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us stock market, stock recommendation
Begin Part 2 of 2
Index:
OEX (Standard & Poors 100--$580.37; +1.05; optionable):
STATUS: Pulled back over the last week, coming to rest at the 50 day MVA the last 2 days, today showing a doji with a long tail. The index dropped back from resistance at the 600 level, a move that has occurred twice since late November. We are looking for a move back up from the support, for another run to the resistance (initial target). Volume was up the last 2 days (to 1.4 million Wednesday; avg. 1.3 million). The 18 day MVA is at 584.49.
BUY POINT: Aggressive: 582 on continued rising volume.
POSITION: January $580 calls to buy (OEB AP). Deltas unavailable.
DJX (1/100 Dow --$98.95; +0.07; optionable):
STATUS: After hitting resistance at the 200 day MVA a week ago (at the 101 range, and that was after the index broke resistance at 100), the DJX pulled back on falling volume until hitting the 18 day MVA the last 2 days (at 98.71). Volume, however, was rising since Tuesday, up today to 1.4 million (avg. 1.26 million). The index was off the low of 98.06 and showing a hammer doji, a bullish indicator. Looking for the move up with an intial target at the 200 day MVA, currently at 101.26.
BUY POINT: Aggressive: 99 on continued rising volume.
POSITION: January $96 or $98 calls to buy (DJV AR or AT).
NTAP (Network Appliance--$23.59; +2.22; optionable): Computer Hardware
http://biz.yahoo.com/p/n/ntap.html
STATUS: Shot up on stronger volume (23.5 million; avg. 11.2 million), extending the move started Monday when it moved up after testing the breakout from a cup with handle. NTAP is too extended for getting into here (has just about reached our target of 24), so we will look for another pullback; the stock is likely to form another handle before breaking over next level of potential strong resistance at 29-30. It has been a nice run, and the stock may tack on more to this move, though any entry points here are aggressive. New target after a pullback: 29-30
BUY POINT: 21, after a pullback to test the 20.50 range. Stop: 19.53 (7%).
POSITION: Stock and/or January $20 calls to buy (NUL AD).
http://www.investmenthouse.com/cd/ntap.html
EMLX (Emulex--$40.70; +1.36; optionable): Computer Hardware
http://biz.yahoo.com/p/e/emlx.html
STATUS: Continued moving (hitting our new buy point at 39 Tuesday) after breaking above some resistance on Monday, but volume is falling back (down to 8 million Wednesday; avg. 8.4 million). Nevertheless, EMLX broke higher resistance, this time the June and July closing highs. It can give another pullback, and we are looking for a more extended one, perhaps to the 37 range (and the 10 day MVA is currently at 36.20). That could start here with the falling volume. Target: 50
BUY POINT: Aggressive: 38, after a pullback to test the 37 range on continued rising volume. Stop: 35.24 (7%)
POSITION: Stock and/or January $35 calls to buy (UMQ AG). Deltas unavailable.
http://www.investmenthouse.com/cd/emlx.html
Some techs that are testing the good move up last week:
POWI (Power Integrations--$24.59; -0.76; optionable): Semiconductor
http://biz.yahoo.com/p/p/powi.html
STATUS: Still pulling back from its recent attempt at a breakout from the handle to its saucer base. The stock tried to make its move Monday, but couldn't hold a slight bounce and today was back down to the 18 day MVA but showing another shooting star doji, which can be a bullish indicator. The doji is right on top of the moving average, and with volume rising we will look for the move up. Support looks good at 24 if POWI happens to slip through this support. Target: 35. Stock shows strong money flow.
BUY POINT: Aggressive: 27 on continued rising volume in a rally. Breakout: 28.61 on volume of 758,000. Stop: 26.61 (7%).
