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Begin part 3 of 3
We apologize for the late delivery of part 3. We looked over everything to find what was ready to move on a relief bounce.
THE PLAYS
Strong plays:
1) GSF: Ready to make the fall.
2) AMLN: Tight doji on the 18 day EMA.
3) GVHR: Nice breakout test as the market sold off.
4) AME: Trying to make the move.
5) COSI: Ignoring the selling.
6) LRCX: Making its move.
7) NVDA: Will go with the chips.
8) INFA: Strong volume and ready.
NEW PLAYS:
Upside plays:
Play Date: 10/12/2005
^SOX (Philly Semiconductor Index--$436.97; -1.74; optionable)
http://biz.yahoo.com/p/^/^sox.html
STATUS: Test 200 day SMA (433.29). Chips tapped the 200 day on the low and rebounded, showing relative strength in the market with many chips positive in the afternoon despite all of the selling on NASDAQ and elsewhere. With the sentiment indicators ramping up to show some anxiety, we are looking for what appears to be an index ready to lead as a vehicle to ride a relief bounce.
BUY POINT: $437.88 Target=$458 Stop=$433.05
POSITION: SWA LH - Dec. $437.50c (53 delta) or SWA KH - Nov. $437.50c (52 delta)
http://www.investmenthouse.com/ct/^sox.html
Play Date: 10/12/2005
AMLN (Amylin Pharmaceuticals--$33.83; +0.11; optionable): Drugs
http://biz.yahoo.com/p/a/amln.html
After Hours: $33.90
STATUS: Test 18 day EMA. Broke out from a 2 year base in mid-August with a massive gap higher. This is the second test of the 18 day EMA after the breakout, and strong stocks tend to make 4 to 5 such runs and tests. The runs are in the $8 range each, and that leaves AMLN lots of upside room. Excellent low volume pullback in the hard market selling, showing a nice tight doji Wednesday right on top of the 18 day. Strong money flow is leading higher. In a relief rally AMLN is ready to continue its breakout run.
Volume: 2.502M Avg Volume: 3.79M
BUY POINT: $34.25 Volume=4M Target=$41.15 Stop=$33.21
POSITION: AQM AG - Jan. $35c (52 delta) &/or Stock
http://www.investmenthouse.com/ct/amln.html
Play Date: 10/12/2005
GVHR (Gevity HR, Inc.--$25.76; -0.2; optionable): Staffing and outsourcing
http://biz.yahoo.com/p/g/gvhr.html
STATUS: Test breakout. GVHR blasted out of a 18 month base in late September, surging to 28. A market leader in sales, earnings and pattern. Strong 21 to 14 accumulation in the base (21 up price weeks on rising volume to 14 down price weeks on rising volume). In the market selling it faded back to the 18 day EMA (25.53) on low volume, holding near support. Impressive strength in this market. Ready to continue the break higher on a market rebound.
Volume: 295.443K Avg Volume: 260.735K
BUY POINT: $26.65 Volume=391K Target=$31.98 Stop=$25.35
POSITION: HWU BE - Feb. $25c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/gvhr.html
Downside:
Play Date: 10/12/2005
GSF (Globalsantafe--$42.01; -0.14; optionable): Oil and gas drilling/exploration
http://biz.yahoo.com/p/g/gsf.html
STATUS: Put. Strong run into August, a lateral move, and then an implosion through the 50 day EMA (44.18) to start October, falling to near the 200 day SMA (39.32). It rebounded the past four sessions, rallying back to the 10 day EMA (42.82) on a Wednesday gap higher. It could not hold the move and turned over on surging, above average volume. Looks ready to turn back down, and a move to the prior lows near 40 lands us a 42%ish gain.
Volume: 4.944M Avg Volume: 2.483M
BUY POINT: $41.89 Volume=2.5M Target=$39.87 Stop=$42.08
POSITION: GSF WV - Nov. $42.50p (-50 delta)
http://www.investmenthouse.com/ct/gsf.html
Play Date: 10/12/2005
PLCE (Childrens Place--$35.41; -1.43; optionable): Retail apparel stores
http://biz.yahoo.com/p/p/plce.html
After Hours: $35.41
STATUS: Put. Trending lower since the June peak, PLCE rallied to tap the 50 day EMA (39.23) last week intraday but then faded. It tried to hold the 18 day EMA (36.77) but then collapsed through that level Wednesday, resuming the downside move. That tap at the 50 day EMA was where it came up for air and set up further downside. Looking to move in on a continued drop as it resumes its downside move. A move to the target lands us a 44%ish gain.
