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us stock market, top stock pick
Begin part 3 of 3
THE PLAYS
Good movers: ALNY; GS; MSTR; RADS
Strong plays:
1) ASPV: Lots of momentum and volume is picking back up.
2) NETL: Strong leader easing back after a solid move higher.
3) ORCC: Nice easy test is setting up the next move.
4) SLAB: Nice set up for a new breakout.
5) WFT: Ready to make the breakout.
NEW PLAYS:
Upside plays:
Play Date: 03/04/2006
ASPV (Aspreva Pharma--$26.61; +0.94; optionable): Biotechnology
http://biz.yahoo.com/p/a/aspv.html
After Hours: $26.59
STATUS: Breakout test. ASPV blasted higher in January and really took off in early February, surging out of a 6 month base. After that strong move it needed a breather and it took it the past five weeks, forming a small cup with handle that used the 18 day EMA (24.92) on the low as support. It recovered and moved in a very tight, flat range the past two weeks on low volume, and then started higher Friday on strong trade. Strong 3 to 0 accumulation in the recent pattern, showing all buying as it consolidates the gain. Strong money flow is surging as well. Looking for that volume to continue as ASPV moves through the buy point. Solid fundamentals with its nice pattern.
Volume: 384.397K Avg Volume: 348.682K
BUY POINT: $27.25 Volume=523K Target=$32.75 Stop=$25.65
POSITION: QOS GE - July $25c (66 delta) &/or Stock
http://www.investmenthouse.com/ct/aspv.html
Play Date: 03/04/2006
NETL (Netlogic Microsystems--$37.76; -1.11; optionable): Semiconductor memory chips
http://biz.yahoo.com/p/n/netl.html
After Hours: $41.71
STATUS: Test breakout. NETL broke out from a short 5 week cup base on Thursday, completing a test of and rebound off the 50 day EMA (32.81), the level that acted as support during the short base. Positive accumulation and surging money flow. Volume jumped last week as NETL made the move off the 50 day EMA, another indication of strong buying in this market leader. Friday NETL eased back, starting the test of the strong run higher. It may come on back to test the 10 day EMA (36.08) before it is ready to continue the breakout move. This is a strong stock, however, and we want to be ready for when it turns back up on a solid volume shot. Again, a strong leader with strong fundamentals to match, and we want to pick it off as it rebounds. We will also look for positions quickly off the bounce if it tests the 10 day EMA.
Volume: 331.764K Avg Volume: 346.85K
BUY POINT: From the Friday close: $38.55. Test 36: $36.55 on the rebound. Volume=500K Target=$46 Stop=$36
POSITION: LKT GG - July $35c (80 delta) or LKT GH - July $40c (49 delta) &/or Stock
http://www.investmenthouse.com/ct/netl.html
Play Date: 03/04/2006
ORCC (Online Resources--$13.15; -0.06; no options): Outsourced internet financial technology services to financial service providers
http://biz.yahoo.com/p/o/orcc.html
After Hours: $13.21
STATUS: Cup w/handle. ORCC has formed a short but nice 6 week base on top of the 50 day EMA (12.56), this base forming right on the heels of the breakout from an 11 week base in January. Nice base on base pattern, and they really work to weed out the sellers and place the stock in the hands of strong holders. ORCC bounced off the 50 day EMA (12.56) Wednesday and then spent Thursday and Friday easing back toward the 10 day EMA (12.95), working on the final shakeout. Strong 4 to 0 accumulation shows all buying in the current base. Strong money flow is moving higher ahead of the price. May take another day or two to complete the pattern, but a solid leader with strong fundamentals ready to break to a 6 year high.
Volume: 135.426K Avg Volume: 132.562K
BUY POINT: $13.55 Volume=199K Target=$16.25 Stop=$12.85
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/orcc.html
Play Date: 03/04/2006
QUIK (Quicklogic--$5.07; +0.05; no options): Semiconductor integrated circuits
http://biz.yahoo.com/p/q/quik.html
STATUS: Double bottom w/handle. QUIK is in one of the hotter sub-sectors of the semiconductor sector, and it is working on a weeklong handle to its 8 week base that formed using the 50 day EMA (4.58) as support. Price/volume action is great; volume died off in February as QUIK bottomed over the 50 day EMA and then surged as it formed the right side of the base. It trailed off in the handle and then shot higher Friday as QUIK showed a doji, setting the stage for the breakout move. This base consolidates the January breakout from a 7 month cup with handle as well. QUIK is not what you would call a serious market leader, but its sector is hot and QUIK has set up well to give us a breakout and a really nice gain in short order.
