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us stock market, trade stock
Begin part 3 of 3
THE PLAYS
Strong plays:
1) HITT: Strong volume Monday as it sits in a tight range on the 50 day EMA
2) VMSI: Nice leader ready to break higher
3) COHR: Solid volume continues as it starts back up.
4) GISX: Great volume and ready to move
5) VARI: Strong volume as it tried to make the breakaway higher.
6) WFT: Good volume bump as WFT moves of the 50 day EMA.
NEW PLAYS:
Upside plays:
Play Date: 05/22/2006
FMD (First Marblehead--$44.66; -0.34; optionable): Credit services
http://biz.yahoo.com/p/f/fmd.html
STATUS: Cup w/handle. Big 15 month base has formed and now using the 50 day EMA (44.26) the past 10 weeks as it forms the handle to the base. This is where the stock kind of bores everyone to sleep, moving laterally with some lower tests on low volume, weeding out the sellers. Never know when it will make the move, but when it goes it will be a good one. Nice doji Monday at the 50 day EMA. Maybe that is the signal for the move. Strong fundamentals and earnings growth.
Volume: 433.5K Avg Volume: 695K
BUY POINT: $45.85 Volume=1M Target=$55.00 Stop=$44.00
POSITION: FMD II - Sept. $45c (53 delta) &/or Stock
http://www.investmenthouse.com/ct/fmd.html
Play Date: 05/22/2006
HITT (Hittite Microwave--$33.57; -0.22; no options): Analog and mixed-signal integrated circuits
http://biz.yahoo.com/p/h/hitt.html
After Hours: $33.22
STATUS: Test 50 day EMA. A new issue in July 2005, HITT broke out from a 3.5 month base in late April, gapping higher on strong volume and strong earnings. It moved laterally for a week and then got caught in the downdraft of the market selling, dropping to the 50 day EMA (33.60). That was unfortunate in a way, but it also filled the gap. Nice tight lateral move on the 50 day with volume then surging Monday as it traded in a very tight range. Looking for the price to match that volume.
Volume: 703.9K Avg Volume: 178K
BUY POINT: $35.15 Volume=210K Target=$42.00 Stop=$33.40
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/hitt.html
Play Date: 05/22/2006
SYKE (Sykes Enterprises--$16.23; -0.18; optionable): ITS customer contact management
http://biz.yahoo.com/p/s/syke.html
STATUS: Test 50 day EMA. Nice breakout in early April from a 6 month base, rallying up the 18 day EMA (16.30) to 18. Then it used the recent market selling to test that move, coming back to the 50 day EMA (15.59), to test. Classic action: breakout run up the 18 day EMA, test the 50 day EMA, then start all over again. Good bounce off the 50 day Friday, then took a pause today. Still looks solid for the next break higher in the breakout run. Strong fundamentals growth.
Volume: 258.4K Avg Volume: 300K
BUY POINT: $16.85 Volume=370K Target=$20.25 Stop=$15.89
POSITION: UIK JC - Oct. $15c (65 delta) &/or Stock
http://www.investmenthouse.com/ct/syke.html
Play Date: 05/22/2006
VMSI (Ventana Medical Sys.--$47.18; +1.00; optionable): Medical instruments
http://biz.yahoo.com/p/v/vmsi.html
STATUS: Test breakout. Tremendous breakout in late April, blasting out of a 11 month base on strong earnings. It came back to test the break over the next two weeks, but it held the move, rebounding before hitting the 50 day EMA (43.49). Moved up the past week as the market sold, showing some better volume. Nice price move Monday but no volume yet. Money flow is running higher, and relative strength broke out ahead of price, a bullish indication for VMSI to follow it higher. Nice leader that last split in March 2005, set up in the new base, and is not ready for the next run.
