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trade stock, stock recommendation
Begin part 3 of 3
THE PLAYS
Good movers: AQNT; CWTR; MACR; SPIL; WBSN
Strong plays:
1) BRCM: Excellent recovery, showing solid volume as it breaks higher.
2) GLW: Very nice base has formed.
3) MCRS: Breaking higher on solid trade.
4) LUK: Nice pullback to test the breakout run.
5) RIO: Ready to make a nice run.
NEW PLAYS:
Upside plays:
Play Date: 12/03/2005
BRCM (Broadcom--$48.77; +1.18; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/b/brcm.html
After Hours: $48.72
STATUS: Cup w/handle. BRCM is breaking out from a 9 week base formed using the 50 day EMA (45.18) as support. Has moved to a 4 year high and looking for more. Solid 4 to 2 accumulation in the base (4 up price weeks on rising volume to 2 down price weeks on rising volume) shows net buying by the big money, setting up the breakout and run. Good move Friday on below average volume. Looking for more trade as it continues higher to step in and take positions. Nice leader ready to run into the close of the year.
Volume: 8.194M Avg Volume: 8.025M
BUY POINT: $49.12 Volume=10M Target=$56.95 Stop=$46.55
POSITION: RCQ EJ - May $50c (53 delta) &/or Stock
http://www.investmenthouse.com/ct/brcm.html
Play Date: 12/03/2005
GLW (Corning--$20.85; +0.46; optionable): Telecom equipment
http://biz.yahoo.com/p/g/glw.html
After Hours: $20.90
STATUS: Cup w/handle. Nice 12 week pattern has formed up around the 50 day EMA (19.76), forming the handle the past three weeks, tapping at the 50 day EMA, rallying, and then coming back to the 18 day EMA (20.37) last week, making a higher low. Volume jumped back up to average the last half of the week as GLW held the 18 day and bounced modestly. Positive 2 to 1 accumulation shows net buying in this nice little base. Looking for that volume to continue this week and blast GLW higher into its breakout to a 4.5 year high.
Volume: 9.21M Avg Volume: 11.501M
BUY POINT: $21.22 Volume=17M Target=$24.25 Stop=$20.21
POSITION: GLW ED - May $20c (64 delta) &/or Stock
http://www.investmenthouse.com/ct/glw.html
Play Date: 12/03/2005
MCRS (Micros System--$50.20; +1.14; optionable): Information solutions for hospitality & specialty retail industries
http://biz.yahoo.com/p/m/mcrs.html
After Hours: $50.20
STATUS: Double bottom w/handle. Starting the breakout move from a 22 week base, moving higher to end the week on rising volume Thursday and Friday. Not spectacular trade, but a real volume swell the past week. This move is taking MCRS to a new all-time high, powered by positive accumulation and strong money flow. Relative strength is ready to breakout as well, a good corroboration of the price move when it happens. Top fundamentals to go with the very nice pattern.
Volume: 287.986K Avg Volume: 280.009K
BUY POINT: $50.35 Volume=365K Target=$57.55 Stop=$47.88
POSITION: MFK CJ - Mar. $50c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/mcrs.html
Play Date: 12/03/2005
VSEA (Varian Semiconductor--$44.85; -0.7; optionable): Chip equipment.
http://biz.yahoo.com/p/v/vsea.html
After Hours: $44.83
STATUS: Double bottom w/handle. The pattern looks ragged, but a classice double bottom set up the past 14 weeks with the low in early November, the second leg lower, undercut the late September leg. That move below the prior leg shakes out (or in this case scares out) the bulk of the sellers. It then rebounded in November, stalling just below the hump near 45 and moving laterally and lower the past two weeks, easing back to the 18 day EMA (43.55) on the lows. It then jumped higher Thursday on rising, average volume, giving back some of the gain Friday. Positive accumulation as VSEA sets up for the breakout.
Volume: 883.078K Avg Volume: 808.112K
BUY POINT: $46.11 Volume=1.2M Target=$54 Stop=$43.78
POSITION: UES EI - May $45c (56 delta) &/or Stock
http://www.investmenthouse.com/ct/vsea.html
CONTINUING PLAYS
New buy point on a current play:
Play Date: 11/07/2005
LUK (Leucadia National--$47.40; -0.30; optionable): Telecom services
http://biz.yahoo.com/p/l/luk.html
STATUS: Breakout test. Nice breakout and run higher from LUK in early November, moving out of a 7 week cup with handle pattern and surging to 49.28. It has come back the past week to test the move, tapping at the 18 day EMA (46.70) on the Friday low and rebounding to hold near the 10 day EMA (47.45). Nice first test of the breakout, and we love to move in on the first test when the stock starts back up on strong volume as that shows continued buying by the big money. Strong money flow continues to lead higher and the strong 4 to 1 accumulation has built a solid foundation for the breakout and run. Looking for a hold near the 10 day EMA and then a rebound on above average volume.