POSITION: Stock and/or January $22.50 calls to buy (QPW AX).
http://www.investmenthouse.com/ct/powi.html
XLNX (Xilinx--$42.24; +0.69; optionable): Semiconductor
http://biz.yahoo.com/p/x/xlnx.html
STATUS: Still testing the breakout move when the stock moved back over its 200 day MVA over a week ago. XLNX has hit for the last 4 of 6 days some intraday highs near 43-43.25, and it is above that cluster of prices that we have plotted the buy point. Money flow is strong, and relative strength moving higher. Hit the aggressive buy point yesterday. Target: 50
BUY POINT: Breakout: Over 43.25 on strong volume in a rally (12 million). Stop: 40.22 (7%)
POSITION: Stock and/or January $35 calls to buy (XLQ AG).
http://www.investmenthouse.com/ct/xlnx.html
Moving average bounce play:
MUSE (Micromuse-$17.07; +0.40; optionable): Software
http://biz.yahoo.com/p/m/muse.html
STATUS: MUSE continues to hug its 10 day MVA in a three-day lateral movement, refusing to head down to test our targeted support at the 16 range. The stock has bounced twice from its 18 day MVA (now at 15.82), but with volume remaining quite low for the last 4 days, on this pullback from the last bounce looks ready to hold the 10 day MVA here for the move back up (volume was back down to 1.65 million; avg. 3.7 million). December high is 19 at the top of this pullback. Good buying. Target: 25, the 200 day MVA.
BUY POINT: Aggressive: 17.50 on volume of 3.7 million or higher. Stop: 16.28 (7%).
POSITION: Stock and/or January $15 calls to buy (QUM AC).
http://www.investmenthouse.com/ct/muse.html
MCRS (Micros System--$23.70; -0.13; no options): Software
http://biz.yahoo.com/p/m/mcrs.html
STATUS: After trying to break out of the handle Monday, MCRS fell back to a test of the 50 day MVA (23.19), Wednesday showing a shooting star doji with volume rising (118,700; avg. 73,454). We were not looking for the stock to touch back this far, but the support may bounce it right back up, so we will give it another day or so based on the doji. Money flow and buying still look good. If it does not move back over the 18 day MVA quickly, we will head out and check back later. MCRS is in a cup with handle base of 13 weeks. Target: 31
BUY POINT: Aggressive: 24.50 (over the 18 day MVA at 24.37) on continued rising volume. Stop: 22.79 (7%). 26.13 on volume of 110,000 or higher. Stop: 24.30 (7%)
POSITION: Stock.
http://www.investmenthouse.com/ct/mcrs.html
ASE (American Science--$22.30; +0.70; no options): Health Services
http://biz.yahoo.com/p/a/ase.html
STATUS: Gave us the breakout and run to 24.25, just off our target of 25, then pulled back immediately. The stock held its ground to set up today's bounce, but ASE was again off its high (23.50), which tapped near the Monday's breakout closing price. Volume remains very high though down today to 221,800 (avg. 98,181). Look for further consolidation (2-3 days) before the stock can break out again after this test and over the high. Money flow and relative strength are high, and buying looking good, too. New target after the test: 28
BUY POINT: After a pullback on lower volume to the 21 range.
POSITION: Stock.
http://www.investmenthouse.com/ct/ase.html
Some small stocks to look at:
RNBO (Rainbow Tech--$6.91; -0.24; optionable): Software
http://biz.yahoo.com/p/r/rnbo.html
STATUS: Gave us the move we were looking for starting Monday, jumping out of the lateral movement that was a test of its breakout over the 200 day MVA, and ran to today's intraday high of 7.32 before pulling back with a tight doji on sharply lower volume (198,100; avg. 137,000). RNBO can form a handle here, since it has just about completed the 6.5-month saucer base. Our target was 8, but on a new breakout over today's high after another pullback, we will up that to 9. Showing excellent money flow and buying.
BUY POINT: Aggressive: On a move back up from the 6.50-6.60 range: 6.85 on rising volume. Breakout: 7.25 on volume of 206,000 or higher. Stop: 6.93 (7%).
