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us stock market, stock watch
Begin Part 3 of 4
CONTINUING CANDIDATE BEST PLAYS:
1) SUI - Looking for a run up to breakout
2) BJ - Looking good for a put
3) FLIR - Big drop triggers the put!
SUI (Sun Communities--$37.77; +0.12; no options): REIT. http://biz.yahoo.com/p/s/sui.html
BACKGROUND: Based upon our research it does not appear that SUI has ever split its stock. The annual shareholder meeting was on 5-22-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Has sold back a bit in the pennant handle. SUI had been pulling back nicely since making a strong move up in the right side of a small "flying w" pattern, and the handle had formed into a pennant. However, there was some stronger selling on Thursday that took the stock through the 10 day MVA (37.79) and down to the 18 day (37.68). We sometimes see that type of "shakeout" selling in a pennant pattern, and it can lead to a strong reversal and breakout. Friday SUI did hold the 18 day, but could not hold a move back over the 10 day, pulling back from a high of 37.88. Volume was level at 53,500 (average 48,000), so we are still looking for SUI to make a breakout move. Target 45.
BUY POINT: New high: 38.37 on increased volume, with stock. Stop: 37.
BJ (BJ Wholesale--$47.52; -2.40; optionable): Retail - Discount
http://biz.yahoo.com/p/b/bj.html
BACKGROUND: Last announced a 2:1 split on 2-4-99 at a stock price of $44. The annual shareholder meeting was on 5-24-01 at which time no additional shares were authorized. The company has sufficient shares for 2:1 split.
STATUS: Big drop back through support. BJ gave up the 200 day MVA (48.81) last Monday only to turn back up with a move to close back over the 50 day (50). That rebound did not last, as Friday BJ turned back down, again taking out the 200 day on increased, strong volume (1.06 million; average 679,300). With this second breach, we are not looking for a strong rebound back through resistance, but we could get a test of that level before the stock falls further. For the put we are targeting 42, but with its erratic nature of late we will look for bottoming signs as it falls.
BUY POINT: From here or after a failed test of the 200 day, a drop through 47 on continued strong volume.
POSITION: December $55 puts to buy (BJ XK - January available Monday).
FLIR (Flir Systems; $34.34; -6.65; optionable): Electronics - Scientific
http://biz.yahoo.com/p/f/flir.html
STATUS: Defense issues are taking it on the chin with war success. FLIR slammed through our put buy point Friday, plowing all the down to our target at 35, moving on huge volume of 2.05 million (average 305,000). After such a big drop, we could see a reflex bounce back up here, and we might consider taking profits on existing positions. However, the stock is still set up for another possible drop, so for new or additional positions we will look for a failure of the bounce and a move back down. New target: 27 (August-September consolidation range).
BUY POINT: After a relief bounce fails at 36-37, a drop through 34 on continued strong selling volume.
POSITION: January $55 puts to buy (FFQ XK).
POST-SPLITS BEST PLAYS:
1) PDLI - Shaping up nicely
2) ATK - May be ready to fall again
3) KRON - Good lateral consolidation
PDLI (Protein Design Labs--$35.94; -0.29; optionable): Biotechnology. Splits 2:1 effective October 12.
http://biz.yahoo.com/p/p/pdli.html
STATUS: PDLI continues to set up nicely. It has made some solid moves lately, pulling back to support and taking off again. It is forming an ascending wedge now, having pulled back Wednesday but caught support at its 10 day MVA (35.31), Friday showing a loose 'shooting star' doji over that level. This pattern is making up the handle to a cup dating back to June with highs at 45, although this cup is part of a larger overall pattern that goes back to levels over 70 a year ago. However, even though deep in the pattern, PDLI is giving us many solid, playable moves. We will watch for it to hold here and give us a move back over the recent highs, at 37.50. Target: 45.
PLAY: Breakout: 37.62 on volume of 3 million (2.2 million average, still low at 1.69 million Friday). Stop: 35.50. Bounce: In an up market, a bounce over Friday's high of 36.60 on average or better volume. Stop: 34 (just under 18 day MVA). For both buy points, stock and/or December or February $30 calls to buy (PQI KF or PQI BF).
