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us stock market, stock recommendation
Begin part 3 of 3
THE PLAYS
Good movers: EGO; ENER; NTRI; MHP
Strong plays:
1) AQNT: Solid earnings sending it toward a breakout.
2) HCR: Nice breakout test.
3) RMIX: Strong break higher.
4) GRP: Starting the breakout.
5) HLTH: Great volume as it heads for the breakout.
6) XLE: Volume is up as it heads toward the breakout.
NEW PLAYS:
Upside plays:
Play Date: 05/10/2006
AQNT (Aquantive--$27.90; +1.40; optionable): Digital marketing Internet)
http://biz.yahoo.com/p/a/aqnt.html
After Hours: $27.85
STATUS: Reverse head and shoulders. Solid earnings helped propel AQNT higher in its 18 week base. It is right at clearing some resistance at the February high (28), and if it can make that move we are going to start some positions. Strong 7 to 4 accumulation shows buying during the base. Strong money flow is leading higher as well. Strong leader ready for the breakout run.
Volume: 2.556M Avg Volume: 1.5M
BUY POINT: $28.15 Volume=1.8M Target=$33.85 Stop=$26.18
POSITION: QBT IE - Sept. $25c (77 delta) &/or Stock
http://www.investmenthouse.com/ct/aqnt.html
Play Date: 05/10/2006
HCR (Manor Care--$45.18; +0.28; optionable): Long-term care
http://biz.yahoo.com/p/h/hcr.html
After Hours: $45.10
STATUS: Test breakout. HCR broke from a short 5 week base last week, rising off the 50 day EMA (43.15) on strong volume. It faded the past three sessions, testing the move but holding most of the gain. Positive 3 to 2 accumulation as HCR made higher lows up the 50 day while it set up for the breakout to a new all-time high. May come back to the 10 day EMA (44.48) before it is ready to rebound, but Wednesday it was higher in a so-so market and if it starts higher we are ready to move into this leader.
Volume: 641K Avg Volume: 649.084K
BUY POINT: $45.65 Volume=750K Target=$52.50 Stop=$44.21
POSITION: HCR HI - Aug. $45c (55 delta) &/or Stock
http://www.investmenthouse.com/cs/hcr.html
Play Date: 05/10/2006
RMIX (U.S. Concrete--$15.49; +0.83; optionable): Cement
http://biz.yahoo.com/p/r/rmix.html
After Hours: $15.34
STATUS: Ascending base breakout. Tight, compact 6 week base that formed over the 50 day EMA (13.62) as RMIX consolidates 5 month run up the 10 and 18 day EMA (14.54 is the 10 day). It didn't take long; it set up making higher lows above the 50 day, showing solid 3 to 1 accumulation and surging money flow. It narrowed its loss and that gave it the breakout strength. Relative strength broke out as well, a good corroboration of RMIX' move to its new all-time high.
Volume: 938.405K Avg Volume: 367.598K
BUY POINT: $15.62 Volume=375K Target=$18.75 Stop=$14.53
POSITION: RQS IC - Sept. $15c (64 delta) &/or Stock
http://www.investmenthouse.com/cs/rmix.html
Downside:
Play Date: 05/10/2006
CPO (Corn Products--$27.46; -0.64; optionable): Starches, liquid sweeteners, etc.
http://biz.yahoo.com/p/c/cpo.html
STATUS: Put. Decent run through March but then started to get rocky in April and set up something of a head and shoulders pattern. The right shoulder was hardly apparent, with CPO only rising up to the 50 day EMA (28.20), well below the high at 30 of the left shoulder. That is a rather weak bounce attempt and indicates the selling will be more severe. Turned down sharply Wednesday from the 50 day as volume jumped way above average. Money flow is diving. Looking ot move in on a further drop. A move to the target lands us a 40%ish gain. If it is selling hard at that point we will take some gain and let it continue falling.
Volume: 1.028M Avg Volume: 534.005K
BUY POINT: $27.32 Volume=550K Target=$25.38 Stop=$28.25
POSITION: CPO RF - June $30p (-67 delta)
http://www.investmenthouse.com/ct/cpo.html
CONTINUING PLAYS
Play Date: 05/09/2006
GOOG (Google--$402.98; -5.82; optionable): Internet search, etc.
http://biz.yahoo.com/p/g/goog.html
After Hours: $402.88
STATUS: Test 50 day EMA. Tried to run higher Wednesday but faded back close to the 10 day EMA (403.46) on lower volume. Still in good shape, taking a lower volume breather after the strong jump off the 50 day EMA (396.68). Being patient and letting it make the rebound. To recap: Solid volume gain Tuesday as GOOG jumped off a week long lateral move along a key support level (the 50 day EMA). It has fully filled the gap in April when it did it right on the earnings announcement. Now all that fluff is out and it looks ready to make another run. Using June options so we are looking for GOOG to make a pretty fast surge up to the April gap up high at 450.
