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stock recommendation, stock investment information
Begin Part 3 of 3
CONTINUED PLAYS:
BREAKOUTS:
JAKK (Jakks Pacific--$24.99; -0.01; optionable): Toys & Games
http://biz.yahoo.com/p/j/jakk.html
STATUS: Broke out of the test of the breakout after the stock moved into the 10 day MVA Thursday. Volume was strong on the breakout, but was lower (still above average at 381,900; avg. 324,000) as with the overall market; it is for that reason that we are looking for JAKK to continue its breakout in the coming week. Look for volume rising on that move. The stock held Thursday's breakout level with a loose doji and a penny loss on the day. Shows huge money flow and positive buying. Target: 29
BUY POINT: Riding positions taken at the previous buy point (24), the stock remains a technical buy to 25.20 on this breakout.
POSITION: Stock and/or January $22.50 (UFF AX) or March $20 calls to buy (UFF CD).
http://www.investmenthouse.com/ct/jakk.html
TEST OF BREAKOUT:
IGEN (Igen Intl--$35.95; -0.33; optionable): Scientific & Technical
http://biz.yahoo.com/p/i/igen.html
STATUS: Testing the recent strong breakout from a cup/flat base pattern. IGEN hit a high this month at 38.13 on the breakout, then pulled back on lower volume to catch support at the 10 day MVA (35.11) the last three days of the week. On below average volume of 152,200 (avg. 201,000), IGEN was up from that support again Friday, closing with a higher doji after being unable to move above Thursday's closing price. Still a nice consolidation from which we expect a move up. Strong money flow and buying. Target: 46
BUY POINT: Aggressive: 37 on volume of 205,000 or higher. Stop: 34.41 (7%).
POSITION: Stock and/or January $35 calls to buy (GQ AG).
http://www.investmenthouse.com/ct/igen.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.
GMST (Gemstar-Tv Guide--$27.73; +1.67; optionable): Consumer Durables
http://biz.yahoo.com/p/g/gmst.html
STATUS: Moving up on stronger volume in the ascending wedge (volume up to 4.43 million; avg. 4.6 million), a pattern developed after GMST broke back over the 50 day MVA just over 2 weeks ago. Looking for a run up to the 200 day MVA on the breakout (at 34). This is a nice-looking pattern! Good money flow and buying.
BUY POINT: Breakout: 28.42 on volume of 6.2 million or higher. Stop: 26.43 (7%)
POSITION: Stock and/or January $22.50 calls to buy (QLF AX; low open interests).
http://www.investmenthouse.com/ct/gmst.html
CHEZ (Suprema Specialties--$14.00; +0.09; no options):
http://biz.yahoo.com/p/c/chez.html
STATUS: Holding the ascending wedge that formed in the range of where a handle should form in the stock's 5-month base, showing a Friday doji that was up from a tap at support. Volume was rising on the move, up to 81,700 (avg. 95,272). That is not our favorite pattern for long, sustained moves; however, it is a test of the recent breakout, and with the short term moving averages encroaching from below, is tightening nicely and can potentially offer another nice move. We are looking for an initial target at the basing high (18) on a breakout. CHEZ has strong money flow, and buying looks good most recently.
BUY POINT: Aggressive: 14.20 on volume of 130,000 or higher. Stop: 13.21(7%).
POSITION: Stock.
http://www.investmenthouse.com/ct/chez.html
PMCS (Pmc-Sierra--$22.79; -0.23; optionable: Semiconductor
http://biz.yahoo.com/p/p/pmcs.html
STATUS: Continues to hold a nice pattern, a pennant with a strong lower leg that held support at the 10 day MVA all week. We would have liked volume to drop back down below average before Friday, but the pattern is tightening up very nicely with the tight doji just above support Friday, and volume was back down to 9.3 million (avg. 10.8 million). PMCS hit our aggressive buy point (22), but pulled off the high of 23.56. Looking for a breakout over the pattern high now, with an initial target at the 200 day MVA (initially), 29.24. Still a neat pattern. The stock is showing high money flow.
BUY POINT: Aggressive: 23.40 on strong, rising volume. Stop: 21.76 (7%). Breakout: 24.64 on volume of 14.6 million or higher. Stop: 22.92 (7%).
