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us stock market, trade stock
Begin part 3 of 3
THE PLAYS
Good movers: FMD; ALTR; PGNX
Strong plays:
1) AYE: Strong showing to end the week.
2) EGOV: This test looks to be over.
3) BWNG: Breaking lower to fill the gaps.
4) WFT: Running out of gas at the 50 day EMA.
5) BIDU: Nice test looks over.
6) MXWL: Another test looks to be over.
7) OXY: Doji below the 50 day EMA.
NEW PLAYS: Looking at a mix of upside and downside, but any of these, regardless of where the overall market goes, can make us money.
Upside plays:
Play Date: 06/10/2006
AYE (Allegheny Energy--$36.90; +0.49; optionable): Electric utilities
http://biz.yahoo.com/p/a/aye.html
STATUS: Ascending base. Showing some excellent action to end the week, trying to make the breakout from its 20 week base that has bounced up the 50 day EMA (35.44) along the way. Big move Friday up to 37.90 but it could not hold $1 of the move. Solid 4 to 2 accumulation (4 up price weeks on rising volume to 2 down price weeks on rising volume) shows buying during the base, and the price/volume action last week indicates it is ready to make its next move toward a 4 year high. Strong money flow is leading. This is one of the top stocks in its sector, and this sector is starting to perform well in the weaker overall market.
Volume: 1.388M Avg Volume: 780.377K
BUY POINT: $37.21 Volume=1.4M Target=$44.65 Stop=$35.92
POSITION: AYE JG - Oct. $35c (71 delta) &/or Stock
http://www.investmenthouse.com/ct/aye.html
Play Date: 06/10/2006
EGOV (Nic, Inc.--$6.78; -0.13; no options): eGovernment services enabling governments to use the internet to provide services to businesses and US citizens.
http://biz.yahoo.com/p/e/egov.html
STATUS: Test breakout. EGOV blasted higher to start June, breaking out of an 8 month flat base on a very large volume surge. It reached 7.24 on the breakout move and then spent the past week testing the move, coming back on much lower trade. That shows fewer sellers as the stock tests back as the short term profit takers sell out. A bit wild Thursday, moving to the 18 day EMA (6.61) on the low, but rebounded well. Friday it faded but held the 10 day EMA (6.75). Excellent 9 to 4 accumulation in the base shows plenty of buying as EGOV ignored the market selling, set up its base, and broke out. Money flow continues to run higher. Relative strength is ready for a breakout along with the stock after this test.
Volume: 98.746K Avg Volume: 184.298K
BUY POINT: $7.06 Volume=275K Target=$8.50 Stop=$6.60
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/egov.html
Play Date: 06/10/2006
XPRSA (U.S. Xpress--$23.54; +0.40; optionable): Trucking
http://biz.yahoo.com/p/x/xprsa.html
STATUS: Test breakout. Very nice 5 week lateral move testing the early May break higher out of an 18 week ascending base. XPRSA has worked higher along the 18 day EMA (22.55), using the 50 day EMA (21.24) as support on the occasional dip lower. Volume started higher the past three sessions and Friday XPRSA tried the breakout. Looks ready to make its move. Money moving into these stocks as the market weakened.
Volume: 206.174K Avg Volume: 164.171K
BUY POINT: $23.91 Volume=250K Target=$28.75 Stop=$22.45
POSITION: SUA JX - Oct. $22.50c (59 delta) &/or Stock
http://www.investmenthouse.com/ct/xprsa.html
Downside Plays:
Play Date: 06/10/2006
BWNG (Broadwing--$11.13; -0.79; optionable): Telecom equipment
http://biz.yahoo.com/p/b/bwng.html
After Hours: $11.15
STATUS: Head and shoulders. Part of the telecom equipment rally to start the year, BWNG topped in early April and sold off early that month on high volume for one session. That broke its back. It has wandered lower since, completing a 12 week head and shoulders pattern Friday as it undercut the May lows on the strongest volume in a month. It is working on filling the gaps higher in March. Spiking volume and a breach of support are begging for a fill. A move to the initial target gains us 51%. If it continues down we will let it run to the 200 day SMA (8.92) if it will. We are buying out of the money options, not our usual play, but we like the pattern and the need to fill those gaps higher. It gives us a much better return to the target than the $12.50 strike puts.
Volume: 4.738M Avg Volume: 2.695M
BUY POINT: $10.97 Volume=2.8M Target=$9.75 Stop=$11.36
POSITION: QBG SB - July $10p (-28 delta)
http://www.investmenthouse.com/ct/bwng.html
Play Date: 06/10/2006
CVTX (CV Therapeutics--$14.93; -0.32; optionable): Biotechnology
http://biz.yahoo.com/p/c/cvtx.html
STATUS: Put. CVTX is in a continuing downtrend that began in early March after a 6 month basing attempt failed. It rode down the 10 day EMA (now at 15.51), came up for air at the 50 day EMA (now 18) in late April, and then resumed the dive. The past three weeks it rebounded up to try another test, but stalled out just over the 18 day EMA, unable to reach to the 50 day. It gapped lower to start the month and has resided just below the 10 day EMA since. Looks ready to give us another run lower, following its weak money flow. A move to the target lands us a 43% gain.
