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Begin part 3 of 3
THE PLAYS
Good movers: BRCM; ENER
Strong plays:
1) FSL: Nice test back has set it up for the breakout move.
2) VAR: Strong move off the 50 day EMA is starting the next leg.
3) CRM: Still in the nice test.
4) CTXS: Excellent test has set it up for the continued run higher.
5) NDAQ: Has the test and is now ready to resume.
NEW PLAYS:
Upside plays:
Play Date: 01/11/2006
CKCM (Click Commerce--$25.71; +1.08; optionable): Commerce and compliance automation software.
http://biz.yahoo.com/p/c/ckcm.html
After Hours: $25.71
STATUS: Double bottom w/handle. Solid volume the past week as CKCM comes off the lows in its handle, moving through the 50 day EMA (22.26) last week and stretching the move Wednesday. Nice base that is setting up to break to a new 4 year high, using the key 200 day SMA (19.99) as support on the pattern lows. Solid 6 to 3 accumulation shows plenty of buying to send it higher. On a move through the buy point we are going to look at a partial position. After the break over 27.50 we will wait for the test, and when CKCM comes back, holds, and then rebounds, that is when we move in. Solid stock with great fundamentals.
Volume: 559.34K Avg Volume: 498.592K
BUY POINT: $26.31 Volume=748K Target=$31.62 Stop=$25.21
POSITION: QCP FE - June $25c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/ckcm.html
Play Date: 01/11/2006
FSL (Freescale Semiconductor--$26.94; +0.03; optionable): Semiconductors
http://biz.yahoo.com/p/f/fsl.html
STATUS: Breakout test. This is MOT's semiconductor spin-off. It broke higher in November, moving out of a 13 week double bottom base. It rallied to 27 and then spent the last 8 weeks trading in a range from 25 to 28. FSL bounced higher to start the year as did many stocks, rallying on strong volume. It stalled out just below 28 but looks to be making a higher low here at 27. Stocks in a trading range will often make a higher low in the range before the breakout. Solid accumulation, strong money flow, and a leader in its group. Ready for a new all-time high on the breakout move.
Volume: 1.938M Avg Volume: 1.899M
BUY POINT: $27.48 Volume=2.8M Target=$32.95 Stop=$26.31
POSITION: FSL FE - June $25c (69 delta) &/or Stock
http://www.investmenthouse.com/ct/fsl.html
Play Date: 01/11/2006
MOT (Motorola--$23.92; -0.06; optionable): Telecom equipment
http://biz.yahoo.com/p/m/mot.html
After Hours: $24.10
STATUS: Ascending base. With FSL, why not MOT? It is producing some great equipment, and it is setting up to make the breakout to a 5 year high when it clears the current 16 week base. It has move dup the 50 day EMA (23.08) the past month, using that level as support. A strong break higher last week and it is now coming back to test the 10 day EMA (23.68). When it makes a higher low here it will likely turn back up for the breakout. In the very big picture, MOT broke out from a 4.5 year reverse head and shoulders base in July 2005, and this is its first consolidation of that big picture move. Looking for continued strong volume as it comes off this test of the 10 day EMA.
Volume: 19.573M Avg Volume: 18.412M
BUY POINT: $24.77 Volume=25M Target=$28.95 Stop=$23.55
POSITION: MOT DX - Apr. $22.50c (62 delta) &/or Stock
http://www.investmenthouse.com/ct/mot.html
Play Date: 01/11/2006
VAR (Varian Medical Systems--$52.69; +2.13; optionable): Medical appliances
http://biz.yahoo.com/p/v/var.html
STATUS: Test 50 day EMA. VAR is starting up off the 50 day EMA (49.10) Monday, but the volume finally started to surge Wednesday as VAR really made a move. This looks to be the continuation of the October breakout from a 10 month base. Strong run up the 10 and 18 day EMA (now at 50.58) and then a needed test of the 50 day to rest, regroup, and prepare for the next run. Strong stocks will shows this same action and then continue the run from here. The volume Wednesday suggests VAR is going to do that. It can really put in the mileage when it gets going, and we like the nice, steady moves it makes. Excellent money flow and relative strength ready for the breakout. Solid stock and a solid move getting underway.
Volume: 1.474M Avg Volume: 1.007M
BUY POINT: $52.95 Volume=1.2M Target=$60.95 Stop=$50.55
POSITION: VAR EJ - May $50c (67 delta) &/or Stock
http://www.investmenthouse.com/ct/var.html
CONTINUING PLAYS
Play Date: 01/10/2006
CRM (Salesforce.com--$38.27; +0.02; optionable): On demand customer relationship management services
http://biz.yahoo.com/p/c/crm.html
After Hours: $38.55
STATUS: Breakout test. Still testing the nice gap higher last week. Edged higher Wednesday but volume faded and it closed basically flat. Still ready to go and just being patient while it rests. To recap: CRM gapped higher Friday on an analyst upgrade. That move extended a nice surge off the 50 day EMA (32.13) to start the year after a three week pullback to that level. CRM has come back to test that move, dropping to the 10 day EMA (36.64) intraday to fill the gap and then rebounding to recoup most of the loss. Nice quick fill of the gap and looking for this strong stock to continue higher. Excellent money flow and a relative strength breakout on the move.
