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Begin part 3 of 3
THE PLAYS
Good movers: BMRN; DIOD; OXPS
Strong plays:
1) BABY: Excellent volume surge the past week.
2) PDLI: Starting higher on strong trade out of a nice base.
3) RADS: Ready to continue the breakout.
4) AQNT: Took a day off. Still ready.
5) MGI: Volume improving, ready to send it higher.
6) VTIV: Strong volume as it moves toward the breakout.
7) PDS: Gapped higher but reversed course on Friday.
NEW PLAYS:
Upside plays:
Play Date: 02/25/2006
BABY (Natus Medical--$18.95; +0.04; optionable): Medical appliances
http://biz.yahoo.com/p/b/baby.html
After Hours: $19
STATUS: Ascending base. Volume has surged the past week as BABY butts up against the breakout from a 16 week base formed above the 50 day EMA (17.75). Made a higher low at that 50 day support here in February, setting up the breakout to a new all-time high. Outstanding 6 to 2 accumulation in the base (6 up price weeks on rising volume to 2 down price weeks on rising volume) shows all buying, setting up the move to come. Super technical pattern, super growth in its sales and earnings.
Volume: 208.611K Avg Volume: 142.003K
BUY POINT: $19.25 Volume=213K Target=$23.12 Stop=$18.21
POSITION: QBU GW - July $17.50c (71 delta) &/or Stock
http://www.investmenthouse.com/ct/baby.html
Play Date: 02/25/2006
PDLI (Protein Design Labs--$30.89; +1.2; optionable): Biotechnology
http://biz.yahoo.com/p/p/pdli.html
After Hours: $30.85
STATUS: Ascending base. Solid shot of volume Friday as PDLI rallied toward the breakout from its 6 month base formed using the 50 day EMA (28.84) as support. That is the key level where institutions add to their positions; if they are still buyers a stock will hold at that level. That is what happened with PDLI. Its excellent 7 to 2 accumulation (7 up price weeks on rising volume to 2 down price weeks on rising volume) shows they have been buying during the consolidation. Ready for a new 4 year high. Solid across the board.
Volume: 1.594M Avg Volume: 1.296M
BUY POINT: $31.11 Volume=1.9M Target=$37.35 Stop=$29.24
POSITION: PQI HF - Aug. $30c (61 delta) &/or Stock
http://www.investmenthouse.com/ct/pdli.html
Play Date: 02/25/2006
PKE (Park Electrochemical--$29.34; +0.33; optionable): Printed circuit boards
http://biz.yahoo.com/p/p/pke.html
STATUS: Test breakout. PKE broke out in early January from a 5 month base formed right along the 50 day EMA (27.53) and it has formed a new uptrend since. It came back to test the 50 day EMA two weeks back, testing the breakout point. From there it rebounded solidly, capturing a new post-breakout high. It pulled back last week and then bounced on higher volume after tapping the 18 day EMA (28.50) on the intraday low. Looks ready to resume the move after this test and shakeout. Tremendous 8 to 1 accumulation shows heavy buying. That stronger volume test of the 18 day EMA and bounce Friday shows us it is ready to continue the breakout run.
Volume: 135.8K Avg Volume: 138.024K
BUY POINT: $29.62 Volume=185K Target=$35.55 Stop=$28.31
POSITION: PKE FF - June $30c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/pke.html
Play Date: 02/25/2006
RADS (Radian Systems--$14.60; +0.22; optionable): Site operations software for retail, food services businesses.
http://biz.yahoo.com/p/r/rads.html
STATUS: Ascending triangle. RADS has formed a short 6 week triangle as it consolidates the January breakout from a 6.5 month base. As the market sold off RADS used the selling to set up for the next move. It has done just that, showing outstanding 7 to 0 accumulation. Strong money flow complements the accumulation. Relative strength is ready to breakout again as well, a sign of continued strength. Strong technically and strong fundamentally as well.