POSITION: Stock and/or January $20 calls to buy (SQL AD).
http://www.investmenthouse.com/ct/pmcs.html
BASING/TRADING RANGES:
SLOT (Anchor Gaming--$60.90; +2.15; optionable): Leisure
http://biz.yahoo.com/p/s/slot.html
STATUS: Made a nice move up Friday in the handle to the 6-month cup base. Volume was building all week as SLOT sold down to the 18 day MVA, but by Thursday the stock was looking more positive with the closing hammer doji, and Friday was back over the 10 day MVA on high volume (865,700; avg. 305,000). Looking for the breakout if this move follows through, and it looks good so far. Money flow and buying look good, and relative strength is making a breakout move. Target: 76, but again, if we get the 10% move and the move looks like it's lost steam, we will look at taking profits there.
BUY POINT: Aggressive: 61.50 on continued rising volume. Stop: 57.20 (7%). Breakout: 63.17 on volume of 434,000 or higher. Stop: 58.75 (7%)
POSITION: Stock and/or January $55 calls to buy (QLT AK).
http://www.investmenthouse.com/ct/slot.html
WLP (Wellpoint Health--$117.90; -0.10; optionable): Health Services
http://biz.yahoo.com/p/w/wlp.html
STATUS: Continues to pull back in the handle to its 13-month cup, showing a tight doji on top of the 10 day MVA (117.49). Volume was up to 685,500, still below the average of 719,090. It can move up from here or continue to develop the handle, since the cup is 13 months long and may need a longer handle consolidation. Looking for a breakout after that. WLP has strong money flow and high relative strength. Target: 148
BUY POINT: Aggressive: 120 on volume of 1.07 million or higher. Breakout: 123.03 on volume in the range of 1.07 million or higher. Stop: 114.42 (7%).
POSITION: Stock and/or January $115 calls to buy (WLP AC).
http://www.investmenthouse.com/ct/wlp.html
HD (Home Depot--$46.65; +2.63; optionable): Retail
http://biz.yahoo.com/p/h/hd.html
STATUS: The stock made a big turnaround Friday after it sold down out of the lateral pattern earlier in the week. We were looking for a breakout then but Tuesday's selling foiled the move and destroyed the pattern. Friday HD gapped up on the opening price (45) then was up the rest of the day on strong volume (14.7 million; avg. 8.3 million) on news that the company would meet projections for the 4th quarter. It is now back at the level of the lateral consolidation. It closed, too, at the down trendline that was resistance to the previous pattern, so we are going to look for a breakout through that, if the momentum sustains. If it doesn't, we will look at it after it settles out some more. Initial target is 51.
BUY POINT: Over 47 (intraday high that tapped just over the down trendline), on continued strong volume. Stop: 43.80 (7% from a buy point at 47.10).
POSITION: Stock and/or January $40 calls to buy (HD AH).
http://www.investmenthouse.com/ct/hd.html
ORLY (O'reilly Automotive--$33.44; +1.49; optionable): Auto Parts
http://biz.yahoo.com/p/o/orly.html
STATUS: Making a good move in the handle to its 4-month cup base, hitting the aggressive buy point, 32.60. Volume was up to 404,000 (avg. 465,000) and the stock much closer to the buy point on this solid move up from what turned out to be sturdy support (the 18 day MVA, 31.74). Looking for the breakout. ORLY continues with excellent money flow, and relative strength is breaking out ahead of price, which is bullish. Target: 41
BUY POINT: Breakout: 34.13 on volume of 704,000 or higher. Stop: 31.74 (7%)
POSITION: Stock and/or January $30 (OQR AF; 0 open interests).
http://www.investmenthouse.com/ct/orly.html
BORL (Borland Software--$14.46; +0.51; optionable):
http://biz.yahoo.com/p/b/borl.html
STATUS: Tried the breakout and did close above the previous November high at 14.35, but was just inside our buy point (one-eighth point above the high) by the end of the day. BORL did make it up to a high of 15 in the early breakout, but over the course of the day pulled back down. We like the close above the previous highs and will look for the stock to move back up, although such action can portend more consolidation before it gives a strong breakout. This sure looked like it was headed that way; we will see what the stock can offer this week. Money flow and buying continue to look strong. Volume was up to 1.4 million (avg. 676,000). Target: 17
BUY POINT: Aggressive: 14.48 on volume of 1.1 million or higher. Stop: 13.47 (7%). Breakout: Over 15 on strong, above average volume.
