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Begin part 3 of 3
THE PLAYS
Good movers: CC; MGI; OII; PRFT; SYKE
Strong plays:
1) GILD: Nice bottom above the 200 day SMA.
2) PPDI: Big volume as PPDI moves off the 50 day EMA.
3) VSH: This time it looks ready with strong volume on the bounce off the 50 day EMA.
4) LFUS: Another stock showing strong volume in a nice pattern.
5) PKE: Strong volume of the 50 day EMA.
6) UARM: Bouncing off the 50 day EMA on volume.
NEW PLAYS:
Upside plays:
Play Date: 05/31/2006
GILD (Gilead Sciences--$57.33; +1.56; optionable): Biotechnology
http://biz.yahoo.com/p/g/gild.html
After Hours: $57.33
STATUS: Double bottom w/handle. GILD spent 2005 on a 45 degree trajectory higher. After that move it needed a breather and peaked in late April at 66. It then fell into the current 6 week base, making two bottoms at the 200 day SMA (54.14), then forming something of a handle this week on low, below average volume. Classic double bottom action with the right leg undercutting the left and then the rebound. Looking for a strong move through 57.50 to clear the 'hump' in the pattern and deliver the breakout. Strong market leading stock that needed a breather and took it and now is ready to move back up.
Volume: 4.133M Avg Volume: 4.854M
BUY POINT: $58.15 Volume=7M Target=$69.00 Stop=$56.00
POSITION: GDQ KA - Nov. $57.50c (58 delta) &/or Stock
http://www.investmenthouse.com/ct/gild.html
Play Date: 05/31/2006
MCHP (Microchip--$34.30; +0.95; optionable): Semiconductors
http://biz.yahoo.com/p/m/mchp.html
After Hours: $34.32
STATUS: Test 200 day SMA. Similar to other stocks, MCHP has formed a short double bottom pattern after the sharp sell off to start May. MCHP has held key support at the 200 day SMA (33.32), making two bottoms at that point. Volume was very strong on the Wednesday reversal session last week and then again Wednesday as it jumped off the 200 day. Looks just about ready to make the buy for a run back up.
Volume: 2.347M Avg Volume: 1.675M
BUY POINT: $34.75 Volume=2.5M Target=$41.00 Stop=$33.12
POSITION: QMT JG - Oct. $35c (56 delta) &/or Stock
http://www.investmenthouse.com/ct/mchp.html
Play Date: 05/31/2006
PPDI (Pharmaceutical Product Dev.--$36.33; +1.15; optionable): Medical labs
http://biz.yahoo.com/p/p/ppdi.html
After Hours: $36.39
STATUS: Test 50 day EMA (35.26). Volume surged Wednesday as PPDI started back up off the 50 day EMA (35.26) after the 6 week pullback to test the mid-April gap higher. Strong leader ready for a new high, and the money flow is surging higher ahead of price, leading PPDI to a new all-time high. Want to see it clear the recent closing highs on continued solid trade.
Volume: 1.986M Avg Volume: 641.274K
BUY POINT: $37.12 Volume=950K Target=$44.50 Stop=$35.15
POSITION: PJQ JJ - Oct. $37.50c (52 delta) &/or Stock
http://www.investmenthouse.com/ct/ppdi.html
Play Date: 05/31/2006
VSH (Vishay Intertechnology--$16.25; +0.71; optionable): Semiconductors and passive electronic components
http://biz.yahoo.com/p/v/vsh.html
STATUS: Test 50 day EMA. Big upside volume Wednesday as VSH moved off the 50 day EMA (15.59). Looks to have completed the test of a strong breakout in early May from a 13 week cup with handle base. It tested, going a bit further than you would want, but holding up. Good hold and recovery, and the buyers were coming back in on Wednesday. Looking to move into the play as it continues higher on more solid trade.
Volume: 3.665M Avg Volume: 1.64M
BUY POINT: $16.39 Volume=1.7M Target=$20.00 Stop=$15.45
POSITION: VSH JC - Oct. $15c (69 delta) &/or Stock
http://www.investmenthouse.com/ct/vsh.html
CONTINUING PLAYS
Play Date: 05/24/2006
AXE (Anixter International--$48.73; +0.67; optionable): Electronics
http://biz.yahoo.com/p/a/axe.html
STATUS: Test 50 day EMA. Volume bumped up above average for the first time in a week as AXE made a modest bounce off the 50 day (48.37). Just being patient and letting it show us the move. To recap: Still the nice test, showing a pair of dojis to tend the week just over the 50 day EMA. Didn't bounce with the market, but continues its orderly test to fill the gap from the breakout of its 11 week trading range in late April. Top notch fundamentals growth. Solid 3 to 1 accumulation in the base shows net buying. Solid on all fours and still ready to show us the move.
