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yahoo stock, trade stock
Begin Part 2 of 2
THE PLAYS:
Reading the Plays: Please note that when we reference the 10, 18, and 50 day moving averages (MVA), those are exponential moving averages (EMA). The 200 day moving average is always simple (SMA). We will note when we reference a particular MVA differently, e.g., a simple 50 day MVA. Please click on the Yahoo and chart links for company and charting information. A "prior high" refers to the high at the start of a base.
For conserving space on listings of stop losses, the symbol (7%) indicates that the stop is 7% below the buy point.
Good movers: KRON broke out on strong volume! Looks like it can tack on more. TIER was up on strong volume; breakout point is 19.84 though this was one to get in on early in the test of the breakout (and move off the 18 day MVA). EMLX benefited from the pullback yesterday, popping up over three points today.
Not a ton today. PENN added to its breakout, but showed a doji on higher volume; it hit in the range of the 5% limit on breakouts on the intraday high.
Stocks/Indexes from Wednesday's report:
YHOO (subscriber's choice): Very nice doji on the 200 day MVA on high volume.
CATT: Moving up on rising volume from the lateral pattern.
OCLR: Popped higher, gapping up on the open and moving on rising volume.
EAT: Started a move up with volume climbing.
NVDA: Gapped almost 4 points higher on the open, then moved back to close at some support above the short term moving averages. Volume was huge. Still ended positively (over 2 points) on the day. Looking for the stock to find the next bottom and start again.
Previous plays:
CPWR: So much for the descending wedge; the stock made a nice move back over resistance at the 200 day MVA, and volume was backing the move as it rose.
HTLD: Holding the 18 day MVA on low volume in the handle. Will look for a move back up.
ITRI: Trying to wedge at the 18 day MVA and was up on rising volume today. Buy point over 30.35 from this consolidation that formed after a nice run up from the September lows.
JNPR: Volume did drop back below average, and JNPR held at the 18 day MVA with a pretty tight doji. Good.
NVLS: Was up on stronger volume today, but after hours the company reported a lackluster outlook for the quarter. It was down almost three points after hours (at the time of this writing).
QLGC: Was up on stronger volume, and looks ready to take out the November high if this move continues (high is at 50.44).
SUBSCRIBER'S CHOICE:
WEDC (White Electronic Designs--$6.04; +0.04; no options): Semiconductor
http://biz.yahoo.com/p/w/wedc.html
STATUS: WEDC is off the lows in a large base of 15 months, highs near 17. The stock made a super run up in late October, then pulled back much of this month, hitting the 50 day MVA (current just under 5) just over a week ago. From there is has moved back over the short term moving averages and on low volume is consolidating there. This can be called a handle to a cup base that began at the end of January, so look for the stock to head back up from here. WEDC is showing excellent money flow and buying, so look for a breakout over the handle high at 7.45.
http://www.investmenthouse.com/cd/wedc.html
Best Plays:
1) QCOM: Ready to move up after holding important support.
2) DFXI: A star doji on a low-volume pullback - good action.
3) Indexes: The SOX and QQQ are wedging.
4) KKD: Ready for a moving average bounce.
Updates:
GDT (Guidant--$48.55; -0.28; optionable): Health Services
http://biz.yahoo.com/p/g/gdt.html
STATUS: Forming a handle now to the 9-month cup with handle, a base with much of its pattern below the 200 day MVA, over which GDT broke mid-October. It soon formed an ascending wedge, from which it most recently broke out and is now pulling back in the handle. It can take a few more days in which to complete this new consolidation, but we are looking for another strong breakout move once it does. GDT shows excellent money flow and high relative strength, with buying improving. This cup is part of a much larger base that started in spring of 2000. Volume dropped down from average to 1.45 million (avg. 2.4 million). Target: 62
BUY POINT: Aggressive: 49 on volume in the range of 3.6 million. Stop: 45.57 (7%).
Breakout: 51.63 on volume of 3.6 million or higher. Stop: 48.02 (7%).