Volume: 610.379K Avg Volume: 799.102K
BUY POINT: $35.29 Volume=800K Target=$33.35 Stop=$36.55
POSITION: TUY WG - Nov. $35p (-43 delta)
http://www.investmenthouse.com/ct/plce.html
CONTINUING PLAYS
Play Date: 10/08/2005
AKAM (Akami Technologies--$15.52; -0.4; optionable): Services for the delivery of content and business processes over the internet.
http://biz.yahoo.com/p/a/akam.html
After Hours: $15.48
STATUS: Reverse head and shoulders. Falling back to the 18 day EMA (15.33) in the market selling, moving on lighter, below average volume. That is where it should hold and bounce in a relief move. To recap: Strong move to end September sent AKAM up to the neckline of its 15 month base. Excellent volume on that move and then in the market selling AKAM eased back toward near support on lower volume. Strong money flow is leading higher. Relative strength broke out on the late September move. Solid 3 to 1 accumulation in the last 8 weeks of the base (3 up price weeks on rising volume to 1 down price weeks on rising volume) shows buying continues. After this pullback looking for volume to return as it continues the breakout move.
Volume: 1.46M Avg Volume: 1.511M
BUY POINT: $16.26 Volume=1.9M Target=$19.45 Stop=$15.48
POSITION: UMU AC - Jan. $15c (60 delta) &/or Stock
http://www.investmenthouse.com/ct/akam.html
Play Date: 10/11/2005
AME (Ametek--$42.75; -0.08; optionable): Industrial electrical equipment
http://biz.yahoo.com/p/a/ame.html
STATUS: Breakout test. Rallied to 43.72 on the high but could not hold the move in the weak market action. Very strong pattern and very strong market leader. Ready to continue on a relief move. To recap: AME blasted higher in late August and early September, moving out of a 12 week double bottom with handle base. Solid pattern that formed using the 200 day SMA (39.33) as support for the two legs. Nice run in 2003 and 2004, needing a breather to consolidate the move. A 16 week base from March to June could not yield a strong breakout. It then fell into the current base, sporting solid 3:1 accumulation (3 up price weeks on rising volume to 1 down price weeks on rising volume) and strong money flow. Nice price breakout and relative strength moved with it, showing us AME's strength in a down market. It used the recent selling as a test of its breakout; like it when a stock shows strength even in overall market weakness.
Volume: 347.7K Avg Volume: 316.755K
BUY POINT: $43.65 Volume=475K Target=$50.32 Stop=$42.05
POSITION: AME CH - Mar. $40c (66 delta) &/or Stock
http://www.investmenthouse.com/ct/ame.html
Play Date: 10/10/2005
BEAV (BE Aerospace--$17.01; -0.21; optionable): Commercial aircraft and business jet interior products
http://biz.yahoo.com/p/b/beav.html
After Hours: $17.05
STATUS: Cup w/handle. Reached down to the 18 day EMA (16.60) on the low and rebounded to hold the 10 day EMA (16.95) on the close. Still holding the excellent pattern showing excellent strength. Ready to bounce on a relief move in the market. To recap: Nice 9 week base looking for a 4 year high as it continues higher. Solid 4 to 2 accumulation (4 up price weeks on rising volume to 2 down price weeks on rising volume) shows solid buying in the base, preparing BEAV for the breakout. Strong surge last week on volume broke it higher, and it is now forming a nice low volume handle. Strong money flow is moving higher and relative strength broke out on the move. Solid leader with great sales, great revenues, and a great technical pattern.