ATK (Alliant Techsystems--$78.07; +2.83; optionable): Aerospace/Defense. Split 3:2 effective 9-10-01.
http://biz.yahoo.com/p/a/atk.html
STATUS: Another defense issue showing a lot of weakness now. ATK had given us a great run, but has fallen back, at first on low volume, but Tuesday it gave up the 50 day MVA (81.78) on big volume. We looked for a bounce after the initial drop, and ATK has held on with small up and down moves as volume drops. Friday ATK moved back up again, this time on lower volume of 352,500 (average 337,300). Although trying to hold on, it is still weak and we are continuing to look for a strong move back down through the lows of its last three sessions, at 74.50 (hit 74.60 Friday). Targeting 70 initially (August-September consolidation levels), with the 200 day at 66.40.
PLAY: A drop below 74.50 on increased volume, with stock and/or December $85 puts to buy (ATK XQ - January available Monday).
KRON (Kronos--$41.75; -0.20; optionable): Business equipment. Split 3:2 November 16.
http://biz.yahoo.com/p/k/kron.html
STATUS: KRON is testing its breakout from a wedging handle to a cup pattern (dating back to January 2000, with highs at 80), moving laterally the last couple of weeks up to Friday's split. It made a weak move Friday back up from recent support at the 10 day MVA (41.14), moving on level volume (127,700; average 180,000). A solid performer, so post-split we will see if KRON can hang on to support. If it can, it could set up another move. However, we often see post-split weakness, so hanging on to support here is key. Target of a breakout: 52.
BUY POINT: 43.43 on volume of 200,000. Stop: 41.
POSITION: Stock and/or January $40 calls to buy (KUE AH - check open interest, delta, etc. with your broker as unavailable at the time of writing.
MARKET FAVORITES BEST PLAYS: Back by popular demand, these are some our favorite techs that are looking good and are in position to make us money!
1) QLGC - Looking nice over support
2) BRCD - Ditto
QLGC (Qlogic--$46.66; -1.11; optionable): Semiconductor
http://biz.yahoo.com/p/q/qlgc.html
STATUS: QLGC is in a large double bottom since January (highs 100, with the all-time high from November at 130). The middle of the pattern, from late June, is at 66.16. From its lows at 18 in early October, QLGC has climbed steadily back, taking out its 200 day MVA (41.86) as it climbs along its 10 day (45.88). The climb has been steady and strong, with the 18 day MVA (91.62) recently crossing the 200 day. The stock hit a high of 49.16 twice recently and has pulled back a bit the last few sessions, showing decreasing volume as it tightens up over the 10 day. Looking nice in something of a small ascending wedge, showing a loose doji Friday on volume of 7.99 million (average 10.55 million). We are looking for a strong move back up and over the upper resistance for a breakout from the pattern. Showing strong money flow. Target: 59.
BUY POINT: Breakout: 49.28 on volume of 14 million or higher. Stop: 45.84 (7%).
POSITION: Stock and/or January $45 calls to buy (QLC AI).
BRCD (Brocade--$29.47; -0.51; optionable): Computer Periperals
http://biz.yahoo.com/p/b/brcd.html
STATUS: Pretty. BRCD is in a gradually descending lateral pattern that is currently holding support at the 10 day MVA (29.19), the handle to a 3-month cup. Volume fell steadily last week, down again Friday to 10.1 million (average 16.1 million). We look for the stock to hold here for a rally back up to the 200 day MVA at 35, but our target on a breakout is at 38. The November high is 32.04, so we will look at taking positions on a strong move over that price; aggressive players can look at a move over 31 on average or better volume.
BUY POINT: Breakout: 32.17 on volume of 24 million or higher. Stop: 29.92 (7%). Aggressive: In a rally, a bounce over 31 on volume near the average. Stop: 29.
POSITION: Stock and/or January $30 calls to buy (UBF AF).
SEBL (Seibel Systems--$25.00; -0.29; optionable): Software.
http://biz.yahoo.com/p/s/sebl.html
STATUS: Another old friend that is deep in its base, but showing some very playable moves and forming up nice patterns that make great plays. SEBL has risen from near 12 since early October, taking out its 50 day MVA (21.53) a couple of weeks ago. It made a nice run that peaked at 26.41, pulling back on lower volume the last couple of sessions. It is holding its 10 day MVA (23.43), showing a doji Friday as volume continued to decrease (11.9 million; average 16.3 million). Good action, and if we get a bit more pullback we will look for SEBL to hold the 10 day, and give us a move in a Nasdaq rally. Targeting the 30 initially, with the longer term target the 200 day MVA, currently at 35.