POSITION: Stock and/or January $5 calls to buy (BQO AA).
http://www.investmenthouse.com/ct/rnbo.html
Short-term trade:
AUDC (Audiocodes--$4.61; -0.14; optionable): Scientific & Technical
http://biz.yahoo.com/p/a/audc.html
STATUS: Deep in a 15-month base and pulling off resistance near 5 for the second time. If it can catch support at the 10 day or 18 day MVAs (at 4.27 or 4.06, respectively), the higher low (previously AUDC pulled back to the 50 day MVA at the 3.50 range before heading back up) can firm up the ascending wedge the stock looks like it is trying to form. That is what we would like it to do at any rate, and the sharply lower volume today encourages that move (156,000; avg. 380,318). Even if the stock slips below the 18 day MVA, the up trendline supporting the lows is at about 3.85, which can also offer support. Strong money flow and buying. Target: 6.30 (200 day MVA)
BUY POINT: Breakout: 5.13 on volume of 513,000 or higher. Stop: 4.77 (7%).
POSITION: Stock and or January $5 calls (ZRD AA).
http://www.investmenthouse.com/ct/audc.html
Back On:
MXIM (Maxim Integrated--$59.79; +1.89; optionable): Semiconductor
http://biz.yahoo.com/p/m/mxim.html
STATUS: Nice bounce from the 10 day MVA (57.79) but volume dropped sharply back to 4.4 million (avg. 6 million). MXIM is testing the breakout from its cup with handle, and this is the move we wanted after the 4-day lower-volume pullback, just on higher volume. We will look for that to improve tomorrow to support the move, with the stock just about at our aggressive buy point. Money flow is strong and relative strength is breaking out ahead of price, which is bullish. Target: 75.
BUY POINT: Aggressive: 60 on rising volume in a rally. Stop: 55.80 (7%)
POSITION: Stock and/or January $55 calls to buy (XIQ AK).
http://www.investmenthouse.com/ct/mxim.html
Puts:
LE (Land's End--$44.28; +0.13; optionable): Retail
http://biz.yahoo.com/p/l/le.html
STATUS: Sold down almost to the 50 day MVA (42.07) today (low of 42.60) but rebounded to close with a doji. The 50 day was our target for the put play, and when it started back up, it was time to get out of the positions. Volume was sharply higher at 429,100 (average 285,300) and this pattern indicates a possible bounce just as on the indexes: a jump in volume on a test of the 50 day MVA is a sign of institutions stepping in to support. If it continues the bounce we will see how it handles the short-term MVA's (46), and see about possible new positions.
http://www.investmenthouse.com/ct/le.html
IDTI (Integrated Device Tech--$24.75; +1.25; optionable): Semiconductor
http://biz.yahoo.com/p/i/idti.html
STATUS: Today we got the little relief bounce we were expecting, moving back up on reduced volume (5.25 million; average 2.9 million) from a mid-October low. Not a very strong move, and this is what we were looking for to set up new entry points for new or additional put positions. IDTI could reach as low at the October lows at 17.50.
BUY POINT: A drop back through 23.50 on increased volume.
POSITION: January $30 puts to buy (ITQ MF).
http://www.investmenthouse.com/ct/idti.html
CONTINUED PLAYS:
TEST OF BREAKOUT:
IBM ($123.20; +1.70; optionable): Computer Hardware
http://biz.yahoo.com/p/i/ibm.html
STATUS: Tapped down to the 10 day MVA (119.36) before moving back up and taking out the recent highs. IBM had pulled laterally after last week's breakout from a 6.5-month cup with handle, looking good and setting up for another run. Volume was up today but not outstanding at 7.94 million (average 8.56 million), but still a decent move considering the overall market action. Looking for more, but with current positions watching the upper channel line at 125-127. Target: 140
BUY POINT: If we get a low volume test of the 120 range, a move back over 123 on increased volume. Stop: 114.39 (7%). The aggressive can play a move up from here on increased volume, in a solid market.
