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yahoo stock, trend trading stock
Begin Part 2 of 2
TEAM TRADES
As mentioned in the weekend report, we bought BORL stock on its breakout from a cup with handle Friday. The stock hit a high of $15, but like so many stocks that day, pulled back and closed just over its breakout point.
What we have been seeing in our Time & Sales chart is instructive. On Friday, there were many block trades made by institutions. A bunch of these came in before the close, and the trades were made as much as $0.12 below the current bid. While we would normally look at the ask side to see buy-side trades, the block trades at the lower price still represented accumulation because the bid and ask were adjusted to reflect those trades on the buy side. A couple of things were most likely going on.
First, market makers sometimes bundle many orders at the end of a session into a few, larger trades. Thus we could be looking at some orders that were put in earlier and are being filled later in the session in a bundle at the earlier price. It does not really impact the bid and ask once the trades are completed as you will see the bid and ask bounce right back up to where they were before the trades took place.
Second, there are times that large buyers are able to broker a better price when buying or selling stocks in large blocks. It is the market maker taking on the risk in buying the shares and having to turn them while still keeping an orderly market. Thus the buyer can sometimes get a 'negotiated' price that does not disrupt the market and gives a better deal. Today, when the stock showed a doji on much lower volume, we saw some more of that action, with a few large trades executed a couple of cents below the bid. We also saw some block trades made in a manner so they would not appear as block trades; that is, a series of consecutive trades made in 4600 and 400 increments adding up to in excess of 40,000 shares. That is another sign of an institution buying the stock.
With the solid pattern and accumulation, BORL looks good for a move back up from here with the market. We are targeting 17 initially for the next move, and at the 16-17 level we have some alternatives beyond just taking our profits. Premiums for January $15 calls should rise well over $2 if the stock makes 17 (it will be $2 in the money so they will more likely be 2.50 or better, and on topping signs at that level we can look at making a covered call play, selling the calls as the stock starts to pull back. Of course, we bought the stock below the $15 strike price, so if we end up getting called out we realize another $0.50 per share premium, for a return in the neighborhood of 20%. If we are not called out or we buy the calls back at a cheaper price as it tests its breakout, we can pocket the profit on our calls and continue to ride the stock on the next move up.
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: UTSI. TSCO (noted on the weekend report; it bounced from the 18 day MVA for a $1.75 gain but volume dropped back, even further below average).
Stocks/Indexes from Saturday's report:
UTSI: Added to Friday's nice move, but pulled off the high of 25.29, erasing a good gain.
ENTU: Back at the 10 day MVA on low volume. Still looks good.
AMZN: Pulled back from the doji, closing above the 10 day MVA. A bit further down than we wanted, but we will see if it can move back up from here.
HDI: Pulled back from Friday's breakout move in the handle.
CMNT: Another doji with volume dropping back below average in the handle.
IGT: The lower volume Friday continued its trend today and IGT pulled back in a doji on below average volume. It will try to hold the 10 day MVA (60.94).
SOX: Back down to the 18 day MVA, a pullback of almost 8 points. Still good.
Previous plays:
CATT: Still in the tight lateral consolidation. Looks good.
DRI: Back over the short term moving averages with a volume rise. In a handle now; buy point on the breakout is 32.61 (closed today at 31.04).
ESST: Making a strong move up from the 10 day MVA after a lower volume pullback. Buy point over 20.77 (intraday high); stock and/or January $17.50 calls to buy.
HTLD: Went ahead and broke the 10 day MVA even without stronger volume. It moved higher than that, but pulled off the high; look for the 10 day to hold it now.
JNPR: Could not hold support (18 day MVA) so with volume even lower, will look for the 50 day MVA to hold it now; the stock tapped that support and moved up, but showed a doji below the 18 day MVA.
MRBK: Looks good in a handle here, on low volume. We will check it out again tomorrow. Buy point for breakout over 42.30.
OCLR: Held the 10 day MVA on low volume; bounced back from a low that tested below the 18 day MVA. Good move.
Index: QQQ with another doji, this one lower but holding above the 18 day MVA with volume slipping even lower below average.
SUBSCRIBER'S CHOICE:
GNTA (Genta Inc--$16.14; +0.13; optionable): Biotechnology
http://biz.yahoo.com/p/g/gnta.html
STATUS: This biotech stock is in a huge base dating back years (off the lows but still deep), but more recently broke out of another large base of 21 months, which itself is composed of several smaller bases. From the last cup with handle of about 4 months, GNTA broke out and ran to a high in November at 18.11. From there it has pulled back and tested the 18 day MVA three times in a consolidation off the high. Volume is lower than it was on the breakout, but generally remains above average. That action should settle down more, and we would be looking for increasingly lower volume as the stock moves laterally from here. At any rate, GNTA has excellent money flow, and on a move over the high we would peg a target at the 22 range. Aggressive players can look at taking positions on a move over 17, to clear out a lot of choppiness in the stock movement since the pullback began.
http://www.investmenthouse.com/cd/gnta.html
Best Plays: Like them all tonight:
1) BLTI: Breaking out and still a buy!
2) CPWR: Ditto.
3) SLNK: Forming a handle on decreasing volume.
4) BBBY: A nice consolidation in the handle.
5) AMAT: In good position for a chip rally.
Updates:
BLTI (Biolase Tech--$6.48; +0.53; no options):
http://biz.yahoo.com/p/b/blti.html
STATUS: We covered BLTI's last breakout and recently noted the new handle formed over the last few days. Monday the stock hit our new buy point (6.44, included on the weekend report) as volume surged very nicely to 510,300 (avg. 175,000). The stock remains a buy on this breakout, still within our 5% limit for buying on breakouts, and we are looking for it to clear the 19-week base (prior high is 6.70). BLTI has excellent money flow and buying. Target: 8
BUY POINT: Remains a buy up to 6.76 on the breakout.