Volume: 6.133M Avg Volume: 11.976M
BUY POINT: New: 406.50 (orig. $411.35) Volume=13M Target=$450.00 Stop=$404.00
POSITION: GOP FB - June $410c (54 delta)
http://www.investmenthouse.com/ct/goog.html
Play Date: 05/06/2006
GRP (Grant Prideco--$54.50; +1.00; optionable): Oil and gas service company
http://biz.yahoo.com/p/g/grp.html
Earnings: Announced 4-19-05
STATUS: Breakout test. Volume was up Wednesday as GRP moved up to the breakout point. Looks ready to make a breakaway move and continue the breakout run. To recap: GRP shot higher on its strong earnings, breaking out from its 11 week cup base that used the 200 day SMA (41.55) on the lows as support. It struggled at the end of the month along with many of the energy stocks, but it held and rebounded smartly back to the April high at 54. Spent the last half of last week testing, coming back to the 10 day EMA. This is holding the breakout and keeps GRP above the highs in the base from February. Just being patient and letting GRP show us the next break higher. Very good fundamentals to go along with the solid pattern that is ready to take GRP to a new all-time high.
Volume: 1.843M Avg Volume: 2.14M
BUY POINT: New: $54.69 (orig. $54.05) Volume=3.4M Target=$64.89 Stop=$51.62
POSITION: GRP JK - Oct. $55c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/grp.html
Play Date: 05/01/2006
HLTH (Webmd Corp.--$11.93; +0.31; optionable): Healthcare information service
http://biz.yahoo.com/p/h/hlth.html
STATUS: Test breakout. Nice volume Wednesday as HLTH heads toward the next breakout. Nice. To recap: Announced strong earnings mid-April and surged higher on strong volume, making the breakout from its 6.5 month cup with handle base. Excellent 8 to 2 accumulation (8 up price weeks on rising volume to 2 down price weeks on rising volume) shows strong buying in the base. Ready to break to a new 5 year high. Volume started to return last week. Ready to move in as it continues higher.
Volume: 3.627M Avg Volume: 2.621M
BUY POINT: $11.98 Volume=3.5M Target=$14.38 Stop=$11.22
POSITION: HUT JB - Oct. $10c (72 delta) &/or Stock
http://www.investmenthouse.com/ct/hlth.html
Play Date: 05/08/2006
KYPH (Kyphon--$42.62; -0.22; optionable): Medical instruments
http://biz.yahoo.com/p/k/kyph.html
STATUS: Cup w/handle. Excellent test, holding at the 10 day EMA (42.40) Wednesday with a nice hammer doji. Looks as if the handle formation is just about over. Excellent setup. To recap: Forming a nice flat handle on low, below average volume the past week as KYPH consolidates the strong move up right at the end of April. Good start to a handle to its 24 week base. Setting up nicely for a run at a new all-time high. Strong money flow is leading the way higher. Solid fundamentals, solid pattern.
Volume: 290.73K Avg Volume: 621.666K
BUY POINT: $44.15 Volume=750K Target=$52.95 Stop=$42.00
POSITION: QYQ II - Sept. $45c (52 delta) &/or Stock
http://www.investmenthouse.com/ct/kyph.html
Play Date: 05/08/2006
PDS (Precision Drilling--$36.07; +0.08; optionable): Oil and gas drilling & equipment
http://biz.yahoo.com/p/p/pds.html
STATUS: Test breakout. Very tight lateral range over the 10 day EMA (35.77) on very low, below average volume is setting the stage for the next break higher. Just have to be patient and let it show us the move. To recap: Nice breakout in mid-April sent PDS to a new high at 38. It came back to test the move the past week, moving in a lateral range over the 10 day EMA on low, below average volume. Nice, orderly test, preparing PDS for the continued move higher. Love the first tests of breakouts; a strong stock often moves well after this initial shakeout of the early profit takers.
Volume: 379.5K Avg Volume: 707.634K
BUY POINT: $36.75 Volume=1.1M Target=$44.00 Stop=$35.00
POSITION: PDS LG - Sept. $35c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/pds.html
Play Date: 05/08/2006
XLE (Spdr Energy Sector--$59.50; +0.55; optionable): Energy ETF
http://biz.yahoo.com/p/x/xle.html
After Hours: $59.50
STATUS: Breakout test. Volume was up, moving close to average as XLE heads for the breakout. Looking for continued volume as it continues the move. To recap: XLE is holding the 18 day EMA (58.05) on the intraday lows, holding the breakout after a quick dump lower to the 50 day EMA (56.07) to end April. Good recovery and setting up for the continued move higher. Solid 4 to 2 accumulation in the base. Nice test of near support. Looking for a good break higher from here to resume the breakout run.
Volume: 20.589M Avg Volume: 23.16M
BUY POINT: $59.55 Volume=30M Target=$69.95 Stop=$57.57
POSITION: XBT IG - Sept. $59c (57 delta)
http://www.investmenthouse.com/ct/xle.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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