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Begin part 3 of 3
THE PLAYS
Good movers: BRLI; FMD; MRY; SMSI; UARM; BWNG; CVTX; PGNX
Strong plays:
1) TEN: Nice volume and rallying to end the week.
2) KNOT: Setting up for the next move.
3) ALTR: Ready to move downside again.
4) CSX: Doji below the 50 day EMA.
5) SMH: Stalling at the 18 day EMA again.
6) SMDI: Finally looks ready
7) BWNG: Turning back down
NEW PLAYS:
Upside plays:
Play Date: 06/17/2006
HMSY (HMS Holdings--$10.41; +0.28; no options): Healthcare information software
http://biz.yahoo.com/p/h/hmsy.html
STATUS: Test 18 day EMA. HMSY broke out from a 13 month base in March and has made a couple of runs higher off of that breakout. It surged in late May as much of the market sold as it and more defensive healthcare sector stocks received some rotated money. HMSY stalled out near 10.70 and started the current three week lateral move, using the 10 day EMA (9.89) on the lows as support and the 10 day EMA (10.09) as closing support. Nice action given the market was in a nose dive during this test of the last run higher. Looks as if this lateral move is winding up its business as the intraday range narrowed and Friday HMSY bounced higher as the market sold. Needs to show more volume as it makes its break higher toward a new 8 year high. Money flow is strong and leading higher while relative strength is ready for the breakout. Looks ready to continue the breakout run.
Volume: 78.759K Avg Volume: 126.286K
BUY POINT: $10.78 Volume=190K Target=$12.95 Stop=$10.03
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/hmsy.html
Play Date: 06/17/2006
KNOT (The Knot--$18.30; +0.12; no options): Wedding services via the internet
http://biz.yahoo.com/p/k/knot.html
STATUS: Cup w/handle. You never know what is going to work in the marketplace and the market, but KNOT is one of those unlikely winners. It has formed an 11 week base with a rather jagged cup, but after surging up the right side of the pattern in June is has come back to form a nice handle at the 50 day EMA (17.44) the past two weeks. Solid action as the market sold, using the weakness to shake out the sellers and put the finishing touches on its new base, the third in this run. That means it is not overextended on this move. Positive accumulation and surging money flow; leading the way for KNOT's next breakout.
Volume: 124.91K Avg Volume: 139.74K
BUY POINT: $18.67 Volume=210K Target=$22.50 Stop=$17.36
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ctknot.html
Play Date: 06/17/2006
TEN (Tenneco Automotive--$25.00; +0.95; optionable): Original equipment auto parts (emission control and ride control products)
http://biz.yahoo.com/p/t/ten.html
STATUS: Flat trading range. TEN rallied well in April, hitting just over 27 on the high. That was the peak of that break higher as it gapped lower to end April and then started the current 8 week lateral move along the 50 day EMA (23.93). Low volume as it worked through the base and then volume started edging higher early last week during a shakeout, and then surged Thursday and Friday as TEN jumped back above the 50 day EMA with the look that it wants to break out from its trading range. Solid 3 to 1 accumulation (3 up price weeks on rising volume to 1 down price weeks on rising volume) shows plenty of buying as TEN sets up for the next move higher. It has the volume. Seems incongruous that an auto parts maker would be rallying, but TEN is setting up to do so just as it has done frequently.
Volume: 1.086M Avg Volume: 483.14K
BUY POINT: $25.21 Volume=490K Target=$30.00 Stop=$23.85
POSITION: TEN JE - Oct. $25c (50 delta) &/or Stock
http://www.investmenthouse.com/ct/ten.html
Downside:
Play Date: 06/17/2006
ALTR (Altera--$17.68; -0.27; optionable): Semiconductors
http://biz.yahoo.com/p/a/altr.html
After Hours: $17.51
STATUS: Put. ALTR made us some solid scratch on the last leg lower and after the late week bounce it is setting up to turn lower once more. It tried to get back through the 10 day EMA (17.96) Thursday and Friday, but both sessions it faded. Similar to the indices, ALTR has made two runs lower since the May peak, and this little low volume rebound is setting up the next leg lower. Looking to enter on further weakness even though it is just at the 10 day EMA; a downtrend using the 10 day as resistance is a strong downtrend. A move to the target lands us a 45%ish gain.