POSITION: Stock and/or January $12.50 calls to buy (BLQ AV).
http://www.investmenthouse.com/ct/borl.html
VRTS (Veritas--$38.89; -1.50; optionable): Software.
http://biz.yahoo.com/p/v/vrts.html
STATUS: Is trying to form an ascending wedge pattern, which is holding above the 10 day MVA until Friday, when the stock closed just a cent under that support. Volume continues to pull back below average (down Friday to 11.5 million; avg. 15 million). It is possible for VRTS to pull back to the 18 day MVA (37.49), but we will look for a bounce back up and breakout from the pattern in a tech rally. When we first started looking at this pattern, we were considering a covered call sale play for a move up to the 200 day MVA, currently at 48.52. On a run up to that resistance, we can look at selling the calls if the stock tops out. At this point the December $35s are selling for $5.60 with a good delta of 0.73. That should put them at about $7.80 at the buy point, and on a move up to around 48 they would be selling at about $13 for a return of about 16-17%.
BUY POINT: Aggressive: 41.80 on volume of 15.5 million or higher. Stop: 38.87 (7%)
POSITION: Stock on the buy point. Calls to sell on topping: December $35 calls (VIV AG).
http://www.investmenthouse.com/ct/vrts.html
CHKP (Check Point Software Tech--$38.35; -1.57; optionable): Security Software
http://biz.yahoo.com/p/c/chkp.html
STATUS: Continues to pull back in the handle of its 4-month cup with handle base, formed below the 200 day MVA (47.32). Volume was higher earlier in the week, but the last 2 days of the week fell back below average, down to 8.8 million by Friday (avg. 9.5 million). We are looking for CHKP to continue to hold the 18 day MVA until it can rally to a breakout over the November highs, with aggressive players looking at positions on a strong move up from this support. The stock is showing positive buying. Target: initial at the level of the 200 day MVA, 47.
BUY POINT: Aggressive: 41 on rising volume. Breakout: 43.13 on 14.2 million or higher volume. Stop: 40.08 (7%)
POSITION: Stock and/or January $30 or $35 calls to buy (KEQ AF or AG).
http://www.investmenthouse.com/ct/chkp.html
KLAC (Kla-Tencor--$50.23; -2.53; optionable): Semiconductor
http://biz.yahoo.com/p/k/klac.html
STATUS: KLAC is in a cup base and trying to settle out in a new handle after trying a breakout Tuesday. It pulled back to the 10 day MVA Friday (49.82) on strong volume, moving back over that support after a lower test at 49.60. It has bounced for three days here after it broke out in the cup with handle on Tuesday. The move was short-lived, however. Volume dropped back down when the breakout turned right around, but was back up on Friday's bit of selling (12.7 million; avg. 9.3 million). KLAC can pull back to the 18 day MVA (48.46) in order to create a better handle, so we will look for that and the strong move back up in a chip rally. It needs to settle down. Money flow remains high. Target: 60
BUY POINT: Breakout: Over 53.24, on volume in the range of 13 million. Stop: 49.51 (7%). Aggressive on a move back up from the 18 day MVA: 50.65 on volume in the range of 9.5 million. Stop: 47.26 (7%).
POSITION: Stock and/or January $45 calls to buy (KCQ AI).
http://www.investmenthouse.com/ct/klac.html
Updating this covered call play:
BRCD (Brocade--$32.80; +1.10; optionable): Computer Peripherals
http://biz.yahoo.com/p/b/brcd.html
STATUS: BRCD has been trying to break out of a lateral-type movement in price (formed since early November). It has had fits and starts, and on Wednesday it sold back but did not linger at the 50 day MVA, tapping nearly down to that support. Next day it gapped higher on the opening and was up from there through Friday, aggressive players were looking at entry points with that move. Friday BRCD broke over the 200 day MVA with volume still above average though falling to 2.08 million (avg. 16.8 million). From here, we can look for the stock to hold the new support (the 200 day is at 32.34) for a move up in a tech rally. On that move we will again look at buying stock for a covered call sale play, once the new run tops out and the stock pulls back. Currently, the December calls are selling for $3.90; for a breakout and run up to the 40 range (a $5-$6 move), the calls would be selling for around $7-$8. That is a gain of about 13-15%. The stock is in good position for the move up.
BUY POINT: Breakout: 33.40 on volume in the range of 22 million. Stop: 31.06 (7%).
POSITION: Stock and/or January $25 calls to buy (UBF AE).
http://www.investmenthouse.com/ct/brcd.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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stock recommendation
stock investment information
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