BUY POINT: Breakout: 26.53 on volume of 24 million. Stop: 24.67 (7%).
POSITION: Stock and/or January $22.50 calls to buy (SGQ AX - check delta, etc. with your broker as unavailable at the time of writing).
VRTS (Veritas--$38.90; +0.67; optionable): Software.
http://biz.yahoo.com/p/v/vrts.html
STATUS: Setting up nicely. We are looking for VRTS to lead again, and it is another tech that has come back strong, making a nice pattern although very deep in its base. After a solid move Tuesday VRTS has pulled laterally, holding comfortably over its 10 day MVA (36.39). Volume has steadily decreased since Tuesday's move (8.8 million Friday; average 15.2 million), which is solid action. Looking for VRTS to hold support and breakout again. Targeting the 200 day MVA at 50.94.
BUY POINT: 40 on volume of 22 million. Stop: 37.20 (7%).
POSITION: Stock and/or January $35 calls to buy (VIV AG).
REMAINING PLAYS:
PRE-ANNOUNCEMENTS REMAINING PLAYS:
Watchlist:
GTK (44.32; -1.06): Fell back a bit Friday, a was inevitable. After the big breakout we are looking for GTK to hold support (10 day MVA at 43.91) and consolidate its gains before we look at new positions.
NDN ($33.85; -0.48): Has fought back over the 50 day MVA (33.35), and tested that level at its low Friday. We will see if it can hold and show us something of a pattern.
SONC ($32.36; +0.56): We are working on a date. Trying to recover, but very erratic. It did not hit the put buy point, and has now made a move back over the 50 day MVA (31.59). We will see how it develops.
XL ($92.00; +1.00): Has tried to recover, but volume has dropped significantly and it is still at the resistance of its short-term MVA's (91.88). We will see if it can form up in a better pattern.
Plays:
TRDO (Intrado--$28.10; +2.59; optionable): Computer Software. Forecast to announce a split in the beginning of December in conjunction with a board meeting. The company will not confirm the board meeting but based upon our research the board meeting should take place at this time.
http://biz.yahoo.com/p/t/trdo.html
BACKGROUND: Based upon our research it does not appear that TRDO has ever split its stock. The annual shareholder meeting was on 6-26-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: All over the place. TRDO gave up the 50 day MVA (27.03) on big volume Wednesday, but after making a weaker bounce that looked to stall, it climbed back over the 50 day Friday to close with a big move. Trouble is, volume continued to decrease, coming in at 368,500 Friday (average 336,000; Wednesday's selling was 780,000). It closed right at its short-term down trendline from mid-October, and with the decreasing volume we are not ready to consider it to the upside. It needs to hold over the 50 day MVA on the close once again on better volume. Until then, we will watch for a failed move up, which could generate a quick put play, but we will want big volume selling and will have to carefully watch the Thursday low at 23.57, with intermittent support from prior levels at 20-22. Targeting 22 initially.
BUY POINT: Aggressive: A drop through 26 on increased volume in the 500,000 range.
POSITION: December $40 puts to buy (UNC XH - January available Monday).
EDS (Electronic Data System--$68.20; -0.51; optionable): We are researching a date.
http://biz.yahoo.com/p/e/eds.html
BACKGROUND: Last announced a 2:1 split on 3-9-92 at a stock price of $60. The annual shareholder meeting was on 5-22-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: Completing its third bounce up off of the 10 day MVA after breaking out in mid October. Stocks tend to make 4 to 5 such runs, but we note that EDS has not had huge volume on this last bounce. EDS has ranged between 53-67 since the beginning of the year, rallying back since the attacks from the 54 range. Earlier this month EDS broke back over the prior high for the year (67.40, from March). Friday it pulled back, moving on higher volume of 3.69 million (average 3.17 million). Looking for a test back to support, and possibly a test lower to the range of the 18 day MVA (66, also at the highs of the current range). With current positions we will continue to cautiously ride, but breach of the 10 day could spell an exit.