Volume: 1.966M Avg Volume: 1.602M
BUY POINT: $38.65 Volume=2.4M Target=$45.95 Stop=$36.87
POSITION: CRM EG - May $35c (68 delta) &/or Stock
http://www.investmenthouse.com/ct/crm.html
Play Date: 01/04/2006
CTXS (Citrix Systems--$29.58; +0.09; optionable): Access infrastructure software
http://biz.yahoo.com/p/c/ctxs.html
After Hours: $29.59
STATUS: Test breakout. Nice doji at the 10 day EMA (29.44) Wednesday on lower, below average volume is setting up the rebound from this excellent test. Looks ready. To recap: Testing the mid-December breakout from a nice 7 week flat base sporting positive 2 to 0 accumulation (2 up price weeks on rising volume to 0 down price weeks on rising volume). This follows the breakout from a longer 11 month base. A top rated stock in fundamentals and technical pattern. Looking to start the play on a further move higher.
Volume: 1.425M Avg Volume: 1.92M
BUY POINT: $29.88 Volume=2.2M Target=$35.95 Stop=$29.05
POSITION: XSQ FF - June $30c (52 delta) &/or Stock
http://www.investmenthouse.com/ct/ctxs.html
Play Date: 01/09/2006
GENZ (Genzyme--$73.76; -0.65; optionable): Biotechnology
http://biz.yahoo.com/p/g/genz.html
After Hours: $73.82
STATUS: Double bottom. Got the dips Tuesday and Wednesday, but is still holding the pattern, coming to rest Wednesday on the 10 day EMA (73.65) at the close. Still a good pattern but will have to show us the strong break higher to start the play. To recap: GENZ has formed a 7 week double bottom near the 50 day EMA (73.04), and that pattern formed on the heels of a larger 14 week double bottom, making a nice base-on-base pattern where the sellers are really weeded out. Solid 7 to 4 accumulation in the bases shows solid buying during the consolidation. Nice money flow complements the accumulation as GENZ sets up for the breakout to a new all-time high. Looking for volume to continue as GENZ continues running higher and shows us the breakout.
Volume: 2.1M Avg Volume: 2.165M
BUY POINT: $75.48 Volume=3.2M Target=$85.95 Stop=$73.38
POSITION: GAA DO - Apr. $75c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/genz.html
Play Date: 01/07/2006
NDAQ (Nasdaq Stock Market--$38.89; +0.62; optionable): Securities listing, trading, etc.
http://biz.yahoo.com/p/n/ndaq.html
After Hours: $38.81
STATUS: Test 50 day EMA. NDAQ is already making its pullback even as NASDAQ 100 makes a sprint on top of the already strong run. It has eased back to the 10 day EMA (37.96) on lower volume, holding that level Wednesday and rebounding for a modest gain. Nice test and getting ready for the breakout move. To recap: 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 the past 6 weeks, holding that level and moving laterally the past two weeks. It broke higher and is now making a second test. 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: 960.398K Avg Volume: 1.459M
BUY POINT: $39.45 Volume=1.6M Target=$48.35 Stop=$37.64
POSITION: NQD FH - June $40c (58 delta) &/or Stock
http://www.investmenthouse.com/ct/ndaq.html
Play Date: 12/28/2005
RL (Ralph Lauren--$56.66; -0.06; optionable): Polo clothing, etc.
http://biz.yahoo.com/p/r/rl.html
STATUS: Breakout test. Tried the break higher Wednesday, reaching to 57.65 on the high on stronger, average volume, but it could not hold the move. It gave it all back by the close, keeping RL in the tight lateral range of the past two weeks. May have simply been a dry run. To recap: 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: 621.4K Avg Volume: 704.889K
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
Play Date: 01/07/2006
TIE (Titanium Metals--$73.16; -0.83; optionable): Industrial metals
http://biz.yahoo.com/p/t/tie.html
STATUS: Double bottom w/handle. Tried to make the move Monday, but then faded back Tuesday and Wednesday, forming a much better handle to its short base. Holding up very well as it prepares for the breakout move to new all-time high. To recap: 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 (68.99). 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: 737.2K Avg Volume: 836.627K
BUY POINT: $73.89. Has tested 73 and is now ready to rebound. 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
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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