another entry point following its summer breakout from its 6 month cup with handle base. What you want to see on these is volume increase as it continues the breakout move.
Volume: 463.494K Avg Volume: 718.103K
BUY POINT: $24.84 Volume=900K Target=$28.45 Stop=$23.71
POSITION: QMS CX - Mar. $22.50c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/mscc.html
Good Investing!
Jon L. Johnson and your IH Alerts 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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top stock pick
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