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Begin part 3 of 3
THE PLAYS
Good movers: WYNN; EXPD; JBLU
Strong plays:
1) DRIV: Setting up for another break higher.
2) GYMB: Nice action as volume runs higher as it forms the handle
3) PTEN: Breaking lower below the 50 day MA
4) JTX: Low volume rebound has now tested the 50 day EMA.
5) FSL: Good action Friday.
6) XPRSA: Rebounded on low trade to test the 200 day SMA breakdown.
NEW PLAYS:
Upside plays:
Play Date: 09/09/2006
BIDU (Baidu.com--$79.94; +1.64; optionable): Chinese interactive internet
http://biz.yahoo.com/p/b/bidu.html
STATUS: Test 50 day EMA. BIDU gapped lower in late July from a 10 week rising base. It sold to the 200 day SMA (68.51) in early August, then rebuilt to 80, moving laterally the past three weeks between 77 and 80 where the 50 day EMA (78.11) resides. Volume jumped up above average Friday for the first time in a month as BIDU jumped up to the top of this range. Volatile, but can run like the wind when it gets moving. Looking to move in and catch a gust higher as it breaks through 80 on continued strong volume.
Volume: 2.529M Avg Volume: 2.319M
BUY POINT: $80.25 Volume=3.2M Target=$92.90 Stop=$78.00
POSITION: BDQ LP - Dec. $80c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/bidu.html
Play Date: 09/09/2006
DRIV (Digital River--$48.55; +0.16; optionable): e-commerce outsourcing for software and high-tech markets
http://biz.yahoo.com/p/d/driv.html
STATUS: Breakout test. Ready to move back into DRIV as the river looks ready to continue flowing higher. DRIV continues working laterally over the 10 day EMA (48.41), consolidating the strong break higher in mid-August. Made us some nice money on the move, and after getting the dips on Thursday it rebounded from below the 18 day EMA (47.67) to hold the 10 day. Looking for it to hold near this level and then continue the breakout move. Some good upside volume last week, showing some accumulation continued even as there was some distribution in the overall market.
Volume: 624.399K Avg Volume: 944.923K
BUY POINT: $49.28 Volume=1.4M Target=$56.50 Stop=$47.55
POSITION: DQI LJ - Dec. $50c (52 delta) &/or Stock
http://www.investmenthouse.com/ct/driv.html
Play Date: 09/09/2006
GYMB (Gymboree--$34.18; +0.20; optionable): Children's apparel stores
http://biz.yahoo.com/p/g/gymb.html
STATUS: Cup w/handle. Very nice 12 week base has formed as GYMB consolidates the June move to a new all-time high. Needed to take a nap and have some cookies before it was ready to run again. It gapped higher in late August on some good same store sales numbers and then moved laterally and lower last week, tapping and holding the 50 day SMA (32.78) on the intraday lows and rebounding. Good action Friday, rebounding as volume jumped. Strong 4 to 1 accumulation in the base (4 up price weeks on rising volume to 1 down price weeks on rising volume) shows plenty of buying, setting up the breakout from this handle.
Volume: 913.972K Avg Volume: 977.429K
BUY POINT: $34.75 Volume=1.5M Target=$41.75 Stop=$33.00
POSITION: GQU BG - Feb. $35c (51 delta) &/or Stock
http://www.investmenthouse.com/ct/gymb.html
Play Date: 09/09/2006
SIMG (Silicon Image--$11.68; 0.00; optionable): Semiconductors
http://biz.yahoo.com/p/s/simg.html
STATUS: Cup w/handle. SIMG has again moved up to the high that has stalled it over the past 15 months. It is showing very solid upside volume, however, the past week as it bangs at that resistance point as it tries to clear its current 18 week base. Strong money flow is leading higher, and strong 8 to 3 accumulation in the pattern (8 up price weeks on rising volume to 3 down price weeks on rising volume) shows plenty of buying, setting up the breakout this time.
Volume: 1.15M Avg Volume: 1.172M
BUY POINT: $12.25 Volume=1.8M Target=$14.75 Stop=$11.42
POSITION: QSI LV - Dec. $12.50c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/simg.html
Downside:
Play Date: 09/09/2006
ADI (Analog Devices--$29.63; +0.33; optionable): Semiconductors
http://biz.yahoo.com/p/a/adi.html
STATUS: Put. Not all of the semiconductors are in bullish patterns. ADI continues in its downtrend, unable to break the trend as did the leaders in sector. Indeed, ADI gapped lower in August, and has recovered to fill most of the gap, moving up to the 50 day EMA (30.63) last week and fading. Volume jumped Thursday as ADI fell through the 10 and 18 day EMA. A modest bounce Friday on low volume to test the 10 day EMA has set up the next leg lower. Looking ot move in as it turns back down. A move to the target lands us a 42%ish gain.
Volume: 3.536M Avg Volume: 4M
BUY POINT: $29.48 Volume=4M Target=$28.00 Stop=$29.80
POSITION: ADI VF - Oct. $30p (-40 delta)
http://www.investmenthouse.com/ct/adi.html
Play Date: 09/09/2006
JTX (Jackson Hewitt--$33.34; +0.28; optionable): Tax services
http://biz.yahoo.com/p/j/jtx.html
STATUS: Put. Nice uptrend through mid-August as JTX was a market leader. It peaked at that point, however, as volume dried up on a new high; that is always a danger signal. It faded and then gapped through the 50 day EMA (33.49) on huge trade the last week of the month. It rallied back the past week on lower, below average volume, making it back to the 50 day EMA on the Friday intraday high. Money flow is in the toilet, and after this low volume rebound it looks as if price is going to follow it. A move to the target lands us a 45%ish gain.