POSITION: Stock and/or January $45 calls to buy (GDT AI).
http://www.investmenthouse.com/cd/gdt.html
Looking at a tech stock for a potential covered call sale play:
QCOM (Qualcomm--$58.42; +1.13; optionable):
http://biz.yahoo.com/p/q/qcom.html
STATUS: Holding above the 18 and 200 day MVAs in the cup with handle pattern. Volume continues to drop (10 million Thursday; avg. 17 million), but QCOM moved up from the low at 56.50 to make it back over those two moving averages; it closed just below the 10 day (at 58.86). We are looking for a move up on rising volume in a rally, and can look at buying stock for a covered call sale play once the move tops out and the stock starts to fall back. Since the stock is giving some room for taking aggressive positions, we can look at playing it from here and/or on the breakout. From here, the January $57.50 calls are selling for $5.70; a run up to 62 would have them selling for
about $8.00, a return of about 14%. Anticipating at least a $5 run on the breakout would put the calls selling at about $11.00 another gain of about 14% and likely better, with the delta (now at 0.58) improving. Target: 75-76
BUY POINT: Aggressive: 58.90 (over the 10 day MVA at 58.86) on strong and rising volume. Stop: 54.78 (7%). Breakout: 62.60 on volume of 26 million or better. Stop: 58.22 (7%).
POSITION: Stock on the buy point. Calls to sell on topping: January $57.50 calls (AAO AY).
http://www.investmenthouse.com/cd/qcom.html
DFXI (Direct Focus--$27.00; +0.29; optionable): Consumer Durables
http://biz.yahoo.com/p/d/dfxi.html
STATUS: On the report November 15 as a subscriber's choice, and the stock continues to improve. DFXI is currently pulling back in a short handle to a base of almost 5 months, with volume falling back below average in the handle (the last three months in a flying W with handle). Today it was down again at 361,700 (avg. 576,000) with the stock showing a tight doji (a star doji, which at the bottom of a sell-off or pullback is a strong indicator of a turn back up) after tapping lower support, the 10 day MVA (26.40). We are looking for a move back up and breakout over the November high at 28.75. Target: 35. DFXI has strong money flow and buying.
BUY POINT: Breakout: 28.88 on volume of 864,000 or higher. Stop: 26.86 (7%).
POSITION: Stock and/or January $23.38 (BFF AW; good delta with low open interests) or January $25 (DQF AE; delta currently at 0.69 with sufficient open interests) calls to buy.
http://www.investmenthouse.com/cd/dfxi.html
Indexes:
SOX (Phili Semi--$533.17; +21.73; optionable):
STATUS: The index has formed an ascending wedge with upper resistance at both 535 and 555 (the latter at the level of two highs in the pattern). It bounced nicely from the 18 day MVA today, and as the rally goes forth we look for a continued climb. A breakout from the pattern presents aggressive entry points since the 200 day MVA is above the wedge at 563. Thus, the highest buy point is on a breakout; below that are 2 aggressive entries at 537 (the index hit 536.67 three times in the last few days) and just over 550 (over Tuesday's intraday high, which would be on a breakout from the wedge itself). Resistance may be stronger just below the lowest buy point, however.
BUY POINT: Aggressive: 537 in a chip rally. Breakout over the 200 day MVA: 550.33 on rising volume.
POSITION: Aggressive: December $530 calls to buy (SJX LF). Breakout: December $540 or $550 calls to buy (SJX LH or LJ).
QQQ (Nasdaq 100--$39.95; +1.20; optionable):
STATUS: Another ascending wedge is being formed by the QQQ; the pattern has an errant high (from Tuesday) that at 40.97 tapped at the current level of the 200 day MVA (actually at 41.24 today). We are looking for a breakout from the pattern for taking aggressive positions, with a move over the 200 day MVA offering a higher level buy point. The index has had a nice run up from the September lows, and needed this consolidation. We will see if it can break both resistance levels. Target: initial, 42.50
BUY POINT: Aggressive: 40.50 on volume in the range of 113 million (was down Thursday to 83.6 million; avg. is 84 million). Stop: 37.67 (7%). Breakout over the 200 day MVA: 41.37 on similar volume. Stop: 38.47 (7%).