POSITION: Stock and/or January $120 calls to buy (IBM AD).
http://www.investmenthouse.com/ct/ibm.html
ORLY (O'Reilly Automotive--$34.56; +0.26; optionable): Auto Parts
http://biz.yahoo.com/p/o/orly.html
STATUS: Testing the breakout. Made a huge breakout move last week, but has made a rather orderly pullback, tapping back to its former handle highs at 34 the last two sessions (10 day MVA at 34.34). Today it showed a loose 'shooting star' doji, reaching up to 35.99 intraday before retreating. Volume was down at 386,500 (average 529,800), and ORLY could be ready to move back up off of this pattern. Super money flow and buying. Target: 41
BUY POINT: Aggressive: 36.10 on above average volume or higher. Stop: 33.57 (7%). New high breakout: 37.47 on above average volume. Stop: 34.78 (7%)
POSITION: Stock and/or January $35 calls to buy (OQR AG; low open interests).
http://www.investmenthouse.com/ct/orly.html
MOVING AVERAGE BOUNCE PLAYS:
Removed JAKK.
WEDGES, PENNANTS, and FLYING PLATEAUS (AND FLAGS): These are some of our favorite patterns as the moves can be explosive. In this market, however, we need to see the move on the breakout on strong volume.
BASING/TRADING RANGES:
SERO (Serologicals--$20.16; +0.11; optionable): Biotechnology
http://biz.yahoo.com/p/s/sero.html
STATUS: SERO broke out of a double bottom base in May before moving into this rather choppy cup with handle. The stock has settled over its 18 day MVA (19.72), today showing a 'star' doji (intraday high 20.75) on continued low volume (103,500; average 245,000). Continuing to look for a breakout over the December high 22 (made on a intraday spike); previous high in the handle is from November (21.50). Excellent money flow and buying. Target: 27.
BUY POINT: 22.13 on volume of 381,000 or higher. Stop: 20.58 (7%).
POSITION: Stock and/or January $17.50 calls to buy (QEO AW; low open
interests).
http://www.investmenthouse.com/ct/sero.html
IBI (Intimate Brands--$13.98; -0.01; optionable): Apparel
http://biz.yahoo.com/p/i/ibi.html
STATUS: Still holding the pennant handle to the 19-week cup with handle base. The stock is squeezing down against its 18 day MVA (13.96), pressed from above by the 200 day (14.19), showing consecutive dojis on below average volume (down to 930,300 today; average 1.26 million). Looking the hold here and the breakout over 14.78 (handle high from November). Excellent money flow. Target: 18.
BUY POINT: Breakout: 14.91 on volume of 1.6 million or higher. Stop: 13.87 (7%).
POSITION: Stock and/or January $10 calls to buy (IBI AB)
http://www.investmenthouse.com/ct/ibi.html
PHM (Pulte Homes--$43.49; +1.77; optionable): Materials & Construction
http://biz.yahoo.com/p/p/phm.html
STATUS: Made another breakout move today, but could not hold on. PHM made a nice breakout run from an ascending wedge (at the bottom of the 4.5-month cup, part of a larger 7-month base), and for the past week settled back toward support at the 10 day MVA (41.12). Today it took off and hit 44.99, but pulled back and closed below the handle high (43.70). Volume was way up at 1.05 million (we were looking for 800,000), so we will see if it can continue the breakout move. Problem: much of today's volume was on the drop back down. Target: 53 (perhaps forming another handle along the way).
BUY POINT: After a hold of the 43 range, a move over 44 on continued strong volume. Stop: 40.92 (7%).
