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us stock market, trade stock
Begin Part 2 of 2
Some of the old leaders that are again leading this market made solid moves today as well as others in great patterns. BRCM was on our list and in a good pattern. It jumped today on strong volume, and its next move is at 50. The pivot was at 47.74, and it wasted no time getting there today on some strong volume surges on the 5 minute chart. This was simple for us; the stock had ralled and then moved more or less laterally the past 7 sessions with lower intraday lows on light volume. Pretty good-looking handle. Today it cleared the high in that handle early and we had a buy all ready to go for this stock that is a leader once again. It came back to test 47 over the next hour and one-half, but then it took off and ran to 50 in a straight line using the 15 minute MVA as support all the way up. Yes we could have waited for the test of the breakout that usually comes intraday, but we were not going to miss this move, especially as we saw volume coming in heavy. We issued the alert and stuck our buy order in ahead of the price and nailed it.
HRH is a pre-split stock, and we love to play these in good market momentum. HRH made a solid move off the 10 day MVA on Friday, and today cleared resistance early. It moved so fast, by the time it hit the buy point (60.91) it had spiked and was falling. We issued the alert and then moved in when it held at 60.80 and started to move back up to 61. Volume was solid, but it could not break over 61 before falling down to 60.20 in a quick move that started at 10:10 CT. That was a bit concerning, but we saw a lot more volume on the move up earlier, so we held tight. It bounced and made it back to 61 again where it moved sideways for over an hour. We did not like this resistance twice at 61 and were watching to perhaps just bail out if it started back down. Instead it gapped up over that level at 12:40 CT on a huge volume spike. A sigh of relief and we left it alone. It ran well to close at 62.16. It cleared resistance and it did it on good volume. We are going to let it run with an outside target at 72; we may have to leave earlier as our interim goal is to take in $5 on this move as this is a money making play, not a home run play.
THE PLAYS:
All prices are current as of the close of trading Monday.
Good movers: There were several. Of stocks that were left off the report, PHTN made the buy point at 35.17 on a breakout from its cup with handle. It remains a buy up to 37 on the move.
Best Plays: Several good-looking moves today.
1) BSYS: Broke resistance of a down trendline.
2) KLAC: Looks ready to move over the November high after today.
3) PMCS: Ready to break resistance.
4) MNC: Moving up in the lateral pattern.
5) BORL: Moving up in the handle.
6) MANU: Getting stronger volume.
7) GMST: Made the buy point and has room to run!
8) VRTS: Moving up as well.
9) CHKP: Getting ready to move!
10) INFA: Ready to break out from the looks of it.
11) MXIM: Looks strong on this move.
12) BRCD: Ready to spring up.
13) OAKT: The stock came through on this move! Looking for more.
NEW PLAYS:
BSYS (Bisys Group--$55.32; +1.12; optionable): Software
http://biz.yahoo.com/p/b/bsys.html
STATUS: BSYS formed a 3-month cup with handle at the bottom of its 5-month base (high at 64.01), and made a move up Monday on rising volume, breaking through a down trendline connecting August and November highs. Volume was up to 439,300 (avg. 708,000), still well below average, but if that improves quickly, BSYS can break out of this pattern and continue to move up the right side of the larger base. Showing good money flow. Target: 67
BUY POINT: 56.09 on volume of 1.1 million or higher. Stop: 52.16 (7%); 50 day MVA is at 52.90.
POSITION: Stock and/or January or March $50 calls to buy (BQY AJ or CJ).
http://www.investmenthouse.com/ct/bsys.html
Back On:
KLAC (Kla-Tencor--$50.05; +2.42; optionable): Semiconductor
http://biz.yahoo.com/p/k/klac.html
STATUS: Making a solid move up (after a 2-day pop from the 50 day MVA, currently near 45) with volume screaming above average to 10.8 million (avg. 9 million). KLAC made a super run up from the October low (28.61), topping out at the November high 51.90, from which it has pulled back for the recent test of the 50 day MVA (in a cup with handle-type base). On this move it is looking ready to take out the high, and that is what we are looking for. Target is near 60, at the highs in the base formed since mid-May (part of a larger base dating from spring of 2000). High money flow and relative strength breaking out.