POSITION: January $40 calls to buy (QQQ AN).
PORTFOLIOS: Each report, we look at these to see which is in a buy position. We don't cover them all each time, just the ones that look ready to pick up a few shares.
THE LEADERS: New Leaders (new list): ACS, NVDA, DGX, FRX, LLL, CACI, AJG, KRON, MIKE, BMET, APPB, LOW, IDPH, TARO, MYL, IGT, VRSN
IGT: Held support at the 18 day MVA in the handle. Volume was high, but the stock closed at the top of its range (a hammer doji). Looks ready to move up.
ACS: Looks ready for a move up from the 18 day MVA, after testing the run up from the 50 day MVA earlier this move. Volume has been low on the pullback to this support.
IDPH: Bounced from the 18 day MVA with volume still strong though just lower. Looking for a breakout over the November high at 70.82.
AJG: Is moving up again, despite lower volume.
APPB: Up on stronger volume again. Trying to get over the November high at 33.91; closed at 33.07.
UP & COMERS PORTFOLIOS: Here is the new portfolio list: BBBY, EPIQ, KKD, MMS, NDN, SRCL, CPRT, BJ, EBAY, THQI, KG.
KKD (Krisy Kreme Doughnuts--$36.20; -0.50; optionable): Leisure
STATUS: Doughnut time. The stock was in a cup with handle pattern but lost the handle over the last 2 days, breaking support at the 18 day MVA and today closing with a doji at the 50 day MVA (36.06). This is where strong stocks hold on in uptrends. Volume has been high the last three sessions as the stock sold down, but was lower today with the closing doji (at 1 million; avg. 753,045). That points to a hold at the support, and a look at the chart shows the last run KKD made from this support level - 8 points just outside of two weeks (12%). We are looking for a similar move here. The stock has excellent money flow, and buying is trying to pick up here. Initial target: 42; on a breakout from the 6-month base, 50.
BUY POINT: Aggressive: 36.50 on rising volume. Stop: 33.95 (7%).
POSITION: Stock and/or January or February $35 calls to buy (KKD AG or BG).
http://www.investmenthouse.com/cd/kkd.html
THQI: Made a strong move up in the handle; breakout is over the November high at 59.79 but that is still out (the stock closed at 56). Stock and/or January $50 calls to buy (QHI AJ).
MEMBER PORTFOLIO: New portfolio as selected by the subscribers. Some of these stocks are still struggling to move higher in their bases, and will likely continue to trade in close ranges just like the market. We'll be ready to catch them when they are ready to move. The new list: BRCM, CHKP, AMAT, JNJ, MSFT, AOL, HGSI, BUD, PXLW.
Old members: BRCM, CHKP, CSCO, EMLX, IDTI, INTC, JDSU, MVSN, NT, PWER, SUNW, VTSS
AMAT: Forming an ascending wedge. Breakout point is over 42.18, but the 200 day MVA is ahead at 44.35 (the stock closed at 41.45). Aggressive entry points at 42.18, stock and/or January $35 calls to buy (ANQ AG). Problem: NVLS, in the same sector, gave a gloomy outlook, and it hurt the entire sector.
MSFT: Was up over 2 points today but volume is still below average. November high is at 68.34. Looks like MSFT will hold above the 200 day MVA for now, support from where it bounced today.
JNJ: Down to the 50 day MVA today on a downgrade. The stock has needed a correction, but this was a sharp selloff. Beware if it breaks below the 50 day MVA (58) on strong volume again.
CHKP: In good position still for a move up.
HGSI: Lost the wedge-type pattern, but may be able to hold support at the 50 day MVA, just above where price closed.
PXLW: After yesterday's pullback, looks ready to move up again. 200 day MVA is at 18.77.
Good Investing!
Jon L. Johnson and The Daily Staff
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 of 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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