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Begin part 3 of 3
THE PLAYS
Good movers: AQNT; BABY; CRM; LRCX; MACR; PIR
Strong plays:
1) BCSI: Market leader making a breakout move.
2) NWRE: Just needs some volume to take it out of this excellent pattern.
3) ATK: Ready to dive lower.
4) AH: Volume is surging.
5) NTRI: Looks ready with a tight doji on the 18 day EMA.
6) SMSC: Strong volume to close out the last half of the week.
7) UNH: Nice doji over the 10 day EMA; ready to continue the breakout move.
NEW PLAYS:
Upside plays:
Play Date: 10/22/2005
BCSI (Blue Coat Systems--$45.43; +3.04; optionable): Internet security software
http://biz.yahoo.com/p/b/bcsi.html
After Hours: $46.05
STATUS: Cup w/handle. Strong volume Friday as BCSI started the breakout from a big, long 20 month pattern. Excellent 17 to 6 accumulation (17 up price weeks on rising volume to 6 down price weeks on rising volume) in the base shows net buying that sets the foundation for a breakout and rally. Strong money flow compliments the accumulation. Strong break higher with plenty of room to run. A top rated stock in fundamentals and technical pattern. Ready to step in as BCSI continues this move.
Volume: 586.033K Avg Volume: 362.071K
BUY POINT: $45.75 Volume=543K Target=$54.95 Stop=$42.55
POSITION: IYU AI - Jan. $45c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/bcsi.html
Play Date: 10/22/2005
CLDN (Celadon Group--$22.97; +0.19; no options): North American truckload carrier
http://biz.yahoo.com/p/c/cldn.html
STATUS: Cup w/handle. Excellent 9 month base has set up this year after a very strong 2003 and 2004. In short, it needed this base to regroup and set up its next strong run. Tremendous volume surge in mid-October as it announced earnings guidance well above consensus. Earnings are out 10-26, but we like that we already have the preview. Eased back to the 10 day EMA (22.67) last week, and ready to move in as volume jumps back up as CLDN turns back up and breaks out of the pattern.
Volume: 52.003K Avg Volume: 103.489K
BUY POINT: $23.66 Volume=155K Target=$28.45 Stop=$22
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/cldn.html
Play Date: 10/22/2005
NWRE (Neoware--$17; +0.71; optionable): Business customer software
http://biz.yahoo.com/p/n/nwre.html
STATUS: Cup w/handle. NWRE is forming the handle to a big 26 month base, working laterally this month above the 18 day EMA (16.25), using that level to shakeout the last sellers and set up the breakout move. Strong 24 to 17 accumulation in the pattern shows plenty of buying as NWRE sets up a breakout for a new all-time high. Strong money flow is leading higher and relative strength is ready for the breakout. Has a lot going for it.
Volume: 240.03K Avg Volume: 324.4K
BUY POINT: $18.24 Volume=487K Target=$21.95 Stop=$16.96
POSITION: QQA AW - Jan. $17.50c (51 delta) &/or Stock
http://www.investmenthouse.com/ct/nwre.html
New Downside Play:
Play Date: 10/22/2005
ATK (Alliant Techsystems--$69.97; -0.64; optionable): Aerospace/defense products
http://biz.yahoo.com/p/a/atk.html
STATUS: Put. Peaked in August and has skidded lower since. It tanked below the 200 day SMA (71.48) two weeks back and then rebounded last week to the 18 day EMA (71.99). A few sessions bumping at that level it has started lower again. Money flow is diving lower ahead of price and we are looking for ATK to continue lower and landing us a 40%ish gain.
Volume: 201.5K Avg Volume: 270.109K
BUY POINT: $69.86 Volume=270K Target=$67.85 Stop=$70.22
POSITION: ATK XN - Dec. $70p (-47 delta)
http://www.investmenthouse.com/ct/atk.html
New entry points for additional or new positions on current plays:
Play Date: 10/12/2005
AMLN (Amylin Pharmaceuticals--$36.05; +0.09; optionable): Drugs
http://biz.yahoo.com/p/a/amln.html
After Hours: $35.98
STATUS: Breakout test. AMLN is testing the 10 day EMA (35.72) the past week, easing back to that level on low volume. This is the second test of the short term moving averages after a big gap higher in late August. Strong stocks ignore the market, using selling to consolidate. That is what AMLN is doing as it rallies up the 10 and 18 day EMA. Money flow continues to move higher and relative strength is ready for another breakout. Strong stock ready for more.