Volume: 306.9K Avg Volume: 350K
BUY POINT: $47.85 Volume=425K Target=$56.95 Stop=$45.32
POSITION: UMI II - Sept. $45c (65 delta) &/or Stock
http://www.investmenthouse.com/ct/vmsi.html
CONTINUING PLAYS
Play Date: 05/20/2006
BMRN (Biomarin Pharmaceuticals--$12.76; +0.13; optionable): Biotech
http://biz.yahoo.com/p/b/bmrn.html
STATUS: Double bottom. Volume jumped up to average Monday as BMRN tested higher in a down market. Could not hold all the move, but is setting up nicely in a weak market. To recap: BMRN is trying to form the second leg of a 9 week double bottom base that formed roughly around the 50 day EMA (12.48), setting up for the breakout to take it to a 3 year high. Outstanding 5 to 0 accumulation in the base (5 up price weeks on rising volume to 0 down price weeks on rising volume) shows all buying as BMRN consolidates. Money flow is solid, turning higher the past week even as BMRN tested lower before bouncing Friday. Looking for BMRN to clear the 'hump' in the pattern; that is the breakout point for this kind of pattern.
Volume: 1.527M Avg Volume: 1.321M
BUY POINT: $13.50 Volume=2M Target=$16.25 Stop=$12.45
POSITION: NUR JV - Oct. $12.50c (52 delta) &/or Stock
http://www.investmenthouse.com/ct/bmrn.html
Play Date: 05/17/2006
COHR (Coherent--$35.04; +0.69; optionable): Lasers, precision optics
http://biz.yahoo.com/p/c/cohr.html
STATUS: Test 50 day EMA. Another good volume session Monday as COHR surged up to the 18 day EMA (35.53) on the high but could not hold all of the move. Needs to blast through that level to put the nails in any downside action. To recap: Strong earnings sent COHR higher in late April, breaking it out from a 9 month cup with handle base It did not get much farther, however, before the recent selling started. It sold off as well, but volume was low and below average as it came back on the test, holding near the 50 day EMA. Looking for volume to ramp up as COHR makes the break higher.
Volume: 331.247K Avg Volume: 342.892K
BUY POINT: $35.42 Volume=435K Target=$41.00 Stop=$33.95
POSITION: HRQ HG - Aug. $35c (56 delta) &/or Stock
http://www.investmenthouse.com/ct/cohr.html
Play Date: 05/20/2006
CTXS (Citrix Systems--$38.86; -1.09; optionable): On demand information access software, etc.
http://biz.yahoo.com/p/c/ctxs.html
After Hours: $38.69
STATUS: Test 50 day EMA Faded but volume was lower and it held the 50 day EMA (38.63) on the close after another modest intraday undercut of that level. Looking for some volume similar to Friday (4.5M) as it makes the move. To recap: CTXS made us some great coin this year, after the strong run up through early May it needed a breather. The market selling came along and pushed it back to the 50 day EMA. We said we were going to let it make the test and then move back in. It looks to have done that, undercutting the 50 day EMA intraday on Friday and then rebounding for a positive close on the best volume in a month. A strong market leader this one, and we are looking for CTXS to make us some more scratch as it rebounds off the 50 day.
Volume: 2.486M Avg Volume: 2.656M
BUY POINT: $40.88 Volume=4M Target=$49.00 Stop=$38.55
POSITION: XSQ IH - Sept. $40c (55 delta) &/or Stock
http://www.investmenthouse.com/ct/ctxs.html
Play Date: 05/17/2006
GISX (Global Imaging Systems--$39.02; -0.28; optionable): Office technology solutions
http://biz.yahoo.com/p/g/gisx.html
STATUS: Test 18 day EMA. Surged to 40.14 on the high but could not hold the move. Strong trade, however, indicating it is ready to make the move. Just overcome by a weak market Monday. Solid. To recap: GISX broke out from a 22 week cup with handle to start May, moving higher on strong volume. Nice pattern that used the 50 day EMA (37.97) as support, showing the big money staying with it, using the base to accumulation shares. Positive accumulation. Relative strength is moving higher this week even as GISX makes a modest pullback. Excellent action in the selling market, using the selling to test the 18 day EMA before making the next move higher.
