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Begin part 3 of 3
THE PLAYS
Good movers: IVAC; MRVL; OTIV; OVTI; PETS; RATE
Wednesday night play results:
PETS: Nice move on solid volume.
PSSI: Testing a bit lower to the 18 day EMA
MCHP: Sagged to the 18 day EMA but volume remained light.
MGI: Surged higher but gave back all of the gain
NVDA: Managed to hold the 18 day EMA on the close as it continues working laterally
RATE: Nice volume surge as RATE moves off the 18 day EMA.
SIMO: Strong volume as SIMO moved higher but gave back half the gain in the afternoon market selling.
New Plays:
Upside:
Play Date: 02/09/2006
PARL (Parlux Frangrances--$33.46; -1.29; no options): Fragrances
http://biz.yahoo.com/p/p/parl.html
STATUS: Breakout test. Reported strong earnings Wednesday and PARL broke out from its 23 week cup with handle base on very strong volume. Strong 7 to 3 accumulation in the base (7 up price weeks on rising volume to 3 down price weeks on rising volume) shows strong buying as it set up for the breakout move. A market leader with strong money flow to complement the accumulation, not to mention the strong fundamentals. After that big breakout it tested Thursday on lower volume. Going to let it make the test and then grab it as it rebounds back up.
Volume: 1.002M Avg Volume: 295.548K
BUY POINT: $34.35 Volume=443K Target=$41 Stop=$32.05
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/parl.html
Downside:
Play Date: 02/09/2006
TYC (Tyco Intl.--$25.39; +0.11; optionable): Jack of all trades
http://biz.yahoo.com/p/t/tyc.html
After Hours: $25.38
STATUS: Put. TYC was starting to rally to end 2005, working on the right side of a long 12 month base. It ran into a brick wall and gapped hard to the downside, falling through the 200 day and 50 day EMA. It rebounded to the 10 day EMA (25.61) and fell on strong volume, and now has rebounded to that level again on low volume. A stock will make 4 to 5 of these trips as it makes a down leg. Looking for it to turn down and continue lower from here. A trip to the target lands us a 55%ish gain.
Volume: 12.242M Avg Volume: 13.507M
BUY POINT: $24.94 Volume=14M Target=$23.91 Stop=$25.32
POSITION: TYC OE - Mar. $25p (-38 delta)
http://www.investmenthouse.com/cd/tyc.html
Continuing plays ready to move:
Play Date: 02/04/2006
EMAG (Emageon--$18.5; +0.15; no options): ITS solutions for digital medical images for healthcare providers
http://biz.yahoo.com/p/e/emag.html
After Hours: $18.37
STATUS: Flying plateau. Volume jumped up toward average after more than a week of very low trade, and EMAG jumped up to 19.30. It could not hold the move, however, fading with the market in the afternoon selling. That did not change the pattern as it continues to hold above the 10 day EMA (18.15). This has the look that it is ready to resume the move. To recap: EMAG is moving in a tight lateral range the past week, using the market weakness to consolidate the late January breakout from its 9.5 month cup with handle base. Strong 14 to 7 accumulation shows lots of buying as EMAG prepared for the breakout. It made strong move in January, following the surging money flow. Love the way it is holding onto its gains as the market weakened. Low volume and tight range shows no sellers, and it is just biding its time before it moves higher once more.
Volume: 311.814K Avg Volume: 293.638K
BUY POINT: $18.72 Volume=325K Target=$22.45 Stop=$17.81
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/emag.html
Play Date: 02/04/2006
KNOT (The Knot--$14.71; +0.74; no options): Wedding media and services
http://biz.yahoo.com/p/k/knot.html
STATUS: Breakout test. KNOT reported some solid results that gapped it higher on strong, above average volume. It rallied to 15.29 on the high but gave back about half of the move. Given the gap and the move back from the high we decided to wait and see how it responds Friday. Looks very solid with a relative strength breakout, and if it moves up from here we will be ready to start the play. To recap: KNOT broke out from an 11 week double bottom base in mid-January on strong volume and surged to 14.88. It tested that breakout in the market selling, holding above the 18 day EMA (13.66) on the lows, trading on below average volume. This move took the stock to a new all-time high and it needed a breather. Solid 4 to 2 accumulation in the base and surging money flow. Solid fundamental growth to go with the technical pattern.
Volume: 225.567K Avg Volume: 143.819K
BUY POINT: New: $14.95 (orig. $14.35) Volume=210K Target=$17.25 Stop=$13.35
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/knot.html
SUBSCRIBER PORTFOLIO: These are stocks subscribers suggest by vote that we put in a portfolio to track and move into the stocks if they perform well. If you have any suggestions for additions or deletions, email us. We don't cover them all each report, just when something interesting is developing.
AAPL, CELG, BR, COH, NVDA, PSYS, RTSX, STN, UNH
AAPL: It indeed lost the rebound momentum and started down again on strong volume.
RTSX: Made it up to the 50 day EMA before reversing, giving it all back plus another dollar.
STN: Some better earnings from others in the sector is helping it out. If the economy is turning weaker the gamers will do better.
Good Investing!
Jon L. Johnson and The Daily Staff
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 of 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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