Volume: 225.2K Avg Volume: 265.447K
BUY POINT: New positions: $48.12 (orig. positions: $44.86) Volume=300K Target=$56.95 Stop=$46.32
POSITION: LUK CJ - Mar. $50c (50 delta) &/or Stock
http://www.investmenthouse.com/ct/luk.html
Continuing plays, buy not issued:
Play Date: 11/30/2005
BOOM (Dynamic Materials--$24.15; -0.38; no options): Industrial metal cladding
http://biz.yahoo.com/p/b/boom.html
STATUS: Test 50 day EMA. Good volume move Wednesday and then a lighter volume fade to end the week, but still holding the 10 day EMA (23.68). That leaves BOOM set up to make a higher low and break higher once more this week. Got a bit wild to start November, recovered, and is ready to continue the break to the upside. To recap: BOOM broke out in early November, moving higher on strong volume out of a 12 week cup base. It surged to near 28 and then dove sharply lower on earnings that apparently were not strong enough. The stock held the 50 day EMA (22.19), however, moving laterally for two weeks. Last Wednesday it jumped off the consolidation on strong, above average volume. Accumulation during the base formation is a strong 4 to 1 (4 up price weeks on rising volume to 1 down price weeks on rising volume). Looking for continued strong volume as the move progresses.
Volume: 365.159K Avg Volume: 1.308M
BUY POINT: $24.75 Volume=2.1M Target=$29.75 Stop=$23.05
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/boom.html
Play Date: 11/19/2005
HSP (Hospira--$44.17; -0.13; optionable): Pharmaceutical and medication delivery
http://biz.yahoo.com/p/h/hsp.html
STATUS: Breakout test. Volume picked up Wednesday and Friday last week as HSP continued the lateral move along the 10 day EMA (44.11), consolidating the mid-November break higher. Like how it has held its gains and now the volume jumping up as that indicates it is just about ready to continue the move higher. To recap: HSP has spent 3 weeks in a flying plateau, a tight lateral move that follows a strong break higher. HSP broke out from a 9 week base two weeks back, moving to a new all-time high. Solid 4 to 2 accumulation (4 up price weeks on rising volume to 2 down price weeks on rising volume) shows net buying and complements the strong money flow. Ready to move in as it makes the break higher from this plateau on continued strong volume. A solid stock fundamentally and technically.
Volume: 583.8K Avg Volume: 552.739K
BUY POINT: $44.95 Volume=900K Target=$51.95 Stop=$43.05
POSITION: HSP BI - Feb. $45c (52 delta) &/or Stock
http://www.investmenthouse.com/ct/hsp.html
Play Date: 12/01/2005
ITRI (Itron--$47.21; -0.78; optionable): Scientific and technical instruments
http://biz.yahoo.com/p/i/itri.html
After Hours: $46.85
STATUS: Cup. ITRI tried the move Friday, running up to 49 on the high with improving volume, but then unable to hold the move over 48. There is some resistance within the pattern at that level, and we want to see a solid break through to start the play. To recap: ITRI is working on a 17 week base, forming up nicely the past three weeks, setting up an ascending triangle. Stocks often form this intermediate pattern while working on a larger base, and the breaks higher can be strong. A market leader that is setting up for a break to a new all-time high. Strong money flow and volume ramping up as it heads toward the breakout from the base within a base.
Volume: 451.069K Avg Volume: 404.283K
BUY POINT: $48.55 Volume=600K Target=$57.95 Stop=$46.15
POSITION: IUP EF - May $50c (49 delta) &/or Stock
http://www.investmenthouse.com/ct/itri.html
Play Date: 11/15/2005
MSTR (Microstrategy--$74.70; -0.92; optionable): Business intelligence software
http://biz.yahoo.com/p/m/mstr.html
After Hours: $74.75
STATUS: Cup w/handle. Fading back to test the 50 day EMA (73.55) in the handle on continued low volume, shaking out the last sellers and setting up for the breakout move. Solid 17 week base has formed over the 200 day SMA (64.76); a breakout takes it to a 4 year high. Moved the buy point lower to account for the further shakeout. Want to see strong volume as it continues higher and through the buy point. Can fly like the wind when it gets going in a breakout.
Volume: 228.032K Avg Volume: 349.428K
BUY POINT: $75.85 Volume=612K Target=$86.55 Stop=$74.25
POSITION: EOU DO - Apr. $75c (56 delta) &/or Stock
http://www.investmenthouse.com/ct/mstr.html
Play Date: 11/28/2005
RIO (Companhia Vale Do Rio Doce--$45.08; +0.14; optionable): Steel and iron
http://biz.yahoo.com/p/r/rio.html
STATUS: Ascending triangle. Good volume Thursday as RIO started the breakout move. Friday RIO gapped higher but gave most of the move back on lower volume, mirroring the rest of the market. Looks ready to get serious this week and continue the breakout move. To recap: RIO has formed a short 9 week base, using the 50 day EMA (41.36) as support as it makes higher and higher lows below a constant top at 45. That is building pressure from below, setting up the breakout move. Excellent 4 to 1 accumulation in the base (4 up price weeks on rising volume to 1 down price weeks on rising volume) shows great institutional buying continues.
Volume: 2.656M Avg Volume: 2.825M
BUY POINT: New: $45.45 (orig. $44.65) Volume=4.3M Target=$53.95 Stop=$42.65
POSITION: RIO CI - Mar. $45c (52 delta) &/or Stock
http://www.investmenthouse.com/ct/rio.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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