Volume: 241.197K Avg Volume: 330.732K
BUY POINT: $14.89 Volume=496K Target=$17.95 Stop=$13.98
POSITION: QRC GC - July $15c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/rads.html
Downside:
Play Date: 02/25/2006
LTR (Loews Corp.--$93.35; -1.95; optionable): P&C insurance
http://biz.yahoo.com/p/l/ltr.html
STATUS: Put. Head and shoulders. LTR peaked in early January on low, low volume. When a stock makes a new high on low volume that shows a lack of support on the move, i.e. fewer buyers coming in. It cannot sustain such a move and the question becomes whether the sellers act to drive it lower. LTR drifted lower to end January and begin February, falling to the 'neckline' in the 16 week bearish pattern. It rebounded but could only make it back to the 10 day EMA (95.17). It struggled there and then started lower, rally dropping hard Friday. That pushed it through the bottom of the neckline on strong trade. That signals the break lower. We set our initial target for a conservative drop that will land us a 39%ish gain. With this kind of pattern, however, a stock typically falls the height of the pattern, and that would be about $6. If it continues down with a hard drop we will let it fall but will also look to take some gain along the way.
Volume: 1.789M Avg Volume: 557.158K
BUY POINT: $93.15 Volume=600K Target=$90.85 Stop=$94.05
POSITION: LTR PS - Apr. $95p (-39 delta)
http://www.investmenthouse.com/ct/ltr.html
CONTINUING PLAYS
Play Date: 02/23/2006
AQNT (Aquantive--$27.49; +0.11; optionable): Digital marketing services
http://biz.yahoo.com/p/a/aqnt.html
STATUS: Test 50 day EMA. Took the day off Friday, showing a doji as it held flat on lower, below average volume. Still a very sweet stock and pattern. To recap: AQNT is working laterally in a range over the past 13 weeks, trading around the 50 day EMA (25.84). This week it tested again on low volume and jumped higher Thursday on very strong trade. Showing some big upside volume spiked the past two weeks, and that indicates buying. The pattern is similar to a head and shoulders, and that is not positive, but the action shows accumulation; indeed it is 3 to 1 since January (3 up price weeks on rising volume to 1 down price weeks on rising volume). Money flow is surging higher. Looking for AQNT to power through the 28 shoulder tops on strong volume to start the play. A top ranked stock in earnings and sales growth.
Volume: 1.043M Avg Volume: 1.223M
BUY POINT: $28.11 Volume=1.8M Target=$33.75 Stop=$26.25
POSITION: QBT FE - June $25c (69 delta) &/or Stock
http://www.investmenthouse.com/ct/aqnt.html
Play Date: 02/11/2006
CVD (Covance--$56.61; -0.1; optionable): Drug product development services
http://biz.yahoo.com/p/c/cvd.html
STATUS: Breakout test. A full test of the 18 day EMA (56.24) once more, but on low trade, making a higher low, and showing a very tight doji Friday on a jump in volume. Looks like a good combination to send CVD back up on the continued breakout move. To recap: Broke out from a 20 week cup with handle base in January and surged to 58. It has since tested the 18 day EMA, rebounded on low trade, and then tested the 10 day EMA, all on low volume. Strong money flow and a market leader.
Volume: 428.1K Avg Volume: 423.411K
BUY POINT: New: $57.05 (orig. $56.11) Volume=643K Target=$64.95 Stop=$54.95
POSITION: CVD HK - Aug. $55c (53 delta) &/or Stock
http://www.investmenthouse.com/ct/cvd.html
Play Date: 02/22/2006
MGI (Moneygram Intl.--$28.21; +0.43; no options): Payment handling
http://biz.yahoo.com/p/m/mgi.html
STATUS: Double bottom w/handle. Volume jumped Wednesday as MGI started bumping a new breakout to a new all-time high. Volume faded into the weekend even as MGI moved higher again Friday after a Thursday pause. Just looking for a bit more trade as it continues higher to move into the play. To recap: A new issue in July 2005, MGI is moving through its second base, an 11 week base formed over the 50 day EMA (26.70). Excellent 4 to 0 accumulation in the base (4 up price weeks on rising volume to 0 down price weeks on rising volume) shows all buying, setting up the breakout move to a new all-time high. Strong money flow is surging and relative strength is ready to deliver the breakout move as well. Volume jumped Wednesday as MGI started the move. Looking to enter on a further gain on solid volume. Strong fundamentals to go with the technical pattern. Love new, strong issues.