BUY POINT: After a test of the 66-67 range with a bit of consolidation, a move back over 68 on above average volume. Stop: 64.
POSITION: Stock and/or January $65 calls to buy (EDS AM).
FDC (First Data--$72.60; -0.63; optionable): Working on a forecast date.
http://biz.yahoo.com/p/f/fdc.html
BACKGROUND: Last split was a 2:1 on 11-18-96 at a stock price of $80. The annual shareholder meeting was on 1-11-01 at which time authorized shares were increased. The company has sufficient shares for a 2:1 split.
STATUS: Broke out on weak volume Tuesday, and as might be expected, it pulled back quickly. It held to close over the pivot point and left-side high in its cup pattern (from July) Friday (10 day MVA at 72), coming back from a low of 71.50 to close, moving on higher volume (2.14 million; average 2 million). It is completing its third bounce up from the 18 day MVA (70.65). Not one that we are too excited about for an upside move at the moment, as the move up in the cup for the last several weeks had been on low volume; we like to see accumulation in the right side of the pattern. We will watch for FDC to complete its third visit to the 18 day (70.65) and form a better handle. However, we need to be prepared for a potential visit to the 50 day (67.44) given the weak moves up. We were targeting 82 on a strong breakout.
BUY POINT: Breakout is 74.23 on volume of 3 million, preferably after a drop back into a better handle consolidation. Stop: 70.
POSITION: Stock and/or February $70 calls to buy (FDC BN).
MI (Marshall & Ilsley--$59.76; -1.23; optionable): Banking: Regional. We are researching a forecast date.
http://biz.yahoo.com/p/m/mi.html
BACKGROUND: Based upon our research it does not appear that MI has ever split its stock. The annual shareholder meeting was on 4-24-01 at which time no additional shares were authorized. The company has sufficient shares for a 2:1 split.
STATUS: A nice double bottom with handle breakout is in jeopardy as MI fell hard on stronger volume Friday. We were looking for MI to pullback softly to test its 10 day MVA (60.21) and set up an ascending wedge on the breakout test. However, volume spiked up to 318,700 (average 227,000) as MI dipped back to its 18 day MVA (59.62), forming more of a double top at 61.49. Still in the range of its handle high in the 'flying w' pattern from which it broke in early November, and we will see if it can hold here, but double tips after a breakout are bad: it cannot muster enough volume or buyers to get it to that new high. It has made a solid move up in the right side of the pattern, and if it can hold the 18 day it could set up a strong move back up and breakout over the highs, at 61.49. We will see, but stocks that double top can really fail. If we can get the breakout, we are still targeting 70.
BUY POINT: 61.61 on volume of 300,000 or better. Stop: 57.25 (50 day MVA at 57.92).
POSITION: Stock and/or December $55 calls to buy (MI LK).
THQI (Thq Inc--$52.68; -0.82; optionable): We are working on a date.
http://biz.yahoo.com/p/t/thqi.html
BACKGROUND: Last announced a 3:2 split on 10-26-99 in conjunction with earnings. The stock price was $44. Prior to that announced a 3:2 split on 7-23-98 in conjunction with earnings. The stock price was $33. The company has sufficient shares for a 2:1 split.
STATUS: THQI made a strong breakout (from a ragged cup with handle) at the beginning of the month, but hit resistance at the up trendline connecting the August lows (and which provided resistance at the October high). After a strong drop back it is trying to hold at 52.50 (50 day at 51.36; 10 day at 53.85), in the upper range of its former handle. THQI dipped back again Friday, but held the recent lows at 52.50 with volume dropping way off (890,200; average 1.26 million). We will see if it can hold here or the 50 day if we get some market weakness, and in a rally THQI could give us a bounce back up for an aggressive play. We know it can move, with recent highs at 60, but with the current pattern this is more like catching a momentum bounce higher rather than a strong breakout.
BUY POINT: Aggressive: If it can hold this range, a move over 55.80 in a rally with volume of 2 million or better.
POSITION: January $50 calls to buy (QHI AJ - available Monday, check deltas, prices, etc.).
End Part 3 of 4
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us stock market
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