Volume: 308.6K Avg Volume: 410K
BUY POINT: $33.18 Volume=410K Target=$31.15 Stop=$33.75
POSITION: JTX VG - Oct. $35p (-56 delta)
http://www.investmenthouse.com/ct/jtx.html
Play Date: 09/09/2006
PTEN (Patterson-Uti Energy--$25.28; -1.10; optionable): Onshore drilling contractor
http://biz.yahoo.com/p/p/pten.html
STATUS: Put. After a 4 week lateral consolidation attempt between 28 and 26, PTEN broke the range Friday, diving lower and closing near the session low. This follows as May through July downtrend and an attempt at a reverse head and shoulders pattern that broke down with the Friday move. Looking for PTEN to follow the money lower and revising the July lows at 22.55. A move to the target lands us a 60%ish gain.
Volume: 3.301M Avg Volume: 2.82M
BUY POINT: $25.14 Volume=3M Target=$23.05 Stop=$25.45
POSITION: NZQ VE - Oct. $25p (-41 delta)
http://www.investmenthouse.com/ct/pten.html
CONTINUING PLAYS:
Upside:
Play Date: 08/22/2006
COHR (Coherent--$35.99; +0.17; optionable): Scientific and technical instruments
http://biz.yahoo.com/p/c/cohr.html
STATUS: Double bottom w/handle. Still working on a very nice handle to its base, holding near the 10 day EMA (35.95) as it sets up for the breakout. Like how it is holding in the middle of the handle after the earlier lower dips; that gives it plenty of momentum as it clears the handle without having to start in the bottom of the handle and rally hard just to make the breakout. To recap: COHR is holding up very well, showing great relative strength as it works on its three week handle to the 4 month base. Nice volume on the upside sessions shows accumulation continues. Money flow remains strong. Just going to be patient and let COHR finish its pattern during the market selling.
Volume: 172.813K Avg Volume: 246.691K
BUY POINT: $36.74 Volume=350K Target=$43.00 Stop=$35.15
POSITION: HRQ AG - Jan. $35c (59 delta) &/or Stock
http://www.investmenthouse.com/ct/cohr.html
Play Date: 09/07/2006
FSL (Freescale Semiconductor--$30.75; +0.43; optionable): Semiconductors
http://biz.yahoo.com/p/f/fsl.html
STATUS: Cup w/handle. Looked solid Friday, rallying to the buy point but backing off late. Still set up very well to continue higher and the breakout. To recap: After giving us a decent little run in the third leg of the summer rally FSL has faded back Wednesday and Thursday after a strong Tuesday move. It tapped at the 18 day EMA (30.06) on the intraday lows and bounced back, showing a bit stronger, above average volume Thursday. Looking for it to complete the test and then rebound. Want to see some continued strong volume as it does. Nice 17 week pattern has formed over the 200 day SMA (28.12), setting up for a breakout to a new all-time high.
Volume: 2.745M Avg Volume: 2.449M
BUY POINT: $30.94 Volume=3.5M Target=$35.95 Stop=$29.75
POSITION: FSL AF - Jan. $30c (58 delta) &/or Stock
http://www.investmenthouse.com/ct/fsl.html
Play Date: 09/06/2006
WTSLA (Wet Seal--$5.62; -0.04; optionable): Teen apparel stores
http://biz.yahoo.com/p/w/wtsla.html
STATUS: Cup w/handle. Still working on the handle to the base, working laterally as the 10 day EMA (5.46) rises to meet it. Very nice action in a solid base, and we anticipate the breakout this week. To recap: WTSLA surged to end August on some solid same store sales and has now spent the past few sessions easing back, forming a handle to its 5 month base. This is part of a larger 15 month double bottom. Strong 7 to 4 accumulation in the current base shows solid buying. Showed great relative strength in the market selling, using it to set up its break higher. Going to be patient and let it form the handle and then break higher.
Volume: 517.689K Avg Volume: 667.037K
BUY POINT: $5.82 Volume=980K Target=$7.00 Stop=$5.41
POSITION: WTQ LA - Dec. $5c (60 delta) &/or Stock
http://www.investmenthouse.com/ct/wtsla.html
DOWNSIDE:
Play Date: 09/06/2006
XPRSA (U.S. Xpress--$19.97; +0.72; optionable): Trucking
http://biz.yahoo.com/p/x/xprsa.html
STATUS: Head and shoulders. Nice break below the 200 day SMA (20.05) on Wednesday and then a low volume test of that level Friday. That sets up the play perfectly for more downside. To recap: XPRSA has formed a broad top May through August, a bearish head and shoulders pattern that is starting the break lower on rising trade. XPRSA has already made us money as it set up this pattern. Wednesday XPRSA broke below the 200 day SMA, cracking below the neckline of the pattern, rebounding modestly to test to end the week. Looking to move in as XPRSA continues lower and follows the diving money flow lower. A move to the target lands us a 45%ish gain. Moved up the entry point.
Volume: 117.89K Avg Volume: 242.306K
BUY POINT: $19.66 Volume=245K Target=$17.95 Stop=$20.10
POSITION: SUA VD - Oct. $20p (-57 delta)
http://www.investmenthouse.com/ct/xprsa.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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