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Begin part 3 of 3
THE PLAYS
Good movers: BMRN; FMD; OII; PKE; CELL
Strong plays:
1) CSX: Strong Friday volume and lots of room upside
2) DXPE: Bouncing off the 50 day EMA on solid trade.
3) ZOLT: Another stock off the 50 day EMA on strong volume.
4) LMIA: Still in the nice test, but trying the move Friday.
5) MCHP: Sold back Friday on lower volume, setting up a continued strong move higher
6) VIVO: Nice day off Friday
NEW PLAYS:
Upside plays:
Play Date: 06/02/2006
CSX (CSX Corp.--$68.60; +1.56; optionable): Railroads
http://biz.yahoo.com/p/c/csx.html
STATUS: Test 50 day EMA. Strong run from November through early May, then the selling in May took CSX down with most of the market. Unlike many stocks, CSX held its support at the 50 day EMA (66.09), moving laterally the past two weeks on low, below average volume. Friday CSX gapped higher on strong, above average volume. Looks as if the test is over and CSX has plenty of upside room (last high 74.65). It cane really tear off the real estate in a hurry, making it a solid option play.
Volume: 2.547M Avg Volume: 2.122M
BUY POINT: $68.85 Volume=2.6M Target=$78.95 Stop=$66.00
POSITION: CXS KN - Nov. $70c (53 delta) &/or Stock
http://www.investmenthouse.com/ct/csx.html
Play Date: 06/02/2006
CYBS (Cybersource--$9.72; -0.29; optionable): Electronic payment and risk management software
http://biz.yahoo.com/p/c/cybs.html
After Hours: $9.68
STATUS: Cup w/handle. CYBS has spent the past two weeks moving laterally above the 50 day EMA (9.33) on below average volume, forming the handle to its 9 week base. This base formed to consolidate the late March breakout from a larger, 21 month ascending triangle. Strong 3 to 1 accumulation shows plenty of buying still as CYBS consolidates that prior move. Good move Thursday but volume, though up, was still below average. Looking for a strong breakout this week.
Volume: 157.548K Avg Volume: 381.52K
BUY POINT: $10.05 Volume=572K Target=$12.00 Stop=$9.38
POSITION: CXQ JB - Oct. $10c (53 delta) &/or Stock
http://www.investmenthouse.com/ct/cybs.html
Play Date: 06/02/2006
DXPE (DXP Enterprises--$45.19; +2.69; no options): MRO products for industrial customers
http://biz.yahoo.com/p/d/dxpe.html
After Hours: $46.67
STATUS: Test 50 day EMA. DXPE made us some strong gain on its May run as it broke out form a 5 week lateral base that tested the early March breakout from a larger 6 month pattern. It surged to 59.24 and then used the market selling to test the move, coming back to form a floor at 45 before gapping lower to the 50 day EMA (41.82) Thursday. It rebounded Friday on good, above average volume, tapping the 10 day EMA (45.95) on the high. Good shakeout Thursday; looks like it is ready to make its next move upside. Want to see it clear 18 day EMA (46.43) on solid trade. It was up after hours, doing just that.
Volume: 631.423K Avg Volume: 504.085K
BUY POINT: $46.65 Volume=756K Target=$55.98 Stop=$44.88
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/dxpe.html
Play Date: 06/03/2006
WIRE (Encore Wire--$38.10; +0.30; optionable): Copper electrical building wire and cable
http://biz.yahoo.com/p/w/wire.html
After Hours: $38.40
STATUS: Test 50 day EMA. Huge run from October 2005 through early May 2006, then the May selling. WIRE fell hard at first, but when it hit the 50 day EMA (38.13) the selling ebbed. It fell through that level two weeks back but rebounded and moved laterally at that support the past week on lower, below average volume as the trading range narrowed. We are seeing other stocks in this sector starting higher once again. WIRE showed a doji Friday on low volume at the 50 day. It looks ready to move up as well. Plenty of room to the upside to make us nice coin.
Volume: 418.513K Avg Volume: 900.963K
BUY POINT: $39.25 Volume=1.4M Target=$47.25 Stop=$37.38
POSITION: EJO KH - Nov. $40c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/wire.html
Play Date: 06/02/2006
ZOLT (Zoltek Companies--$31.96; +2.95; optionable): Industrial electrical equipment
http://biz.yahoo.com/p/z/zolt.html
After Hours: $31.98
STATUS: Test 50 day EMA. ZOLT started up sharply off of the 50 day EMA (26.81) sharply Friday, rallying on strong above average volume, the best trade in over a week. This stock can peel off big jumps in real estate in a hurry, and we are looking to capture this next move. It filled the gap higher from mid-May, tested key support, and is now moving higher.