BUY POINT: Breakout: 52, on volume in the range of 13 million. Stop: 48.36 (7%).
POSITION: Stock and/or January $45 calls to buy (KCQ AI).
http://www.investmenthouse.com/ct/klac.html
PMCS (Pmc-Sierra--$23.24; +1.75; optionable: Semiconductor
http://biz.yahoo.com/p/p/pmcs.html
STATUS: Made a nice move up today after pulling back to the 18 day MVA and testing that support the previous 3 sessions. The stock was pulling back from a nice run up from late October (at 15), and today just about made it to the November high at the top of that run, 23.74. With volume rising to 8 million (still below average, 10.5 million), we are looking for PMCS to go ahead and break that potential resistance. On that move, we are looking for a new run, this one to the range of the 200 day MVA, currently at 30. Has strong money flow and positive buying.
BUY POINT: 23.90, on volume of 14 million or higher. Stop: 22.23 (7%)
POSITION: Stock and/or January $20 calls to buy (SQL AD).
http://www.investmenthouse.com/ct/pmcs.html
Continued New Plays (from the weekend):
ORLY (O'reilly Automotive--$32.26; -0.44; optionable): Auto Parts
http://biz.yahoo.com/p/o/orly.html
STATUS: Held the 10 day MVA in the cup with handle, the low tapping near that support level. Volume was below average but higher at 205,900 (avg. 469,000), and if the stock can hold this support (reinforced by the October highs and other prices since July), we will continue to look for the breakout. Continued strong money flow. Target: 41
BUY POINT: 34.13 on volume of 704,000 or higher. Stop: 31.74 (7%)
POSITION: Stock and/or January or February $30 calls to buy (OQR AF or BF; 0 and 64 open interests, respectively).
http://www.investmenthouse.com/ct/orly.html
BAC (Bank of America--$64.93; -0.06; optionable): Money Center Banks
http://biz.yahoo.com/p/b/bac.html
STATUS: Made a nice move up Friday to complete the 3-month base (it has a double-bottom configuration due to the September and October lows), then as volume increased Monday still moved up from the opening price of 64.50 but closed with the slight loss. BAC is likely to form a handle here if it does not take out Friday's high (64.99) on continued rising volume (3.6 Monday; avg. 6.3 million). Our target on a breakout: 75. This base is part of a much larger one that formed since mid-1998.
BUY POINT: 65.67 on volume of 7 million or higher. Stop: 61.07 (7%); 50 day MVA is currently at 60.71.
POSITION: Stock and/or January $60 calls to buy (BAC AL).
http://www.investmenthouse.com/ct/bac.html
MTON (Metro One Telecom--$37.23; -0.72; optionable): Diversified Communications
http://biz.yahoo.com/p/m/mton.html
STATUS: Hit with some moderate selling Monday but the stock was able to hold above the 10 day MVA (36.56), tapping near that support on the low of 37.04. The stock tried to make its breakout move from the lateral (handle to a 5-month cup) pattern, but the sellers were winning intraday; volume was higher, coming in at 481,600 (avg. 482,000). We will look for the stock to hold support at the 10 day, heading back up for the breakout. Lower support is the 18 day MVA at 34.89, though a drop to that level would require a lengthier consolidation in the handle. That is not unacceptable; we just want to see the move out of this lateral pattern, if it will. Target: 47
BUY POINT: Breakout: 38.86 on volume of 1.2 million or higher. Stop: 36.14 (7%)
POSITION: Stock and/or January $35 calls to buy (KQM AG; very low open interest and delta of 0.51). Next month out is March; options have a high premium ($10.50 for March $30 and a good delta).