Volume: 210.714K Avg Volume: 95K
BUY POINT: $40.11 Volume=150K Target=$47.95 Stop=$38.72
POSITION: QHU HH - Aug. $40c (52 delta) &/or Stock
http://www.investmenthouse.com/ct/gisx.html
Play Date: 05/16/2006
LRCX (Lam Research--$46.77; -0.84; optionable): Chip equipment
http://biz.yahoo.com/p/l/lrcx.html
After Hours: $46.77
STATUS: Test 50 day EMA. Good shakeout Monday as LRCX reached below the 50 day EMA (46.91) intraday and then rebounded to close at that level. This is the kind of move that sets up the next run higher. To recap: LRCX rallied to start May with a nice high volume break higher, moving out of a 13 week cup with handle base that formed over the 50 day EMA. It got caught in the selling, but most of the downside was on light to below average volume, and unlike many stocks, the pullback did not wreck its pattern. Want to see rising volume as LRCX moves through the buy point.
Volume: 2.895M Avg Volume: 3.101M
BUY POINT: $48.57 Volume=4M Target=$58.65 Stop=$46.55
POSITION: LMQ IJ - Sept. $50c (51 delta) &/or Stock
http://www.investmenthouse.com/ct/lrcx.html
Play Date: 05/20/2006
QCOM (Qualcom--$46.63; -0.44; optionable): Telecom licensing, equipment
http://biz.yahoo.com/p/q/qcom.html
After Hours: $46.74
STATUS: Test 200 day SMA. Still sitting on the 200 day SMA (46.03) despite the market selling, moving laterally along that support the past four sessions. Still looking for that bounce to give us the upside trade. To recap: QCOM was rocking along, leading the market higher with its steady climb up the 18 day EMA (now at 49.27) when it got broadsided by the May melee. It tanked to the 200 day SMA but found support at that level Wednesday through Friday, showing a solid volume bounce to end the week. This is where the institutions get on board or get off, and right now they look to be getting on. We are looking at this play in two ways. First we see a great trading opportunity here as QCOM rebounds. If it blows through the 50 day EMA (49.80) great; if not we can get a decent option trade out of that move. We have a feeling it is going back through the 50 day if the kind of volume we saw Friday persists. If it does, we let it run some for us.
Volume: 14.328M Avg Volume: 13.096M
BUY POINT: $47.75 Volume=15M Target=$53.00 Stop=$45.88
POSITION: AAO JW - Oct. $47.50c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/qcom.html
Play Date: 05/18/2006
VARI (Varian--$43.05; +0.06; optionable): Scientific instruments and vacuum products
http://biz.yahoo.com/p/v/vari.html
STATUS: Test 50 day EMA. Nice volume and a good surge Monday, but VARI could hot hold all of the move into the close. Still some solid action in a weak market. Still looks ready after this nice test of its breakout. Looks as if it is trying to lead. To recap: A common pattern, with many good stocks coming back to test this support level. VARI blasted higher in late April and again in early May, moving out from a 20 week cup with handle base. In the market selling it made a very orderly pullback on lower volume. Wednesday it reached all the way down to the 50 day (41.71) and then rebounded off the lows. Tried the move Thursday but the market was not ready for it. Solid pattern that formed on top of the 200 day SMA (39.14). Looking to move in as it continues the bounce.
Volume: 235.307K Avg Volume: 182.532K
BUY POINT: $43.31 Volume=275K Target=$49.95 Stop=$41.44
POSITION: IUA HH - Aug. $40c (64 delta) &/or Stock
http://www.investmenthouse.com/ct/vari.html
Play Date: 05/20/2006
WFT (Weatherford International--$51.26; -0.05; optionable): Oil and gas service company
http://biz.yahoo.com/p/w/wft.html
STATUS: Test 50 day EMA. Volume is starting to ramp for WFT as it sits on the 50 day EMA, posting its second above average volume session in a row. Now it just needs to deliver the price move. To recap: Strong breakout in April, moving out of a 12 week base that formed at the 50 day EMA (now at 49.79), rallying up the 10 day EMA (52.78). As with all energy stocks it got caught in the selling the past two weeks, but it held the 50 day EMA and then bounced Friday and Monday on rising, above average volume. Strong stock and if you did not know of the energy and commodities selling, it would look just like a normal pullback to test a breakout. That is strength. Looking to move in as it continues higher on strong trade.
Volume: 4.665M Avg Volume: 3.449M
BUY POINT: $52.32 Volume=4.5M Target=$62.78 Stop=$49.65
POSITION: WFT HU - Aug. $50c (65 delta) &/or Stock
http://www.investmenthouse.com/ct/wft.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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