Volume: 2.57M Avg Volume: 3.693M
BUY POINT: New: $36.55 (orig. $35.55) Volume=4M Target=$42.25 Stop=$35.04
POSITION: AQM AG - Jan. $35c (52 delta) &/or Stock
http://www.investmenthouse.com/ct/amln.html
Play Date: 10/22/2005
IRIS (Iris Intl.--$21.23; +0.12; optionable): Automated in vitro diagnostics systems
http://biz.yahoo.com/p/i/iris.html
STATUS: Breakout test. Strong move on volume Wednesday and then a low volume lateral move to end the week, holding the gain. This is a test of the breakout from a nice 4 month base in early October. Strong volume move, nice low volume test. Ready to continue the move from this market leader. Strong relative strength is ready for the breakout move as well, a very good indication for a continued upside price move.
Volume: 113.237K Avg Volume: 193.302K
BUY POINT: $21.62 Volume=290K Target=$24.95 Stop=$20.05
POSITION: JGU AD - Jan. $20c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/iris.html
Play Date: 10/22/2005
VRTX (Vertex Pharmaceuticals--$22.35; +0.05; optionable): Drugs
http://biz.yahoo.com/p/v/vrtx.html
After Hours: $22.33
STATUS: Test 18 day EMA. VRTX has made us some great money already on this run as it bolted higher to end September. In the October selling VRTX has come back to near support at the 18 day EMA (21.71) to consolidate that move. Strong stock as it is not giving up much ground and volume is very low, showing no real sellers. Ready for it to rebound and follow the strong money flow higher to a new 4 year high.
Volume: 1.52M Avg Volume: 1.48M
BUY POINT: $22.85 Volume=2M Target=$27.45 Stop=$21.59
POSITION: VQR AX - Jan. $22.50c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/vrtx.html
CONTINUING PLAYS
Play Date: 10/19/2005
AH (Armor Holdings--$44.24; +0.86; optionable): Body armor
http://biz.yahoo.com/p/a/ah.html
STATUS: Cup w/handle. Strong volume Wednesday and Friday as AH couches for the breakout. Looks super. To recap: 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 (40.06) 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: 1.579M Avg Volume: 517.145K
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: 10/10/2005
BEAV (BE Aerospace--$17.51; -0.07; optionable): Commercial aircraft and business jet interior products
http://biz.yahoo.com/p/b/beav.html
After Hours: $17.49
STATUS: Cup w/handle. Still working laterally and still ready to make the big breakout. Super pattern. To recap: Nice11 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: 333.287K Avg Volume: 647.829K
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--$6.90; +0.01; no options): Drug delivery platforms
http://biz.yahoo.com/p/d/drrx.html
STATUS: Test breakout. Nice low volume to end the week as DRRX eased back to the 10 day EMA (6.76) and works on a nice new handle to its short base. Good volume early in the week and a nice fade to set up the this week's breakout. To recap: DRRX broke out from a long 24 month trading range in June, rallying up the 18 day EMA (6.69) 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, forming a short double bottom with handle as it does. 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: 314.299K Avg Volume: 361.605K
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: 10/18/2005
NTRI (Nutrisystem--$27.57; +0.22; optionable): Weight loss systems
http://biz.yahoo.com/p/n/ntri.html
After Hours: $27.57
STATUS: Test 18 day EMA. Broke out in early October, making us a nice return. It then sold back to the 18 day EMA (27.48) during the market selling, and has held that key near support, moving laterally in a narrow range the past week on very low volume. That has consolidated the breakout, and now NTRI looks ready to rebound and resume its breakout run.