http://www.investmenthouse.com/ct/mton.html
MNC (Monaco Coach--$19.28; +0.24; optionable): Automotive
http://biz.yahoo.com/p/m/mnc.html
STATUS: Made a small move up in the lateral pattern (functioning as a handle to a 5-month v-bottomed cup). Volume was up nicely with price, so the stock looks ready to try a breakout here. We saw lots of breakouts today, and many incipient ones; MNC may be able to follow through similarly. Volume was up at 87,000 (avg. 94,000). The stock shows steady money flow and high relative strength. Target: 24
BUY POINT: Breakout: 19.79 on volume of 144,000 or higher. Stop: 18.40 (7%)
POSITION: Stock and/or January $16.63 calls to buy (MGH AW).
http://www.investmenthouse.com/ct/mnc.html
BORL (Borland Software--$13.95; +0.45; optionable):
http://biz.yahoo.com/p/b/borl.html
STATUS: Another move that looks like a pending breakout; BORL was up on stronger volume in its handle (464,000; avg. 712,000). Support at the 18 day MVA (13.20) held the stock, which opened down from Friday's doji at the 10 day MVA. BORL moved back over that moving average, and from here looks ready to try for the breakout. Looks good in the chart, and money flow remains high, buying solid. Target: 17 BORL has formed this base (with highs around 16) as part of a larger 2-year base. We use this one for covered calls quite often after its move runs out.
BUY POINT: 14.48 on volume of 1.1 million or higher. Stop: 13.47 (7%)
POSITION: Stock and/or January $10 calls to buy (BLQ AB).
http://www.investmenthouse.com/ct/borl.html
JAKK (Jakks Pacific--$23.17; +0.06; optionable): Toys & Games
http://biz.yahoo.com/p/j/jakk.html
STATUS: JAKK is in a long base dating from 1999, highs near 29. Currently it is testing the breakout from another base, a cup with handle of nearly 4 months, and after a nice bounce up from the 10 day MVA range Friday, made the small gain today but pulled off the high of 23.49 even on the rising volume (239,000; avg. 331,000). JAKK may need to consolidate further on a pullback to the 10 day MVA (22.24 range) if it cannot move higher on continued rising volume, perhaps forming a handle to its 19-month base within a larger base. Target on a move over the November high (23.91): 29
BUY POINT: 24, on volume in the range of 400,000. Stop: 22.32 (7%)
POSITION: Stock and/or January or March $20 calls to buy (UFF AD, 0 open interests, or CD).
http://www.investmenthouse.com/ct/jakk.html
HD (Home Depot--$45.52; -1.06; optionable): Retail
http://biz.yahoo.com/p/h/hd.html
STATUS: Dropped to the 10 day MVA in the lateral pattern, but had moved back over that support after a lower intraday tap at 44.80 (the 18 day MVA is lower at 44.11). Volume was up sharply on this action (7.7 million; avg. 8 million). We want HD to hold the 10 day for the eventual breakout over November's high at 47.23, high in the pattern and just above the down trendline that is squeezing it into the 10 day and 200 day MVAs (45.29 and 45.16 respectively). HD is in a long base dating from early 2000, but just recently broke back over its 200 day MVA. Target: Near 54, highs at the start of the most recent 6-month base. Money flow looks good; relative strength is high.
BUY POINT: 47.36 on volume of 10 million or higher. Stop: 44 (7%)
POSITION: Stock and/or January or February $40 calls to buy (HD AH or BH).
http://www.investmenthouse.com/ct/hd.html
RFMD (Rf Micro--$26.79; +0.65; optionable): Semiconductor
http://biz.yahoo.com/p/r/rfmd.html
STATUS: Looked good early in the day, popping up to 27.80 on the high with volume rising but sold back, still closing positively on the day (volume up to 7.8 million; avg. 10.4 million). The stock hit our aggressive buy point (26.70), and at least it closed above that. We are looking for RFMD to break out of a cup with handle base of 6 months, part of a larger base with highs around 91. It made a good move Thursday, a bounce back from the 50 day MVA (currently at 23.32). We will look for a hold in the range of the 10 day MVA until a chip rally breaks RFMD out over the November (handle) high at 28.56. Strong money flow. Target: 34
BUY POINT: Breakout: 28.69 on volume of 15 million or higher. Stop: 26.68 (7%)
POSITION: Stock and/or January or February $22.50 calls to buy (RFZ AA or BA).