POSITION: Stock.
http://www.investmenthouse.com/cd/blti.html
CPWR (Compuware--$11.63; +0.45; optionable): Application Software
http://biz.yahoo.com/p/c/cpwr.html
STATUS: Another previously covered stock that is now breaking out - to the upside, which is not what we were originally looking for with CPWR. It was earlier covered as a descending wedge, but Wednesday made it back over its 200 day MVA on strong volume. After a breather Friday, the stock surged up today on strong volume (4.06 million; avg. 3.4 million), breaking out of the flat base formed since late October, a base that is just below mid-point in a cup base of 4 months. CPWR remains a buy on this breakout, and with the close at the intraday high, looks ready to give a right decent move here. Shows strong and rising money flow. Target: 14
BUY POINT: A buy on the breakout up to 12 on continued strong volume (4.6 million or higher). Stop: 10 83 (7% from a buy point at 11.65).
POSITION: Stock and/or January $10 calls to buy (CWQ AB).
http://www.investmenthouse.com/cd/cpwr.html
SLNK (Spectralink--$16.37; -0.27; optionable): Telecom
http://biz.yahoo.com/p/s/slnk.html
STATUS: Formed a small cup with handle base of 10 weeks, and pulling back in the handle for the last 2 days with volume decreasing very nicely (down Monday to 173,300; avg. 487,000). The stock on the low tapped at 16, which looks like sturdy support at the 10 day MVA (15.90) and a series of prices dotting the landscape since August. We like the low volume and the pullback to support, often a winning combination of elements. Looking for a breakout over the November (handle) high at 17.20. Money flow looks good. Target: 21
BUY POINT: Breakout: 17.33 on volume of 731,000 or higher. Stop: 16.12 (7%).
POSITION: Stock and/or January (0 open interests) or March (15 open interests) $12.50 calls to buy (SXU AV or CV).
http://www.investmenthouse.com/cd/slnk.html
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
ACS: Closed just under its 18 day MVA, though volume was lower. Support looks good at 92.50 (the stock closed at 93.61).
NVDA: Looks good in the ascending wedge pattern. See the 11-28 report (buy point is 56.12 on volume in the range of 14 million.
IDPH: Forming another ascending wedge as a handle. Volume at or below average in the pattern, lower Monday but still strong at average levels. Buy point is 71.32 on volume of 5 million or higher.
UP & COMERS PORTFOLIOS: Here is the new portfolio list: BBBY, EPIQ, KKD, MMS, NDN, SRCL, CPRT, BJ, EBAY, THQI, KG.
EBAY: Pulled back as volume dropped back well below average. Showed a doji on the closing price, near the top of the day's trading range. Can hold here from other price support (May and July), but we would like to see a good handle form. Support at the 65 range as well.
BBBY: Bed Bath & Beyond--$32.40; -0.07; optionable): Retail
http://biz.yahoo.com/p/b/bbby.html
STATUS: Showing its third tight doji on a pullback off the November high of 33.73, a new handle to the 4.5-month ragged cup. BBBY made a breakout move from the base the day before reaching that high, but volume wasn't supportive and the breakout failed. Now BBBY is consolidating laterally with the dojis, and volume is falling increasingly lower below average (2.3 million Monday; avg. 4.1 million). The stock looks ready to hold the 10 day (32), at the level of the May and June highs and another consolidation at the end of July, first of August. This is a decent (new) handle pullback to the cup; we will see what BBBY can do it. Excellent money flow. Target: 41
BUY POINT: 33.86 on volume of 6 million or higher. Stop: 31.49 (7%).
POSITION: Stock and/or January $30 calls to buy (BHQ AF).
http://www.investmenthouse.com/cd/bbby.html
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 (Applied Materials--$39.27; -0.47; optionable): Semiconductor
http://biz.yahoo.com/p/a/amat.html
STATUS: AMAT remains below its 200 day MVA (44.31) but is looking better again as it tries to form an ascending wedge above support of the short term and 50 day MVAs. Volume has been below average for the last 2 weeks save a spike in volume 5 days ago when AMAT stretched up toward the 200 day. For the last 2 days the stock has shown 2 tight dojis and closed today above the 18 day MVA (39.12), with volume sinking back down to 13.4 million (avg. 17.8 million). Looking for a strong move up in a chip rally; aggressive players can look at jumping in on a strong move over the intraday high (which was 40.38). AMAT shows good money flow. Target: 53
BUY POINT: Aggressive: 40.50 on rising volume in a rally. Stop: 37.67 (7%). Watch for potential resistance at the 42 level. Breakout: Over the 200 day MVA on volume of 24 million or higher. Stop: 41.39 (7% below a buy point at 44.50).
POSITION: Aggressive: January $35 or $37.50 calls to buy (ANQ AG or AU).
http://www.investmenthouse.com/cd/amat.html
MSFT: Remains in good position for a rally. The stock is holding above the 10 day MVA as volume slips lower below average. November high is 68.34, but aggressive players can look at getting in here if the stock moves over 65 on strong volume.
BRCM: Slid below the 18 day MVA on lower volume. Can find support anywhere between here and the 50 day MVA (39.24) since prices are pretty thick since May. This pullback is just offering another buying opportunity for this winner.
JNJ: Getting a good dose of "pullback" and is holding at the 50 day MVA.
CHKP: Showing a doji as it closed just under the 18 day MVA. Volume was even lower and well below average. We will look for a move back up in the handle.
BUD: Sold down to the 50 day MVA today; bounced from there but closed below the 18 day MVA. In a volatile handle.
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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yahoo stock
trend trading stock
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