Volume: 608.345K Avg Volume: 633.606K
BUY POINT: $18.05 Volume=950K Target=$21.68 Stop=$16.85
POSITION: BQV AW - Jan. $17.50c (64 delta) &/or Stock
http://www.investmenthouse.com/ct/beav.html
Play Date: 10/01/2005
COSI (Cosi--$9.88; 0; optionable): Fast, casual restaurants
http://biz.yahoo.com/p/c/cosi.html
STATUS: Ascending base. Moving in a very tight range below 10 and above the 10 day EMA (9.82), completely ignoring the market selling. Just needs a relief bounce in the market to make its move. To recap: COSI continues to hold the 18 day EMA on the lows as it tries for a higher low in its 10 week ascending base. It broke out in early August from a 15 month trading range. Good rally from that breakout and a good base has formed using the 50 day EMA (9.16) as support. Strong 5 to 1 accumulation in the current base shows plenty of buying along with those higher lows. Looking for that volume to jump back up above average as COSI breaks higher and above 10.
Volume: 352.749K Avg Volume: 454.288K
BUY POINT: $10.05 Volume=600K Target=$12.11 Stop=$9.38
POSITION: CQA AB - Jan. $10c (55 delta) &/or Stock
http://www.investmenthouse.com/ct/cosi.html
Play Date: 10/05/2005
INFA (Informatica--$11.98; +0.05; optionable): Business software
http://biz.yahoo.com/p/i/infa.html
After Hours: $11.98
STATUS: Cup w/handle. Strong volume Wednesday as INFA crouches for the move higher. Another stock that is ignoring the selling and ready to move when the pressure lets up. To recap: INFA has formed a small cup with handle that is acting as the handle to a larger 21 month base. The small base shows solid 3 to 0 accumulation (3 up price weeks on rising volume to 0 down price weeks on rising volume), using the 50 day EMA (11.24) as support. Easing back, tapping at and holding the 18 day EMA on the lows. Strong money flow. Relative strength is breaking out ahead of the stock; very bullish. Another stock going about its own business as the market sold off.
Volume: 2.309M Avg Volume: 1.286M
BUY POINT: $12.05 Volume=1.5M Target=$13.98 Stop=$11.55
POSITION: UYF CB - Mar. $10c (72 delta) &/or Stock
http://www.investmenthouse.com/ct/infa.html
Play Date: 10/08/2005
LRCX (Lam Research--$30.2; +0.14; optionable): Semiconductor equipment
http://biz.yahoo.com/p/l/lrcx.html
After Hours: $31.15
STATUS: Ascending triangle. Jumping after hours as LRCX showed excellent volume during the regular session. One of the chips that held its ground and formed its pattern in the selling. That is leadership material. To recap: LRCX sold back as well with the market last week, but it was not a freefall as with many stocks. It made an orderly pullback to the 50 day EMA (30.05), attempting another higher low in its 28 week base that has used the 200 day SMA (28.90) on the lows. Solid 8 to 6 accumulation shows net buying, setting up the breakout move. Looking for a higher low here and a volume move through the recent highs in early October as our entry point for starters. After a strong breakout we will also look for positions on a successful test.
Volume: 4.143M Avg Volume: 2.495M
BUY POINT: $31.44 Volume=3.8M Target=$36.89 Stop=$29.81
POSITION: LMQ AF - Jan. $30c (58 delta) &/or Stock
http://www.investmenthouse.com/ct/lrcx.html
Play Date: 10/06/2005
NVDA (Nvidia--$32.2; +0.38; optionable): Semiconductors
http://biz.yahoo.com/p/n/nvda.html
After Hours: $32.21
STATUS: Test 50 day EMA. NVDA was not immune to the selling, but it did not implode. It sold back to the 50 day EMA (31.43) on mostly low to average volume, testing the breakout from a 6 month ascending triangle. Money flow remains strong. Looks super and ready to bounce with the semiconductors.
Volume: 5.477M Avg Volume: 5.136M
BUY POINT: Aggressive: 33.11; orig. $33.55 Volume=6.5M Target=$40.45 Stop=$31.95
POSITION: UVA AT - Jan. $32.50c (60 delta) &/or Stock
http://www.investmenthouse.com/ct/nvda.html
Play Date: 10/08/2005
UNH (Unitedhealth Group--$55.03; -0.15; optionable): Health care plans
http://biz.yahoo.com/p/u/unh.html
After Hours: $54.83
STATUS: Test 18 day EMA. Tight doji at the 18 day EMA (55.25) as volume moved up to average as UNH held the line. It has now tested the breakout and this is where it needs to hold and make its move if it is going to hold the breakout.
Volume: 4.996M Avg Volume: 5.344M
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/ct/unh.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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