Volume: 413.004K Avg Volume: 254.228K
BUY POINT: $5.29 Volume=360K Target=$6.48 Stop=$4.92
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/quik.html
Play Date: 03/04/2006
VTAL (Vital Images--$32.63; +0.40; optionable): Software for clinical diagnosis and disease screening.
http://biz.yahoo.com/p/v/vtal.html
STATUS: Test 18 day EMA. We said we would look at VTAL when it bottomed on this test, and Friday VTAL undercut the 18 day EMA (32.07) on the low (31.60), and rebounded to post a gain. Volume was still below average, but it was up on the move, indicating the buyers were coming back to the stock. Money flow continues to lead higher, and the action Friday indicates it is ready to continue the breakout move after the late January break higher. Solid 3:1 accumulation in that pattern.
Volume: 171.819K Avg Volume: 179.33K
BUY POINT: $32.98 Volume=269K Target=$39.55 Stop=$31.89
POSITION: HXQ GF - July $30c (59 delta) &/or Stock
http://www.investmenthouse.com/ct/vtal.html
New buy point on current position:
Play Date: 03/04/2006
MER (Merrill Lynch--$77.59; -0.09; optionable): Investment brokerage
http://biz.yahoo.com/p/m/mer.html
STATUS: Flying plateau. MER continues its march higher, taking a pause last week to refresh for the next move. It gapped higher Monday on an acquisition but then moved laterally all week in a tight, narrow range as the 10 day EMA (76.91) rose to meet it. Friday MER tapped that level on the low, showing a doji for the session, its third in a row. We are ready to move in with more positions as it breaks higher and clears this recent range.
Volume: 4.172M Avg Volume: 4.541M
BUY POINT: $78.25 Volume=6.5M Target=$88.95 Stop=$76.39
POSITION: MER GP - July $80c (51 delta) &/or Stock
http://www.investmenthouse.com/ct/mer.html
CONTINUING PLAYS
Play Date: 03/01/2006
SLAB (Silicon Labs--$49.96; +0.06; optionable): Semiconductors
http://biz.yahoo.com/p/s/slab.html
After Hours: $49.88
STATUS: Test 50 day EMA. Some good upside volume sessions last Wednesday and Friday as SLAB sets up the handle to its short 6 week base that has formed over the 50 day EMA (44.80). May take another day or two to finish the pattern, but looking very good here. To recap: SLAB gapped higher in late January on a strong earnings prognosis. It rallied to 52.50 and then faded back the past 5 weeks to test the move and fill most of the gap. It held mostly near the 18 day EMA (47.83), testing toward the 50 day EMA on an intraday basis and then rebounding. Strong money flow continues to lead higher. Accumulation is positive. Looking to move in on a continued move higher on solid volume.
Volume: 1.192M Avg Volume: 1.207M
BUY POINT: $50.76 Volume=1.8M Target=$60.95 Stop=$47.68
POSITION: QFJ GJ - July $50c (60 delta) &/or Stock
http://www.investmenthouse.com/ct/slab.html
Play Date: 02/27/2006
SMSI (Smith Micro Software--$9.24; +0.2; no options): Application software
http://biz.yahoo.com/p/s/smsi.html
After Hours: $8.40
STATUS: Cup w/handle. Volume jumped back into action Friday after SMSI lost some momentum at the breakout point. SMSI rallied, coming just shy of our buy point. Looks ready to blast on through the buy point. To recap: Volume is improving as SMSI starts the move out of a 15 month base. It broke higher in late January on strong trade, then moved laterally the past three weeks on very low, below average volume. Volume jumped last Wednesday as SMSI gapped higher. Strong fundamentals growth and an excellent pattern. Money flow is surging higher ahead of price and relative strength is making the breakout with the stock. SMSI is ready to move higher.
Volume: 368.413K Avg Volume: 237.205K
BUY POINT: $9.29 Volume=300K Target=$11.25 Stop=$8.64
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/smsi.html
Play Date: 03/02/2006
WFT (Weatherford International--$44.48; -0.16; optionable): Oil and gas service company
http://biz.yahoo.com/p/w/wft.html
STATUS: Reverse head and shoulders. Took the day off as well Friday, holding basically steady on lower, below average volume after the solid volume move higher Thursday. While many energy stocks sold hard of late, WFT held tough, and it is ready to make the move. To recap: Volume punched up to just above average last Tuesday and Thursday as WFT reached lower and recovered and then started the break higher. Strong money flow is leading the way higher as WFT moves for a new all-time high. WFT rallied nicely from its breakout in December and needed a breather. The current 7 week base that formed using the 50 day EMA (41.23) at the 'head', a good place for WFT to find support. Looks ready to make the all-time high.
Volume: 1.895M Avg Volume: 3.518M
BUY POINT: $44.89 Volume=5M Target=$51.95 Stop=$42.64
POSITION: WFT HI - Aug. $45c (55 delta) &/or Stock
http://www.investmenthouse.com/ct/wft.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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