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Begin part 3 of 3
THE PLAYS
Good movers: ACN; ADBE; BRCM; FLSH; GRP; LUK; MSTR; SNDK; STJ; VSEA; RMD
Strong plays:
1) CMED: Strong new issue.
2) NDAQ: Has tested a strong move and is starting back up.
3) TIE: Can really motor when it gets going.
4) CTSH: Didn't get the volume last week; looking for the rotation to bring it in this week.
5) GPRO: Nice doji at the 10 day EMA, setting it up for the breakout.
NEW PLAYS:
Upside plays:
Play Date: 01/07/2006
CMED (China Medical Technologies--$36.31; -0.78; optionable): Products for treatment of solid cancers and benign tumors
http://biz.yahoo.com/p/c/cmed.html
After Hours: $36.31
STATUS: Cup w/handle. A new issue in August, CMED has set up its second base, using the 18 day EMA (33.77) as support. A neat little 6 week pattern sporting great 3 to 1 accumulation (3 up price weeks on rising volume to 1 down price weeks on rising volume) and surging money flow. Strong fundamentals match the great pattern. A new issue that has a lot of gains ahead of it. After a bit more lateral move this week it will be ready for the next leg higher. Not much more to say about it, but we think this is going to be a big winner for us.
Volume: 692.501K Avg Volume: 792.533K
BUY POINT: $37.65 Volume=1.2M Target=$45.25 Stop=$35.48
POSITION: QCY FH - June $40c (50 delta) &/or Stock
http://www.investmenthouse.com/ct/cmed.html
Play Date: 01/07/2006
MCRS (Micros System--$51.35; +1.87; optionable): Technical and system software
http://biz.yahoo.com/p/m/mcrs.html
STATUS: Test 50 day EMA. After splitting in February, MCRS rallied into June and then formed the current 6 month double bottom with handle base. It broke out in early December but then was caught in the selling, fading back to the 50 day EMA (48.21), holding that level for a week, and then rebounding Friday on a strong shot of rising, above average volume. Strong 9 to 5 accumulation in the base (9 up price weeks on rising volume to 5 down price weeks on rising volume) shows the buying necessary to set up a breakout and run higher. Excellent money flow is surging higher, complementing the accumulation. A market leader ready for a new all-time high. We are ready to start the play on a move through the buy point and will look to add when MCRS tests that move.
Volume: 480.52K Avg Volume: 258.934K
BUY POINT: $51.75 Volume=350K Target=$59.55 Stop=$49.05
POSITION: MFK FJ - June $50c (58 delta) &/or Stock
http://www.investmenthouse.com/ct/mcrs.html
Play Date: 01/07/2006
NDAQ (Nasdaq Stock Market--$39.83; +2.88; optionable): Securities listing, trading, etc.
http://biz.yahoo.com/p/n/ndaq.html
After Hours: $39.80
STATUS: Test 50 day EMA. Made us some great money in 2005 on its run, and now setting up for the next run to make us more money. After a strong run from April to November, peaking at 45 and then coming back to test the 50 day EMA (35.97) the past 6 weeks, holding that level and moving laterally the past two weeks. That set it up for the break higher, and Friday NDAQ surged off that support on very strong volume. Great run, great consolidation on low volume, holding key support, and now starting the next run with a powerful move. Can rip off a lot of real estate, and ready to do it again.
Volume: 3.134M Avg Volume: 1.444M
BUY POINT: $40.25 Volume=1.6M Target=$48.35 Stop=$38.45
POSITION: NQD FH - June $40c (58 delta) &/or Stock
http://www.investmenthouse.com/ct/ndaq.html
Play Date: 01/07/2006
RVSN (Radvision--$17; -0.07; optionable): Voice, video, data communications products
http://biz.yahoo.com/p/r/rvsn.html
STATUS: Breakout test. In November RVSN broke out from a 10 month double bottom base. Gapping higher and surging on strong volume. It ran to 18 on the breakout move and then spent December and the first week of 2006 pulling back to near support at the 18 day EMA (16.91) on low, below average volume. Very nice, orderly test, then showing volume bounce last week as with the rest of the market. That often precedes a break higher, and with money flow running higher and higher as RVSN makes this test, it looks as if RVSN is going to make its move this week. Ready for a 5 year high. The 9 to 7 accumulation
Volume: 313.236K Avg Volume: 313.689K
BUY POINT: $17.45 Volume=471K Target=$20.95 Stop=$16.57
POSITION: RJU FW - June $17.50c (53 delta) &/or Stock
http://www.investmenthouse.com/ct/rvsn.html
Play Date: 01/07/2006
TIE (Titanium Metals--$73.24; +3.24; optionable): Industrial metals
http://biz.yahoo.com/p/t/tie.html
After Hours: $73.50
STATUS: Double bottom w/handle. Strong run in 2005 from this strong market leader in both fundamentals and technical pattern. After that move it slipped into the current 4 week pattern that formed over the 18 day EMA (67.09). Nice low volume consolidation and then a break higher this week on solid trade. Positive accumulation in the little base and starting back up. Can eat up large chunks of ground each day, and it looks to have started the next leg.