Volume: 983.484K Avg Volume: 697.834K
BUY POINT: $31.22 Volume=850K Target=$39.00 Stop=$29.57
POSITION: LVQ IF - Sept. $30c (66 delta) &/or Stock
http://www.investmenthouse.com/ct/zolt.html
Downside Plays:
Play Date: 06/02/2006
ALTR (Altera--$19.06; -0.41; optionable): Semiconductors
http://biz.yahoo.com/p/a/altr.html
After Hours: $19.06
STATUS: Test 200 day SMA. ALTR was hardly immune from the May selling, breaking through the 200 day SMA (19.48) mid-month after a modest attempt at holding that support. It fell to 18 and then spent the past 2 weeks rebounding to try and recover that level. Strong volume attempt Wednesday took it right up to that point. Then it rolled over and Friday it was selling again. Unlike the indices and many stocks, ALTR did not form a double bottom. This rollover may be where it tries or it may simply keep on going lower. Either way, a move to the target lands us a 45%ish gain.
Volume: 6.241M Avg Volume: 5.511M
BUY POINT: $18.94 Volume=6M Target=$17.65 Stop=$17.65
POSITION: LTQ DS - July $20p (-62 delta)
http://www.investmenthouse.com/ct/altr.html
CONTINUING PLAYS
Play Date: 05/31/2006
GILD (Gilead Sciences--$58.40; -0.26; optionable): Biotechnology
http://biz.yahoo.com/p/g/gild.html
After Hours: $58.31
STATUS: Double bottom w/handle. Gapped higher Friday but could not push through the 50 day SMA (59.14), ending the session slightly lower. May form a handle here to its base after gapping higher past the 'hump' on Thursday. To recap: 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 (54.30), 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. It cleared the 'hump' at 57.50 Thursday. Looking for this test to hold the 50 day EMA (58.08) and rebound to give us the buy. Strong market leading stock that needed a breather and took it and now is ready to move back up.
Volume: 4.58M Avg Volume: 4.892M
BUY POINT: New: 58.75 (orig. $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: 05/27/2006
LMIA (LMI Aerospace--$19.90; -0.22; no options): Aerospace/defense
http://biz.yahoo.com/p/l/lmia.html
After Hours: $20.10
STATUS: Breakout test. LMIA tried the resume the breakout move Friday, but volume remained below average and it faded to close flat, holding the 18 day EMA (19.79) on the close. This continues the low volume test of the early May breakout from a 16 week ascending base. Strong money flow is leading higher as LMIA tests the 50 day EMA (18.58), setting up to resume the run higher to a new all-time high.
Volume: 118.376K Avg Volume: 205.748K
BUY POINT: $20.75 Volume=265K Target=$24.95 Stop=$19.65
POSITION: - Stock (No option chain)
http://www.investmenthouse.com/ct/lmia.html
Play Date: 05/31/2006
MCHP (Microchip--$34.83; -0.54; optionable): Semiconductors
http://biz.yahoo.com/p/m/mchp.html
After Hours: $34.97
STATUS: Test 200 day SMA. Great push higher Thursday that left MCHP right at the 50 day EMA (35.37). It was unable to push through Friday and fell, tapping at the 10 day EMA (34.44) on the low and rebounding to hold the 18 day EMA on the close. Lower volume so no dumping; just a good test of the Wednesday and Thursday strong volume move higher. Looking for MCHP to maybe spend a day or two working laterally and then breaking higher once more. An aggressive play is from here, and after that a move through the 50 day EMA. To recap: 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 (33.36), making two bottoms at that point. Volume was very strong on the Wednesday reversal session two weeks back 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: 1.553M Avg Volume: 1.686M
BUY POINT: New: $34.98 (orig. $34.75); Next: 35.45. 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.--$37.31; +0.02; optionable): Medical labs
http://biz.yahoo.com/p/p/ppdi.html
STATUS: Test 50 day EMA (35.41). Thursday volume was disappointing as PPDI continued its upside move, and Friday it tried to move further but in the weaker market it lost its momentum. May get a test back early this week, but we want to be ready in the event PPDI continues from here given its strong pattern. To recap: Volume surged Wednesday as PPDI started back up off the 50 day EMA 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: 467.889K Avg Volume: 640.846K
BUY POINT: New: $37.88 (orig. $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: 05/22/2006
VMSI (Ventana Medical Sys.--$47.47; -1.37; optionable): Medical instruments
http://biz.yahoo.com/p/v/vmsi.html
STATUS: Test breakout. The strong Thursday move could not hold up Friday as VMSI gapped lower and tested the 18 day EMA on rising, above average volume. It held that level and bounced, but still suffered a down session. Still set up to move higher and continues its breakout run. 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: 354.109K Avg Volume: 301.84K
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
Play Date: 06/01/2006
VVUS (Vivus--$4.60; -0.09; no options): Medical instruments
http://biz.yahoo.com/p/v/vvus.html
STATUS: Test breakout. Took Friday off, easing back on the low to test the 10 day EMA (4.46) and then bouncing to post a modest loss on low volume. Good test of the strong Thursday move, and looking for it to continue that upside strength this week. To recap: VVUS blasted higher in mid-May, surging out of a 9.5 month base that formed after the May 2005 low. Strong jump off the 18 day EMA (4.32) Thursday after the three week test of the strong break higher. Used the 18 day as near support and now ready to move higher and continues its recovery.
Volume: 218.807K Avg Volume: 451.66K
BUY POINT: $4.85 Volume=677K Target=$5.97 Stop=$4.51
POSITION: - Stock
http://www.investmenthouse.com/ct/vvus.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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