Volume: 3.875M Avg Volume: 5.42M
BUY POINT: $17.57 Volume=5.5M Target=$16.00 Stop=$18.00
POSITION: LTQ UP - Sept. $17.50p (-40 delta)
http://www.investmenthouse.com/ct/altr.html
Play Date: 06/17/2006
CSX (CSX Corp.--$64.35; -0.44; optionable): Railroads
http://biz.yahoo.com/p/c/csx.html
STATUS: Head and shoulders. CXS broke down from a seven week topping pattern after a strong run from November 2005 to early May. It was one of the stocks that exploded higher in May after an already strong run; blow off top. It tumbled to the 50 day EMA (65.13), tried to hold, then broke below that level to start June. It bottomed at 60 and bounced last week, tapping the 50 day on the Friday high and backing off some. This takes it back up just below the right shoulder lows, a natural resistance point on top of the 50 day EMA. Looking for it to roll over here and follow the money stream lower. A move down to the target lands us a 50%ish gain. If it falls on through the target with authorit, we will let it continue down.
Volume: 2.003M Avg Volume: 2.268M
BUY POINT: $63.69 Volume=2.3M Target=$59.65 Stop=$65.31
POSITION: CSX TM - Aug. $65p (-51 delta)
http://www.investmenthouse.com/ctcsx.html
Play Date: 06/17/2006
DVA (Davita--$48.89; -0.19; optionable): Health services
http://biz.yahoo.com/p/d/dva.html
STATUS: Put. There is always one in a sector; DVA is in the right sector for this market, but it is not acting that way. Formed a top February to March and rolled over, using the 10 and 18 day EMA as resistance as it slides lower. It fell through the 200 day SMA (52.89) in May and failed a test of that level in early June, precipitating another plunge. Last week it steadily worked its way back up, but it could only make it to the 10 day EMA (49.22) where it showed a doji Friday. Looking for DVA to stall out at this level and give us another run lower. A move to the target lands us a 42%ish gain.
Volume: 542.6K Avg Volume: 850.091K
BUY POINT: $48.69 Volume=850K Target=$46.44 Stop=$49.25
POSITION: DVA TJ - Oct. $50p (-52 delta)
http://www.investmenthouse.com/ct/dva.html
Play Date: 06/17/2006
SMH (Semiconductor Holders Trust--$33.03; -0.27; optionable): Semiconductor ETF
http://biz.yahoo.com/p/s/smh.html
After Hours: $33.00
STATUS: Put. The chips have led each move lower in this sell off, starting the second leg in early June with a failed test of the 18 day EMA (33.45). SMH ended the week with a Thursday and Friday test of the 18 day on lower, below average volume, showing a tombstone doji Friday. As the name suggests, that is not a real bullish indication after a bounce higher. As it occurred just below the 18 day EMA, the resistance in this downtrend, it looks ripe to turn lower and continue the decline. A move to our initial target lands us a 48%ish gain. If it keeps falling from there, we will let it.
Volume: 10.605M Avg Volume: 18.289M
BUY POINT: $32.88 Volume=20M Target=$31.35 Stop=$33.48
POSITION: SMH TZ - Aug. $32.50p (-39 delta)
http://www.investmenthouse.com/ctsmh.html
CONTINUING PLAYS
Play Date: 06/14/2006
ACTS (Actions Semiconductor--$10.90; -0.10; no options): Chinese system-on-a-chip products
http://biz.yahoo.com/p/a/acts.html
STATUS: Test 50 day EMA. Holding the 50 day EMA (10.65) through the end of the week, continuing its test and setting up for the next upside move. Held up very well in the market selling, using it to shakeout the weak holders and set up the next move. To recap: A new issue in November 2005, ACTS moved laterally through mid-March. It broke sharply higher and rallied through late May, reaching 12 on the high. It spent the past four weeks testing the 50 day EMA, showing a big doji at that level Wednesday, reaching below that support and rebounding. Strong money flow. Looking for a volume move off of this support; volume has been low and below average for a month. About time.
