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trade stock, stock recommendation
Beign part 3 of 3
THE PLAYS
Good movers: CELG; ININ; LTD; VCLK
Thursday night play results:
NTES: Held the 10 day EMA once more on very low trade, setting up the handle.
MCHP: Nice volume again as MCHP bucked the chip lethargy
PRXL: Faded to the 18 day EMA on lower trade. More volatile than we would like
EEFT: Still fading back on the low volume test.
New Plays:
Upside:
Play Date: 07/08/2006
ABAX (Abaxis--$21.55; -0.10; optionable): Portable blood analysis systems for vets and humans
http://biz.yahoo.com/p/a/abax.html
Earnings: Late July
STATUS: Cup w/handle. ABAX is working on its handle, fading back last week to test and hold the 10 day EMA (21.28) on below average volume. This action is forming the handle to a 9 week base that is setting ABAX up for a breakout to a new all-time high. A solid stock with positive accumulation to go along with its solid technical pattern. Nice test on low trade and now we look for a strong break higher on strong trade to give us the entry point as ABAX continues its move higher.
Volume: 351.492K Avg Volume: 505.864K
BUY POINT: $22.76 Volume=759K Target=$27.00 Stop=$21.17
POSITION: QOX KX - Nov. $22.50c (53 delta) &/or Stock
http://www.investmenthouse.com/cd/abax.html
Play Date: 07/08/2006
ALJ (Alon USA Energy--$33.63; +1.41; optionable): Oil and gas refining
http://biz.yahoo.com/p/a/alj.html
After Hours: $33.60
Earnings: Second week August
STATUS: Double bottom w/handle. Strong volume surge Friday as ALJ tested the breakout waters from its 9 week base formed using the 50 day EMA (29.64) as the lows for the two legs. Strong 4 to 1 accumulation (4 up price weeks on rising volume to 1 down price weeks on rising volume) shows a lot of buying during the base as investors accumulate the shares. A new issue in July 2005, this is ALJ's second base, and that gives it plenty of room upside and we don't have to worry so much about a break higher just to fold and fall back on us. Relative strength ready for the breakout with the stock price, a good corroboration of the stock's strength.
Volume: 594.8K Avg Volume: 311.987K
BUY POINT: $34.05 Volume=400K Target=$40.00 Stop=$31.95
POSITION: ALJ IF - Sept. $30c (64 delta) or ALJ LG - Dec. $35c (51 delta) &/or Stock
http://www.investmenthouse.com/cd/alj.html
Play Date: 07/08/2006
IWS (Russell Mid-Cap Value ETF--$131.53; -0.63; optionable)
http://biz.yahoo.com/p/i/iws.html
STATUS: Double bottom w/handle. IWS spent last week coming back to test the 50 day EMA (131.16) on the Friday low, forming the handle to an 8 week base that formed to consolidate October 2005 to May 2006 run. Nice test for the value mid-caps last week, setting up for the break higher as those energy, metals, and materials stocks move back up. A move to the target lands us a 53%ish gain. Using options on this EFT play.
Volume: 251.3K Avg Volume: 139.549K
BUY POINT: $131.89 Volume=209K Target=$134.95 Stop=$131.11
POSITION: IWS HF - Aug. $130c (80 delta)
http://www.investmenthouse.com/cd/iws.html
Play Date: 07/08/2006
LEAP (Leap Wireless International--$45.40; -0.95; optionable): Wireless telecom
http://biz.yahoo.com/p/l/leap.html
Earnings: Second week of August
STATUS: Double bottom w/handle. Ragged pattern, but setting up well. LEAP surged to end June, moving higher on strong volume. It neared the May high and faded back this past week on mostly lower trade, ending the week at the 10 day EMA on the close. Solid 4 to 2 accumulation in the pattern shows net buying as it readies for the new high. Relative strength broke out on the late June move as LEAP showed its strength. Looking for LEAP to turn and leap off of this test of near support to show us the buyers are back in.
Volume: 644.476K Avg Volume: 377.861K
BUY POINT: $46.38 Volume=567K Target=$54.00 Stop=$44.55
POSITION: UAO JI - Oct. $45c (60 delta) &/or Stock
http://www.investmenthouse.com/cd/leap.html
Play Date: 07/08/2006
ZUMZ (Zumiez--$35.28; -1.25; optionable): Apparel stores
http://biz.yahoo.com/p/z/zumz.html
Earnings: Mid-August
STATUS: Test breakout. ZUMZ zoomed higher to end June, moving on strong volume to 38 as it broke out from an 8 week base that consolidated a strong 6 month run. This is ZUMZ's second base since coming public in May 2005. This is a key point for retail: it is still in its growth stage, opening stores and expanding. Want to pick it up off of this test of the 10 day EMA and the breakout.
Volume: 460.555K Avg Volume: 376.69K
BUY POINT: $35.94 Volume=500K Target=$43.00 Stop=$34.65
POSITION: QUY KG - Nov. $35c (59 delta) &/or Stock
http://www.investmenthouse.com/cd/zumz.html
Continuing play ready to move:
Play Date: 06/30/2006
IDEV (Indevus Pharmaceuticals--$5.65; +0.09; optionable): Biotechnology
http://biz.yahoo.com/p/i/idev.html
After Hours: $5.75
Earnings: First week August
STATUS: Reverse head and shoulders. IDEV gapped higher Friday on stronger, above average volume, but it could not do much with it. It did test the break higher intraday, so it is locked and loaded to move higher from here. If it makes the move we are going to be in there with it.
Volume: 1.296M Avg Volume: 552.079K
BUY POINT: New: $5.72 (orig. $5.62) Volume=550K Target=$6.95 Stop=$5.23
POSITION: QUF LA - Dec. $5c (65 delta) &/or Stock
http://www.investmenthouse.com/cd/idev.html
SUBSCRIBER PORTFOLIO: These are stocks subscribers suggest by vote that we put in a portfolio to track and move into the stocks if they perform well. If you have any suggestions for additions or deletions, email us. We don't cover them all each report, just when something interesting is developing.
AAPL, AKAM, CCJ, CELG, FLR, GME, MGPI, MRVL, NVDA, SGMS, WM
AKAM: Nice doji at the 10 day EMA. Great relative strength and action in a weak market.
CCJ: Nice test last week, holding over the 50 day SMA in a tight range on low volume.
CELG: Still finding strength, moving higher again Friday.
FLR: Testing further. Should hold near 90 at the 50 day EMA.
GME: Breaking lower again.
MRVL: Looks sold out on this leg lower.
NVDA: It did not make the bounce, falling close to the late June low. Still looking weak after showing a fraction of promise.
WM: Another day closer to setting up a breakout.
SUBSCRIBERS' WATCHLIST
CX: Mexico's cement company. Tumbled hard in May and early June after the last gasp run for materials, metals, etc. It needed a correction, and it has had one. It moved up well to end June and is now working laterally the first week of July, holding above the 50 day EMA (58.70) as it rests and sets up for the next leg higher. A break over 61.50 on strong volume is a good indication it is ready to move higher once more.
SU: An independent energy company that sold with most of the oil stocks in May and June. That has set up a double bottom base, and after a strong run to end June it is now forming the handle. Tumbled to the 10 day EMA Friday, but that is not bad as volume was low and it needed this last shakeout. May take a few more days to form the handle and then give us the breakout higher.
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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