http://www.investmenthouse.com/ct/rfmd.html
A short term trade:
MANU (Manugistics--$12.51; +0.25; optionable): Software
http://biz.yahoo.com/p/m/manu.html
STATUS: MANU is very deep in a 13-month base, but off the lows near 5. Recently the stock broke back over its 50 day MVA (10.29), engaged in a run up from a lateral consolidation that ran throughout October, reaching the November high at 13.70. Now MANU is holding comfortably above the 10 day MVA (11.89) over the last few days, with volume below average but rising Monday to 1.8 million (avg. 2.5 million). We are looking for a continued hold then breakout over 13.70, target at the 22.41 range (200 day MVA). Showing excellent buying. Shorter term trade only.
BUY POINT: 13.83 on volume of 3 million or higher. Stop: 12.86 (7%)
POSITION: Stock and/or January $10 calls to buy (ZUQ AB).
http://www.investmenthouse.com/ct/manu.html
Back on:
GMST (Gemstar-Tv Guide--$27.81; +2.30; optionable): Consumer Durables
http://biz.yahoo.com/p/g/gmst.html
STATUS: Started that nice move we were looking for today, rising on solid volume (4.45 million; avg. 4.6 million), hitting our aggressive buy point of 26. GMST was engaging in a pullback to the 10 day MVA (at 25.32) after running up from the late October low (18.94), and on this move just took out the November high of 27.75. Ready to head higher from here! Money flow and buying look good. Target: 34.63 (200 day MVA).
BUY POINT: Breakout: 27.88 on volume of 6 million or higher. Stop: 25.93 (7%)
POSITION: Stock and/or January or February $22.50 calls to buy (QLF AX or BX).
http://www.investmenthouse.com/ct/gmst.html
CONTINUED PLAYS: DNA, dropped over the weekend, made our buy point of 57.13 on a breakout move from the cup with handle. Volume was up but still below average, but the stock remains a buy (if volume stays on track and rises to our target) up to 60. It closed at 57.71.
VRTS (Veritas--$39.59; +2.26; optionable): Software.
http://biz.yahoo.com/p/v/vrts.html
STATUS: Moved up from the 2 consecutive dojis shown the previous 2 sessions, as volume rose to 9.1 million (avg. 14.8 million). The stock hit our aggressive buy point of 38.30 for entry into the covered call sale play; we look for VRTS to take out the November high at 41.25 for a breakout and another potential entry point. Once the run tops out, we can look at selling the December calls for a move back down to support. Currently, December $35 calls are selling for $5.90 and December $40 for $2.80. Target: 50-51.
BUY POINT: Breakout: 41.26 on volume of 15 million or higher. Stop: 38.37 (7%)
POSITION: Stock on the buy point. Calls to sell on topping: December $35 or $40 calls (VIV AG or AH).
http://www.investmenthouse.com/ct/vrts.html
TEST OF BREAKOUT:
CHKP (Check Point Software Tech--$39.50; +0.39; optionable): Security Software
http://biz.yahoo.com/p/c/chkp.html
STATUS: CHKP is testing the run it started late October, having pulled back to test the 18 day MVA last week, now back over the 10 day MVA Monday and Friday (10 day is at 38.80). Volume was up to 9.2 million (avg. 9.6 million) with the stock again closing near its intraday high, showing its second consecutive tight doji. Looking ready for a move up, and we like how CHKP can do that once it gets going. Initial target: 48.42 range (200 day MVA).