Volume: 116.755K Avg Volume: 276.297K
BUY POINT: $11.11 Volume=416K Target=$13.35 Stop=$10.55
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/acts.html
Play Date: 06/08/2006
BIDU (Baidu.com--$82.70; +0.22; optionable): Chinese internet
http://biz.yahoo.com/p/b/bidu.html
STATUS: Test 10 day EMA. Moved higher to end the week, but no volume. Managed to hold the 18 day EMA (81.55) on the Friday low and eke out a gain. Needs to show more strength on the bounce to get us into positions. To recap: BIDU has pulled back but has held over the top of the five week lateral range 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: 1.86M Avg Volume: 2.65M
BUY POINT: $83.55 Volume=2.8M Target=$96.00 Stop=$79.38
POSITION: BDQ IQ - Sept. $85c (51 delta) &/or Stock
http://www.investmenthouse.com/ct/bidu.html
Play Date: 05/24/2006
SMDI (Sirenza Microdevices--$11.50; -0.34; no options): Semiconductor integrated circuits
http://biz.yahoo.com/p/s/smdi.html
STATUS: Test breakout. SMDI may finally be ready. Strong volume Thursday as it jumped back through the 50 day EMA (10.84) after a shakeout below that level early in the week. That looks to have put the finishing touches on its 6 week pullback to test the strong early May break higher. Want to see that strong volume as it moves through the buy point. Seems incongruous it would be ready to rally when the chips look ready to fall, but it has shown contrary strength all during its move.
Volume: 308.394K Avg Volume: 501.375K
BUY POINT: $12.12 Volume=677K Target=$15.12 Stop=$11.27
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/smdi.html
Play Date: 06/12/2006
SVNT (Savient Pharma--$5.59; -0.20; optionable): Biotechnology
http://biz.yahoo.com/p/s/svnt.html
STATUS: Reverse head and shoulders. Volume surged Friday as SVNT fell to the 18 day EMA (5.62), but there it held. Looks as if this might be the shakeout that sets up the breakout move from this nice little base. To recap: SVNT has set up another nice little base, using the 50 day EMA (5.49) as support. Positive accumulation and solid money flow. Nice second base after coming off of its low hit in 2004 with relative strength breaking out ahead of price, a good indication the stock price is going to follow. Holding up extremely well in the market selling.
Volume: 837.245K Avg Volume: 371.583K
BUY POINT: $5.98 Volume=544K Target=$7.22 Stop=$5.56
POSITION: UVP LA - Dec. $5c (59 delta) &/or Stock
http://www.investmenthouse.com/ct/svnt.html
Downside:
Play Date: 06/12/2006
BBY (Best Buy--$52.45; +0.95; optionable): Electronics stores
http://biz.yahoo.com/p/b/bby.html
After Hours: $52.73
STATUS: Put. BBY moved higher off of the dojis below the 18 day EMA (51.73), tapping at the 50 day EMA (53.06) on the Friday high. Volume was lower but above average. Still has the look it is not going to make this move stick. Looking for a break lower on volume to take some aggressive positions. To recap: BBY broke below the 200 day SMA (49.74) Monday on stronger, above average volume after testing that level last Thursday and recovering. It is in a continuing downtrend below the 18 day EMA after forming a broad top in April and early May and then rolling over hard the second week of May. It has bounced twice off the 200 day, but cannot clear the 18 day EMA. Looking for volume to remain strong as BBY continues back down from this near resistance. A move to the target lands us a 45% gain.
Volume: 5.206M Avg Volume: 3.837M
BUY POINT: $51.92 Volume=4M Target=$48.68 Stop=$53.11
POSITION: BBY SX - July $52.50p (-49 delta)
http://www.investmenthouse.com/ct/bby.html
Current positions ready to move lower and another buy:
Play Date: 06/10/2006
BWNG (Broadwing--$10.22; -0.58; optionable): Telecom communication equipment
http://biz.yahoo.com/p/b/bwng.html
After Hours: $10.20
STATUS: Put. Hard drop early in the week, low volume rebound to Thursday, and then another turn lower Friday. The upside stalled at the 10 day EMA (10.85), a sign of a strong downtrend. Looks ready to continue the downtrend from here.
Volume: 1.975M Avg Volume: 2.649M
BUY POINT: New: $10.11 (orig. $10.52) Volume=2.8M Target=$9.65 is original but looks as if it will head to the 200 day SMA at 9.07. Stop=$9.82
POSITION: QBG SB - July $10p (-28 delta)
http://www.investmenthouse.com/ct/bwng.html
Play Date: 06/12/2006
X (US Steel--$62.94; -1.06; optionable): Steel
http://biz.yahoo.com/p/x/x.html
STATUS: Put. X bounced sharply Thursday on volume, fading back from the 50 day EMA (64.04) on Friday. This is where it needs to fail and continued lower. Money flow remains in the tank and looking for X to turn back over, break down through the 10 day EMA (61.89), and head back down toward the 200 day SMA (52.73).
Volume: 4.805M Avg Volume: 4.852M
BUY POINT: New: $63.95 Volume=5M Target=$54.05 Stop=$57.68
POSITION: X TL - Aug. $65p (-55 delta)
http://www.investmenthouse.com/ct/x.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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