Volume: 268K Avg Volume: 397.51K
BUY POINT: $28.25 Volume=550K Target=$33.75 Stop=$27.22
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/mgi.html
Play Date: 02/15/2006
MYOG (Myogen--$39.95; +0.82; optionable): Drugs
http://biz.yahoo.com/p/m/myog.html
STATUS: Test 18 day EMA. Making the second test of the 18 day EMA (38.01) after the mid-December breakout from a 15 week flat base. Volume spiked a week back but then dropped off to a trickle as MYOG continued laterally over the 10 day EMA (38.75). Friday it stretched up to the buy point but volume did not follow. Just need to see some volume as it continues higher.
Volume: 507.868K Avg Volume: 1.252M
BUY POINT: New: $40.12 (orig. $39.68) Volume=1.8M Target=$47.75 Stop=$37.21
POSITION: QJV FH - June $40c (51 delta) &/or Stock
http://www.investmenthouse.com/ct/myog.html
Play Date: 02/14/2006
RVSN (Radvision--$20.09; -0.08; optionable): Telecom processing systems
http://biz.yahoo.com/p/r/rvsn.html
STATUS: Test breakout. Still working laterally over the 10 day EMA (19.97), moving in a tight range on low volume, setting up for the next strong surge from this strong stock. Just needs to show some volume as it makes the next move. To recap: RVSN held the 10 day EMA the past week, tapping at that level intraday and then rebounding to the close. It is showing great strength on this shallow test after that strong break higher two weeks back on a strong earnings report. With money flow still moving higher ahead of price we anticipate RVSN is going to follow it soon.
Volume: 89.507K Avg Volume: 394.168K
BUY POINT: New: $20.57 (orig. $20.22) Volume=500K Target=$22.32 Stop=$19.22
POSITION: RJU FD - June $20c (53 delta) &/or Stock
http://www.investmenthouse.com/ct/rvsn.html
Play Date: 02/08/2006
VTIV (Ventiv Health--$27.31; +1.20; optionable): Outsourced sales, marketing solutions for pharma, biotech, etc.
http://biz.yahoo.com/p/v/vtiv.html
STATUS: Reverse head and shoulders. Volume finally jumped Friday as VTIV tapped the 50 day EMA (25.89) on the low and then surged toward the breakout from its 20 week base. Strong money flow is surging ahead of price and VTIV is ready to follow it higher with the strength of the Friday move. A breakout takes VTIV to a new all-time high. Huge 6 to 1 accumulation has set up the breakout move.
Volume: 318.117K Avg Volume: 307.971K
BUY POINT: $27.85 Volume=614K Target=$32.65 Stop=$26.28
POSITION: QBP GY - July $27.50c (55 delta) &/or Stock
http://www.investmenthouse.com/ct/vtiv.html
Downside:
Play Date: 02/22/2006
PDS (Precision Drilling--$31.69; -0.01; optionable): Oil and gas service company
http://biz.yahoo.com/p/p/pds.html
STATUS: Test 50 day EMA. Gapped higher Friday, clearing the 50 day EMA (32.15) on the move. That did not last as PDS tumbled back down for a modest loss, closing at the 10 day EMA (31.61). That looks to have completed a right shoulder in a 12 week head and shoulders pattern. Looking for a volume move lower this week through the buy point. To recap: PDS double topped in January, the second top on low volume. It broke down this month, falling through the 50 day EMA and then spent the past week building back up to that level. Looking for PDS to fail here and want to see some volume as it does. A move to the target lands us a 49%ish gain.
Volume: 614.7K Avg Volume: 544.813K
BUY POINT: $31.48 Volume=550K Target=$30 Stop=$31.75
POSITION: PDS PF - Apr. $30p (-33 delta)
http://www.investmenthouse.com/ct/pds.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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