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Begin part 3 of 3
THE PLAYS
Good movers: AKAM; BABY; IRIS; MACR; SMTS; TSAI; UNH
Strong plays:
1) AH: Big volume from a strong leader.
2) WBSN: Ready to make some serious headway.
3) WRES: Excellent test from a strong oil and gas stock.
4) AME: Looks like it must might be there.
5) BEAV: Still a pretty pattern.
6) DRRX: Volume has surged and it is knocking at the breakout door.
7) INFA: Reached way down and rebounded on volume. Set the breakout.
NEW PLAYS:
Upside plays:
Play Date: 10/19/2005
AH (Armor Holdings--$44.44; +0.52; optionable): Body armor
http://biz.yahoo.com/p/a/ah.html
STATUS: Cup w/handle. Big, rangy 10 month pattern has formed sporting solid 10 to 6 accumulation (10 up price weeks on rising volume to 6 down price weeks on rising volume) that shows continued accumulation through the consolidation. Big mover in 2003 and 2004 with the Iraq war, it needed this base. Nice dip to the 200 day SMA (40) in September that worked as a good shakeout. Volume surged Wednesday as AH moved past the high in the handle. Looking to move in as AH continues higher. Top rated stock.
Volume: 1.436M Avg Volume: 520K
BUY POINT: $44.88 Volume=780K Target=$53.85 Stop=$41.91
POSITION: AH BI - Feb. $45c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/ah.html
Play Date: 10/19/2005
GES (Guess? Inc.--$24.9; -0.11; optionable): Apparel
http://biz.yahoo.com/p/g/ges.html
STATUS: Cup w/handle. Forming the handle to an 11 week base as GES sets up for a breakout to a 5 year high. Sweet little base that formed using the 50 day EMA (22.44) as support. Strong money flow is leading higher and relative strength broke out on the early October move that set the right side of the pattern. Tested the 18 day EMA (23.78) on the intraday low and rebounded to close flat. That looks like the shakeout that sets up the breakout. Top rated stock in fundamentals and pattern.
Volume: 485.3K Avg Volume: 463.6K
BUY POINT: $25.25 Volume=695K Target=$30.42 Stop=$23.69
POSITION: GES CE - Mar. $25c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/ges.html
Play Date: 10/19/2005
PDFS (PDF Solutions--$17.33; +1.15; no options): Infrastructure technologies for integrated circuits
http://biz.yahoo.com/p/p/pdfs.html
STATUS: Breakout test. PDFS broke out from a 8 month cup with handle in early September, rallied to 18, and then faded back to test the move, getting caught in the August selling. It held the bottom of the handle at 15 and rebounded to the 50 day EMA (16.08). Wednesday PDFS received a huge shot of volume as it jumped off the 50 day. Strong money flow is rallying higher ahead of price. Relative strength is moving for the breakout, leading the stock higher. Top rated stock in fundamentals and pattern.
Volume: 299.284K Avg Volume: 134.68K
BUY POINT: $17.65 Volume=202K Target=$21.25 Stop=$16.41
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/pdfs.html
Play Date: 10/19/2005
WBSN (Websense--$54.50; +1.33; optionable): Employee internet management
http://biz.yahoo.com/p/w/wbsn.html
After Hours: $54.38
STATUS: Cup. Volume has jumped the past two sessions as WBSN starts off the 200 day SMA (52.20) and continues to build the right side of its 8 month base. It is clearing resistance built over the last 5 weeks. Strong 7 to 4 accumulation (7 up price weeks on rising volume to 4 down price weeks on rising volume) shows plenty of buying in the base. A top rated stock as far as earnings and pattern. Looking to move in as it continues higher on a bit stronger volume. Strong earnings, strong pattern.
Volume: 534.649K Avg Volume: 554.658K
BUY POINT: $54.88 Volume=832K Target=$63.45 Stop=$52.91
POSITION: DQH AK - Jan. $55c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/wbsn.html
Play Date: 10/19/2005
WRES (Warren Resources--$15.29; +0.45; optionable): Oil and gas service company
http://biz.yahoo.com/p/w/wres.html
After Hours: $15.25
STATUS: Breakout test. Not all energy is suffering from the dips. WRES was a new issue in December 2004. It broke out of its first base, a cup with handle, in mid-September, surging to 18 on the run. It was burned in the October selling, but that just took it down to the 50 day EMA (13.33) for a fraction on the intraday low last week. Has rebounded, and is holding the 18 day EMA (14.64) on this test. Another top rated stock in fundamentals and earnings.