POSITION: Stock and/or January $40 calls to buy (PHM AH). Delta unavailable.
http://www.investmenthouse.com/ct/phm.html
HD (Home Depot--$48.35; +0.38; optionable): Retail
http://biz.yahoo.com/p/h/hd.html
STATUS: Holding nicely. After a great move up from the 50 day MVA (then 42.50, now 44.51), HD has dipped back a bit in a lateral handle consolidation over the last several sessions. Today HD pushed up slightly from its support at the 10 day MVA (47.76), moving on increased volume of 6.8 million (average 8.4 million). There is resistance at 50 from the July-August highs, and this is the real breakout ahead if it can do it. Looks good in this pattern, with the recent breakout high at 50.40. Looking for a breakout over that high. Target: 58
BUY POINT: Breakout: 50.53 on volume of 11.5 million or higher. Stop: 46.99 (7%)
POSITION: Stock and/or January $45 calls to buy (HD AI).
http://www.investmenthouse.com/ct/hd.html
VRTS (Veritas--$44.42; +1.77; optionable): Software.
http://biz.yahoo.com/p/v/vrts.html
STATUS: Received an upgrade and gapped up to breakout (breakout buy point had been 44.02). VRTS reached up to 45.68 intraday, finally closing with a doji as volume took off to 25.9 million (average 14.9 million). The stock has been moving in a wedging handle (to a cup with handle pattern of 22 weeks), showing good price/volume action of late. Resistance is just ahead at the 200 day MVA (47.17), but still buy here as a breakout stock, although we could see a test back that we would want to see hold 44 and then start back up on good volume. Target: 53
BUY POINT: After showing it can hold 44, a move over 45 on continued strong volume. Stop: 41.85 (7%)
POSITION: Stock and/or January $40 calls to buy (VIV AH).
http://www.investmenthouse.com/ct/vrts.html
CHKP (Check Point Software Tech--$43.02; +2.12; optionable): Security Software
http://biz.yahoo.com/p/c/chkp.html
STATUS: Another stock that gapped up, this time on news of an agreement with Nokia. CHKP reached over the recent high (43) at its high of 43.95, but pulling back a bit to finish with a loose doji on high volume (13.6 million; average 9.7 million). We will see if it can hold at the former handle high, and is a buy on a move up from here on continued strong volume, although we are watching the 200 day MVA as resistance, ahead at 45.49. The target is 52 on a move over the 200 day MVA.
BUY POINT: In a strong Nasdaq, 43.50 on average or better volume. Stop: 38.56 (7%).
POSITION: Stock and/or January $40 calls to buy (KEQ AH).
http://www.investmenthouse.com/ct/chkp.html
KLAC (Kla-Tencor--$56.31; +0.64; optionable): Semiconductor
http://biz.yahoo.com/p/k/klac.html
STATUS: Still looking good, having made a breakout move last week but pulling back off of its down trendline (connecting September 2000 and May-August 2001 highs, currently at 56.50). Not a bad consolidation here (handle to its 17-week v-bottomed cup), moving on below average volume (8.26 million today; average 9.5 million) and today testing its 10 day MVA at the low of 54.25 before running back up again to close. We are looking for KLAC to blast through the trendline and the last week's high (57.60). Target: 69
BUY POINT: 57.73 with above average volume. Stop: 53.69 (7%).
POSITION: Stock and/or January $50 calls to buy (KCQ AJ).
http://www.investmenthouse.com/ct/klac.html
Updating this covered call play:
BRCD (Brocade--$39.98; +1.18; optionable): Computer Peripherals
http://biz.yahoo.com/p/b/brcd.html
STATUS: BRCD continues to push upward, but the recent moves have been on rather low volume. We had been looking for a possible covered call play on this one with a move back down after its fine move last week, but it never made much of a retreat. It is having a bit of trouble with 40, pulling back from 40.23 yesterday and closing just short of that mark on lower volume (16.76 million; average 17.7 million) today, so we could get a rest here. However, if the Nasdaq continues to hold BRCD might only retreat as far as the 10 day MVA (36.48) and take off again with market strength, so we will hold off on the call sales for now. Still targeting 43.
BUY POINT: After a dip back toward the 10 day MVA on continued below average volume, a move over 38 on increased volume. Stop: 35.34 (7%).
POSITION: Stock and/or January $35 calls to buy (UBF AF).
http://www.investmenthouse.com/ct/brcd.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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us stock market
stock recommendation
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