BUY POINT: Aggressive: 40.50 on rising volume. Break of resistance: Over 43 on average or higher volume. Stop: 40.08 (7%)
POSITION: Stock and/or January $35 calls to buy (KEQ AG).
http://www.investmenthouse.com/ct/chkp.html
AMCC (Applied Micro Circuits--$15.54; +0.47; optionable): Semiconductor
http://biz.yahoo.com/p/a/amcc.html
STATUS: After a bout of selling last week, AMCC held the 18 day MVA (13.89), testing highs from its recent ascending wedge and moving back up over the last three sessions. Today the stock made a small move, running on volume that was a bit below what we saw on last week's drop and rebound (14.2 million; average 14 million). We could see a test of support again here (10 day at 14.56), but we know that AMCC can take off and run hard in a rally, so we will keep our eyes open for the breakout move over the recent high of 16.32. The initial target is the 200 day MVA (18.95). Good money flow.
BUY POINT: Breakout: 16.45 on rising volume. Stop: 15.30 (7%).
POSITION: Stock and/or January or February $12.50 calls to buy (AEX AV or BV)
http://www.investmenthouse.com/ct/amcc.html
WEDGES, PENNANTS, and FLYING PLATEAUS (AND FLAGS): These are some of our favorite patterns as the moves can be explosive. In this market, however, we need to see the move on the breakout on strong volume.
INFA (Informatica--$12.35; +1.21; optionable): Software
http://biz.yahoo.com/p/i/infa.html
STATUS: Good move up. INFA pulled back in recent sessions to the 18 day MVA (10.96), but after the low volume drop the stock made a solid move back up today in its handle (to a cup deep in its base). Volume spiked way up to 1.83 million (average 1.3 million) as INFA hit the aggressive buy point, and now is heading up toward the handle high (13.05). The initial target is the 200 day MVA at 15.22. Money flow and buying remain solid.
BUY POINT: 13.17 on volume of 1.9 million or better. Stop: 12.25 (7%)
POSITION: Stock and/or March $12.50 calls to buy (UYF CS)
http://www.investmenthouse.com/ct/infa.html
AVNT (Avant--$11.13; -0.52; optionable): Software
http://biz.yahoo.com/p/a/avnt.html
STATUS: Pulled back again in its ascending wedge. Not a bad move, however, droping on below average volume (447,300; average 467,000) and holding recent support at the 10 day MVA (11.05). Looking good if it can hold here, and we are watching for a breakout over the pattern's high at 12.15; the 200 day MVA is just ahead at 13.01 for taking less aggressive positions. AVNT is off the September lows in a 10-month base. Money flow remains strong. Target: 15
BUY POINT: Breakout: 12.28 on volume of 632,000 or higher. Stop: 11.42 (7%). Break of resistance (200 day MVA): Over 13.01 on above average volume.
POSITION: Stock and/or January $10 calls to buy (NVQ AB; 99 open interests).
http://www.investmenthouse.com/ct/avnt.html
BASING/TRADING RANGES:
COST (Costco--$42.84; +0.71; optionable): Retail
http://biz.yahoo.com/p/c/cost.html
STATUS: Recovering nicely in the handle. Last week COST slipped below the 18 day MVA (41.55), but recovered Friday and today continued up on much stronger volume (5.62 million; average 4 million). Looking good in its four-month cup with handle, and after this nice reversal we will look for continued momentum to carry it over the breakout. The November (handle) high at 43.84. Money flow is excellent, and buying positive. Target: 53
BUY POINT: 43.97, on volume of 6 million or higher. Stop: 40.89 (7%); 18 day MVA is at 41.55.
POSITION: Stock and/or January $40 calls to buy (PRQ AH).
http://www.investmenthouse.com/ct/cost.html
KOPN ($16.36; +0.78; optionable): Electronics
http://biz.yahoo.com/p/k/kopn.html
STATUS: KOPN continues to move up along its 10 day MVA (15.42; testing the 18 day, at 14.86, at intraday lows), not pulling back into a proper handle. This is the third bounce up along the 10 day after breaking from an ascending wedge handle in October, but volume was rather weak on today's bounce (633,200; average 1.22 million). We can get four solid bounces, although we are cautious with fourth and fifth bounces, as the stock will typically need to test back to lower support. With the weak volume today, we will need to see some more strength on a move over the recent high for positions, and on those we will carefully protect profits. The left-side high of the cup is at 16.79. Initial target: 20.