Volume: 367.755K Avg Volume: 406.597K
BUY POINT: $15.68 Volume=450K Target=$18.85 Stop=$14.58
POSITION: QQW BC - Feb. $15c (63 delta) &/or Stock
http://www.investmenthouse.com/ct/wres.html
CONTINUING PLAYS
Play Date: 10/11/2005
AME (Ametek--$43.44; +0.6; optionable): Industrial electrical equipment.
http://biz.yahoo.com/p/a/ame.html
STATUS: Breakout test. Reached down to support at 42 Wednesday and then rebounded for a nice gain on rising average volume. Money flow continues to surge higher ahead of price. We have waited patiently for this one and now it looks ready after this test. 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 (39.55) 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: 335.9K Avg Volume: 312.179K
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: 10/15/2005
AQNT (Aquantive--$20.1; +0.56; optionable): Internet services
http://biz.yahoo.com/p/a/aqnt.html
STATUS: Test 50 day EMA. Just not getting the volume as AQNT moves higher in its 15 week ascending base. Strong money flow. Relative strength is ready to breakout ahead of price, a bullish indication. Just need the strong volume to return to step into the play.
Volume: 557.315K Avg Volume: 1.021M
BUY POINT: New: 20.25 (orig. $19.38) Volume=1.6M Target=$23.95 Stop=$18.48
POSITION: QBT CD - Mar. $20c (53 delta) &/or Stock
http://www.investmenthouse.com/ct/aqnt.html
Play Date: 10/10/2005
BEAV (BE Aerospace--$17.47; +0.22; optionable): Commercial aircraft and business jet interior products
http://biz.yahoo.com/p/b/beav.html
After Hours: $17.47
STATUS: Cup w/handle. Still looks strong as it works on the handle on low volume as it moves along the 18 day EMA (16.92). It remains ready. 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 two weeks back on volume as BEAV broke 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: 481.964K Avg Volume: 647.539K
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
DRRX (Durect--$7; +0.12; no options): Drug delivery platforms
http://biz.yahoo.com/p/d/drrx.html
STATUS: Test breakout. Strong volume the past two sessions as DRRX teases us with the breakout move. Very strong as it holds the short term MA on the lows and knocks at the breakout door. To recap: DRRX broke out from a long 24 month trading range in June, rallying up the 18 day EMA (6.63) into July. Another 6 week flat base led to an early September breakout. Another test took it back to the 50 day EMA two weeks ago and it is now starting to rebound to continue the breakout move. Volume has been low and below average since moving off the 50 day EMA and is now starting higher as it makes its move. Just what you want to see.
Volume: 476.633K Avg Volume: 361.842K
BUY POINT: $6.98 Volume=500K Target=$8.38 Stop=$6.49
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/drrx.html
Play Date: 10/17/2005
HITK (Hi-Tech Pharmacal--$31.99; +0.69; no options): Generic drugs
http://biz.yahoo.com/p/h/hitk.html
STATUS: Cup w/handle. Volume edged up above average Wednesday as HITK knocked at the breakout. Want to see more of a breakaway move with added volume. To recap: Volume was up and above average Monday as HITK started the breakout move from its13 week base sporting solid 4 to 2 accumulation (4 up price weeks on rising volume to 2 down price weeks on rising volume). A strong leader with top flight fundamentals and a great pattern. Ready to breakout and move to a new all-time high.
Volume: 99.968K Avg Volume: 102.286K
BUY POINT: $31.85 Volume=154K Target=$38.38 Stop=$30.28
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/hitk.html
Play Date: 10/05/2005
INFA (Informatica--$11.99; +0.06; optionable): Business software
http://biz.yahoo.com/p/i/infa.html
STATUS: Cup w/handle. Reached way down to the 50 day EMA (11.37) on the low and then snapped back up to close flat on rising, average trade. That looks to be the last shakeout that sets the breakout move. 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 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: 1.379M Avg Volume: 1.322M
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: 10/15/2005
MTIX (Micro Therapeutics--$6.66; +0.26; no options): Medical instruments
http://biz.yahoo.com/p/m/mtix.html
STATUS: Test breakout. No volume Wednesday as MTIX moved up to the breakout point. A solid pattern, it just needs some trade behind it to show the buyers moving in. To recap: Big blast higher 2 weeks back, gapping out of a 9 week double bottom with handle base. It surged over 7.50 and then fell back in the selling to fill the gap. It held the break and is now starting to work higher. Strong 4 to 1 accumulation in the base shows plenty of strong buying, and money flow. Looks ready to continue its move now that it has tested and volume is coming back in as MTIX moves higher.
Volume: 66.462K Avg Volume: 125.005K
BUY POINT: $6.65 Volume=182K Target=$7.98 Stop=$6.18
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/mtix.html
Play Date: 10/10/2005
SMSC (Standard Microsystems--$27.19; 0.00; no options): PC networking
http://biz.yahoo.com/p/s/smsc.html
STATUS: Test 50 day EMA. Big doji with tail Wednesday as volume spiked well above average. SMSC has filled the gap from mid-September that took it out of a 9.5 month cup with handle base. The test to fill the gap has set the continuation of the breakout move. Strong money flow is leading higher and SMSC looks set to follow it now.
Volume: 398.991K Avg Volume: 193.818K
BUY POINT: Aggressive: 28.25 (orig. $29.42) Volume=293K Target=$35.32 Stop=$28.05
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/smsc.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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