Volume: 933.1K Avg Volume: 825.973K
BUY POINT: $73.89 Volume=1.2M Target=$84.95 Stop=$71.44
POSITION: TIE CO - Mar. $75c (50 delta) &/or Stock
http://www.investmenthouse.com/ct/tie.html
CONTINUING PLAYS
Play Date: 01/04/2006
BCRX (Biocryst Pharma--$18.05; +0.22; optionable): Biotechnology (bird flu drug)
http://biz.yahoo.com/p/b/bcrx.html
After Hours: $18.16
STATUS: Cup w/handle. Volume did not run higher on BCRX last week as it did with many stocks, and that kept BCRX from making the breakout move. It tried, but without any volume it faded right back. Still set up well for the move higher, and with money rotating around the market, this week looks to be BCRX' week. To recap: Broke out from a 9 week cup with handle base in the last week of December and has moved laterally since, coming back to test the 10 day EMA (17.21). That sparked the next move and BCRX was up solidly Wednesday but still on below average volume. Solid 3 to 1 accumulation in the base (3 up price weeks on rising volume to 1 down price weeks on rising volume) shows the buying that set up the break. Now we just need to see some volume as BCRX continues the move higher, breaking to a new 5 year high.
Volume: 921.288K Avg Volume: 4.562M
BUY POINT: $18.32 Volume=4.5M Target=$22.65 Stop=$17.08
POSITION: BIU FC - June $17.50c (59 delta) &/or Stock
http://www.investmenthouse.com/ct/bcrx.html
Play Date: 01/04/2006
BDX (Becton Dickinson--$62.05; +1.13; optionable): Medical supplies, lab equipment, diagnostic products
http://biz.yahoo.com/p/b/bdx.html
STATUS: Test breakout. Rallied through the buy point Friday, but did not have strong enough volume to get us in on the move. If it can show us more trade to start this week we will look to start the play. To recap: BDX broke out from a 30 week double bottom with handle base in mid-December. It came back for a quick test, reaching down to the 18 day EMA (60.13) on the Tuesday low and the rebounding for a gain on a surge in volume. Strong money flow is surging higher ahead of price. Nice breakout test, and after the first test a stock can really put on the gains.
Volume: 713K Avg Volume: 1.002M
BUY POINT: New: $62.27 (orig. $61.72) Volume=1.5M Target=$70.97 Stop=$59.75
POSITION: BDX FL - June $60c (64 delta) &/or Stock
http://www.investmenthouse.com/ct/bdx.html
Play Date: 01/03/2006
CTSH (Cognizant Technology--$50.98; +0.31; optionable): Software
http://biz.yahoo.com/p/c/ctsh.html
After Hours: $51.01
STATUS: Test breakout. Nice test of the 18 day EMA (50.43) as well as support at 50 last week, but CTSH did not get the volume the rest of the market enjoyed, so it did not make the strong break higher to continue the breakout move. With money rotating around this market, we anticipate that will come this week, giving us our entry point on this strong stock as it makes a move to a new all-time high. To recap: This looks to be the consummation of the test of the mid-December breakout from an 18 week double bottom with handle base. This excellent pattern that is setting CTSH up for a new all-time high. Solid market leader with strong fundamentals to match its strong technical pattern.
Volume: 1.375M Avg Volume: 1.506M
BUY POINT: $51.11 Volume=2M Target=$58.95 Stop=$49.89
POSITION: UPU DJ - Apr. $50c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/ctsh.html
Play Date: 01/04/2006
GPRO (Gen Probe--$49.50; -0.22; optionable): Nucleic acid probe-based products for diagnosis
http://biz.yahoo.com/p/g/gpro.html
STATUS: Ascending triangle. Strong volume early in the week and then it tailed off to close it out. That kept GPRO from making its breakout move, but it also left it set up very well for the break higher this week. Nice low volume doji over the 10 day EMA (49.04) Friday leaves it in good position to launch, and with money rotating around the market, we anticipate GPRO getting its share this week. To recap: GPRO is tapping at the breakout to its 8.5 month base. Excellent 11 to 4 accumulation in the pattern shows strong buying, setting up the breakout move. Top rated stock in fundamentals and technical pattern. Looking for continued volume as GPRO makes the breakout move from a nicely formed base.
Volume: 296.234K Avg Volume: 468.932K
BUY POINT: $50.45 Volume=699K Target=$58.95 Stop=$48.57
POSITION: PSU EJ - May $50c (51 delta) &/or Stock
http://www.investmenthouse.com/ct/gpro.html
Play Date: 12/28/2005
RL (Ralph Lauren--$56.47; +0.24; optionable): Polo clothing, etc.
http://biz.yahoo.com/p/r/rl.html
STATUS: Breakout test. RL is testing the breakout, but it refuses to give back any gains, working laterally over the 10 day EMA (55.69) in a very narrow range. That stinginess is a good sign of a strong stock that will resume its move. Just being patient and letting it show us the continuation of the breakout. To recap: Still in the very nice, easy test of the mid-December breakout to a new all-time high. This test follows a breakout from a base on base pattern that spanned August to mid-December. Positive accumulation goes hand in hand with strong money flow. A top rated stock in earnings and technical pattern, a nice bonus as RL sets up for the move higher that continues the breakout run.
Volume: 587.3K Avg Volume: 723.938K
BUY POINT: $56.95 Volume=1M Target=$65.95 Stop=$54.48
POSITION: RL DK - Apr. $55c (64 delta) &/or Stock
http://www.investmenthouse.com/ct/rl.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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