BUY POINT: 16.75 on volume of 1.8 million or better. Stop: 15.58 (7%)
POSITION: Stock and/or January or March $12.50 calls to buy (KQO AB or CB).
http://www.investmenthouse.com/ct/kopn.html
MXIM (Maxim Integrated Prods--$55.13; +2.90; optionable): Semiconductor
http://biz.yahoo.com/p/m/mxim.html
STATUS: Good move today. MXIM continued its move up in its handle to the 5-month cup pattern, today moving over the 10 day MVA (52.99) on excellent volume (up to 7.53 million; average 5.7 million). The move also took out our aggressive buy point, leaving us looking forward the handle high of 56.95. Money flow is looking solid and buying is improving. Target: 68
BUY POINT: Breakout: 57.08 on volume of 8.6 million or higher. Stop: 53.08 (7%)
POSITION: Stock and/or February $50 calls to buy (XIQ BJ).
http://www.investmenthouse.com/ct/mxim.html
Updating this covered call play:
BRCD (Brocade--$31.94; +0.57; optionable): Computer Peripherals
http://biz.yahoo.com/p/b/brcd.html
STATUS: BRCD inched up a bit more Monday, with volume still rather low at 1.3 million (average 16.2 million). Still looks solid in its handle after holding support after its quick move up and reversal last week, and we are still looking to kick off the covered call play that was put on hold by last week's selling back. The stock hit our aggressive buy point today, so once BRCD hits resistance, tops out and heads back down, we will consider selling $30 or $35 calls. First potential resistance is at the 200 day MVA, 33.28, and we are looking at positions on a move over that level, although the aggressive can take positions ahead of that. Once the calls are sold (next levels of resistance in the 35-39 range), they can then be bought back at a lower price when BRCD pulls back and hits support. The stock looks to offer a return of 15-18% on the play. Earnings are out Wednesday. Initial target: 40
BUY POINT: On a move over the 200 day MVA on volume of 24 million or higher. Stop: 31 (7%; 10 day MVA at 30.60).
POSITION: Stock at the buy point. Calls to sell on topping: December $30 calls to sell (UBF LF).
http://www.investmenthouse.com/ct/brcd.html
RDRT (Read-Rite--$6.41; +0.47; optionable): Hardware
http://biz.yahoo.com/p/r/rdrt.html
STATUS: A solid breakout. RDRT moved up from the base of its handle (to a large cup) last week, and today blew through the buy point, moving on very strong volume of 3.4 million (average 785,300). That is the strong move we love on a breakout. RDRT hit an intraday high of 6.66 before pulling back to close, so we will see if it holds here or falls to a bit of quick profit-taking. From here it is still a buy up to 6.51, and the target is still 8.50.
BUY POINT: A buy up to 6.51, looking for continued strong volume. Stop: 6 (7%)
POSITION: Stock and/or January $5 calls to buy (RDQ AA).
http://www.investmenthouse.com/ct/rdrt.html
OAKT (Oak Tech--$12.20; +1.03; optionable): Semiconductor
http://biz.yahoo.com/p/o/oakt.html
STATUS: Great move! After settling back in its handle after the failed breakout attempt last Tuesday, OAKT blasted back up off of its 10 day MVA (11.19) today. Volume was excellent (1.64 million; average 758,000) as the stock closed just under the intraday high from last Tuesday (12.40). For positions from here we are looking for a move over Tuesday's high, adjusting the target to 15. OAKT has been showing strong money flow and buying.
BUY POINT: 12.52 on continued strong volume. Stop: 11.65 (7%)
POSITION: Stock and/or January $10 calls to buy (KAU AB).
http://www.investmenthouse.com/ct/oakt.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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