Volume: 1.254M Avg Volume: 1.561M
BUY POINT: $14.72 Volume=1.6M Target=$13.45 Stop=$15.05
POSITION: UXC SC - July $15p (-48 delta)
http://www.investmenthouse.com/ct/cvtx.html
Play Date: 06/10/2006
WFT (Weatherford International--$49.32; -0.14; optionable): Oil and gas service company
http://biz.yahoo.com/p/w/wft.html
STATUS: Put. WFT has of course been strong for a long time and partook in the April and early May scream higher with the energy and oil stocks. It peaked on no volume the second week of May, fell to the 50 day EMA (50.56), tried to hold and bounce into early June, but that attempt failed Wednesday. It tanked Thursday, recovered, and tapped the 50 day Friday. It then started to fade once more. Looking for WFT to have a tough time weathering the next drop, but that is to our advantage. A move to the target lands us a 45%ish gain.
Volume: 3.545M Avg Volume: 3.696M
BUY POINT: $48.95 Volume=3.8M Target=$45.75 Stop=$50.66
POSITION: WFT SJ - July $50p (-50 delta)
http://www.investmenthouse.com/ct/wft.html
CONTINUING PLAYS
Play Date: 06/08/2006
BIDU (Baidu.com--$86.60; +0.33; optionable): Chinese internet
http://biz.yahoo.com/p/b/bidu.html
After Hours: $86.30
STATUS: Test 10 day EMA. Coming back to test the 10 day EMA (84.42) on the low Friday as expected. Looks as if that might be the end of the test. Moved up the buy point to let it clear this resistance. To recap: Thursday BIDU sold off but then rebounded and held over the top of the four week lateral move it formed after the early May gap higher. Strong money flow remains out in front. Going to get back on the horse if it shows us the upside move.
Volume: 2.928M Avg Volume: 2.011M
BUY POINT: $87.12 Volume=2.8M Target=$100.00 Stop=$81.55
POSITION: BDQ IQ - Sept. $85c (60 delta) &/or Stock
http://www.investmenthouse.com/ct/bidu.html
Play Date: 06/02/2006
CYBS (Cybersource--$9.55; 0.00; optionable): Electronic payment and risk management software
http://biz.yahoo.com/p/c/cybs.html
STATUS: Cup w/handle. Still working on the lateral handle to its 10 week base, hugging the 50 day EMA (9.35) as it moves on low volume in a tight range. Just being patient to see if CYBS can deliver the breakout move.
Volume: 182.468K Avg Volume: 377.851K
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: 06/07/2006
KNOL (Knology, Inc.--$10.01; +0.14; no options): Wireless telecom
http://biz.yahoo.com/p/k/knol.html
STATUS: Cup w/handle. Good volume Friday as KNOL continued to pressure the breakout. Showing no ill effects from the overall market action. To recap: After a strong run from March through mid-May KNOL needed a rest as it approached its all-time high hit back in early 2004 when KNOL was a new issue. Short but nice 5 week base over the 50 day EMA (8.19) sporting 3 to 1 accumulation (3 up price weeks on rising volume to 1 down price weeks on rising volume) shows buying even as KNOL took a breather. Good shakeouts the past week as KNOL tested down to the 18 day EMA (9.26) intraday and rebounded. This action is setting up its next breakout.
Volume: 304.102K Avg Volume: 217.822K
BUY POINT: $10.41 Volume=323K Target=$12.50 Stop=$9.68
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/knol.html
Play Date: 06/06/2006
MXWL (Maxwell Technologies--$20.00; +0.27; optionable): Energy storage and power delivery components
http://biz.yahoo.com/p/m/mxwl.html
STATUS: Breakout test. Reached lower below the 50 day EMA (19.18) Thursday but recovered. Friday a niche doji on average trade at the 18 day EMA (19.85). Very nice test and ready to resume the move. To recap: Huge surge a week back on strong volume as MXWL broke out from a 16 week range between 17 and 20, mostly using the 50 day EMA as support. Outstanding 7 to 2 accumulation in the base shows lots of buying setting up the breakout and run higher. Strong move then a test last week. Strong money flow is a good complement to the buying.
Volume: 160.469K Avg Volume: 152.309K
BUY POINT: $20.78 Volume=223K Target=$24.95 Stop=$19.65
POSITION: QMW LD - Dec. $20c (59 delta) &/or Stock
http://www.investmenthouse.com/ct/mxwl.html
Downside:
Play Date: 06/07/2006
OXY (Occidental Petroleum--$96.93; -0.05; optionable): Oil and gas integrated
http://biz.yahoo.com/p/o/oxy.html
STATUS: Put. Gapped lower but rebounded Thursday, then showing a tight doji below the 50 day EMA (97.75) Friday. This is setting it up for the move back down to test toward the May lows at 90. To recap: Energy was down sharply last Wednesday and OXY fell as well on strong, above average volume. It peaked with a low volume double top spanning April and May. It tanked and then spent the end of May trying to recover. Looks to have failed that move. A move to the target lands us a 40%ish gain.
Volume: 4.404M Avg Volume: 3.793M
BUY POINT: $94.44 Volume=3.8M Target=$90.00 Stop=$95.65
POSITION: OXY SS - July $95p (-46 delta)
http://www.investmenthouse.com/ct/oxy.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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