Volume: 337.451K Avg Volume: 789.855K
BUY POINT: $29.05 Volume=1.2M Target=$34.95 Stop=$27.39
POSITION: NSI CF - Mar. $30c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/ntri.html
Play Date: 10/06/2005
NVDA (Nvidia--$31.94; +0.18; optionable): Semiconductors
http://biz.yahoo.com/p/n/nvda.html
After Hours: $31.99
STATUS: 50 day EMA test. Gapped higher Friday but no volume and NVDA faded back to the 50 day EMA (31.54) where it has camped out the past two weeks, setting up for the next move. Being patient and waiting for that strong move above the 18 day EMA (32.35). To recap: NVDA continues to test the 50 day EMA, moving laterally at that level for the past week on low volume. It broke out of a 24 week triangle in early September and rallied smartly to 36. It has made a low volume test in the October selling, holding at key support. Looking for a volume move back up as NVDA clears the 18 day EMA. With the semiconductors looking better, NVDA is a prime candidate to continues its breakout move.
Volume: 2.486M Avg Volume: 4.703M
BUY POINT: $32.89 Volume=6.5M Target=$40.45 Stop=$31.38
POSITION: UVA AT - Jan. $32.50c (60 delta) &/or Stock
http://www.investmenthouse.com/ct/nvda.html
Play Date: 10/10/2005
SMSC (Standard Microsystems--$29.14; +1.31; no options): PC networking
http://biz.yahoo.com/p/s/smsc.html
STATUS: Test 50 day EMA. Strong volume the pat three sessions as SMSC broke higher Friday. Looks super and still a buy on this move. To recap: 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. Relative strength broke out Friday ahead of the price; that tells us SMSC is going to continue higher.
Volume: 381.76K Avg Volume: 194.994K
BUY POINT: $29.42 Volume=293K Target=$35.32 Stop=$28.05
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/smsc.html
Play Date: 10/08/2005
UNH (Unitedhealth Group--$57.14; +0.03; optionable): Health care plans
http://biz.yahoo.com/p/u/unh.html
After Hours: $57.22
STATUS: Test breakout. UNH is ready to go again with a nice tight doji that tapped the 10 day EMA (56.57) on the low and rebounded on strong volume. Broke out in late September from an 11 week double bottom with handle. Rallied and then tested the 50 day EMA (54.45) in the October selling. Held and bounced right back up. This test during the Thursday market selling and doji Friday sets it up for the next breakout move.
Volume: 6.069M Avg Volume: 5.126M
BUY POINT: New: $57.88 (orig. $56.32) Volume=6M Target=$64.95 Stop=$56.15
POSITION: UHB AK - Jan. $55c (60 delta) &/or Stock
http://www.investmenthouse.com/ct/unh.html
Play Date: 10/19/2005
WBSN (Websense--$54.84; +1.03; optionable): Employee internet management
http://biz.yahoo.com/p/w/wbsn.html
STATUS: Cup. Moving higher Friday but unable to score any volume. Indeed, volume has been the weak link the past week as WBSN moved higher. Still like the look of it as it tries to build the right side of its base. If we see some more volume we will open a position and then take more after it forms a handle and breaks out again. To recap: Building the right side of its 8 month base, coming off a test of the 200 day SMA breakout (52.28) last week as it cleared 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.
Volume: 385.759K Avg Volume: 559.67K
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
Downside:
Play Date: 10/15/2005
NETL (Netlogic Microsystems--$19.88; -0.12; optionable): Semiconductors
http://biz.yahoo.com/p/n/netl.html
STATUS: Put. NETL continues to lag below the 50 day EMA (20.07) after dropping hard through that level to start October. It has rallied back to test the past three weeks, but on very low volume. Looks like the kiss goodbye before it heads back lower as money flow continues to dive lower below the price.
Volume: 195.086K Avg Volume: 254.856K
BUY POINT: $19.61 Volume=383K Target=$18.05 Stop=$19.92
POSITION: LKT WD - Nov. $20p (-48 delta)
http://www.investmenthouse.com/ct/netl.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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