Volume: 330.3K Avg Volume: 237.083K
BUY POINT: $49.65 Volume=400K Target=$57.00 Stop=$47.78
POSITION: AXE KJ - Nov. $50c (52 delta) &/or Stock
http://www.investmenthouse.com/ct/axe.html
Play Date: 05/20/2006
BMRN (Biomarin Pharmaceuticals--$12.99; +0.15; optionable): Biotechnology
http://biz.yahoo.com/p/b/bmrn.html
After Hours: $13.03
STATUS: Double bottom. Forming a handle to the 10 week base, easing back to the 10 day EMA (12.82) this week. Showed an above average volume spike Wednesday as BMRN showed a doji at that near support. Excellent pattern ready to give us the breakout to a 4.5 year high.
Volume: 1.412M Avg Volume: 1.35M
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: 05/23/2006
LFUS (Littelfuse--$35.03; +0.61; optionable): Circuit protection products for electronics, automotive, electrical markets
http://biz.yahoo.com/p/l/lfus.html
STATUS: Reverse head and shoulders. Big volume surge Wednesday as LFUS tapped the 18 day EMA (34.24) on the low and rebounded for a gain. A pretty pattern that looks ready now to yield a breakout with all of this volume pouring in. To recap: Holding up remarkably well in the selling, going about setting up the current 11 week base over the 50 day EMA (33.25). Strong money flow is leading higher a good complement to the strong 4 to 0 accumulation (4 up price weeks on rising volume to 0 down price weeks on rising volume). Solid action in the weak market, with good price/volume action on a day to day basis in addition to the accumulation.
Volume: 420.492K Avg Volume: 182.275K
BUY POINT: $35.65 Volume=270K Target=$42.00 Stop=$33.55
POSITION: GFQ IG - July $35c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/lfus.html
Play Date: 05/20/2006
PKE (Park Electrochemical--$31.77; +1.14; optionable): Printed circuit boards
http://biz.yahoo.com/p/p/pke.html
STATUS: Test 50 day EMA. Strong volume surge Wednesday as PKE held the 50 day EMA (31.03) and bounced. Ready to continue the move. To recap: Broke out from a 5 month base in January and rallied pretty steadily up the 18 day EMA (31.65). A big early May surge sent it over 36, but it could not hold the move, immediately slipping into a test. The test took it deeper than usual; got caught up in the market selling. Held the 50 day and made its own little double bottom at that support the past week. Like that volume and the strong money flow. Ready to make its next leg higher.
Volume: 237.8K Avg Volume: 107.047K
BUY POINT: $31.97 Volume=145K Target=$39.00 Stop=$29.89
POSITION: PKE IF - Sept. $30c (68 delta) &/or Stock
http://www.investmenthouse.com/ct/pke.html
Play Date: 05/27/2006
UARM (Under Armour--$35.70; +1.19; optionable): Sports garments
http://biz.yahoo.com/p/u/uarm.html
After Hours: $35.54
STATUS: Test 50 day EMA. Some stronger, above average volume Wednesday as UARM tapped the 50 day EMA (34.15) and bounced for a nice gain. Looks ready to make its next move. To recap: A new issue in November 2005, UARM surged to 40 after its IPO. It then fell into its first base, a 3 month cup with handle that broke out in late April with a rocket launch on its earnings report. Big gap, and the move higher that day used up all of the gas in the tank. UAMR spent the next 5 weeks fading to test that move, coming back on low volume (shows no heavy selling) to test the 50 day EMA during all of the market selling. It threatened to break lower but held up in the worst of the selling. Friday UARM showed a doji on a big jump in volume as it priced 7.3M share secondary offering. Looking to start the play as UARM jumps off this doji at the 50 day EMA.
Volume: 1.109M Avg Volume: 601.417K
BUY POINT: $36.12 Volume=1.4M Target=$43.50 Stop=$33.88
POSITION: UWG JG - Oct. $35c (55 delta) &/or Stock
http://www.investmenthouse.com/ct/uarm.html
Play Date: 05/22/2006
VMSI (Ventana Medical Sys.--$47.46; +1.06; optionable): Medical instruments
http://biz.yahoo.com/p/v/vmsi.html
STATUS: Test breakout. No volume yet, but after this week's tap at the 18 day EMA (46.30) it will be ready and the volume will come. To recap: Tremendous breakout in late April, blasting out of an 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. Moved up the past week as the market sold, showing some better volume. 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: 152.785K Avg Volume: 305.794K
BUY POINT: New: $48.05 (orig. $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
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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