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stock recommendation, stock market today
Begin Part 2 of 2
THE PLAYS:
Best Plays:
1) AVIR: Ready to break out.
2) FMKT: Heading higher.
3) COHU: Looks ready to head higher.
4) SANM: Holding support with volume continuing to fall in the test of the breakout.
5) ORLY: Remains a buy on the breakout.
6) EMLX: A tight pattern at support.
7) SERO: Nice move up in the handle.
8) CHKP: Made a solid move today.
NEW PLAY:
AVIR (Aviron--$48.93; +1.79; optionable): Biotechnology
http://biz.yahoo.com/p/a/avir.html
STATUS: Making another move up from the base of the handle to its 6-month cup. Volume has been strong over the previous 2 sessions but surged higher Monday (1.6 million; avg. 910,000) with the stock just under the buy point in the handle. Looking for a breakout; the highs at the start of the base are near 63, but our initial target is 59. Money flow is solid and buying excellent.
BUY POINT: Breakout: 49.13 on volume of 1.36 million or higher. Stop: 45.69 (7%).
POSITION: Stock and/or February $45 calls to buy (QCV BI).
http://www.investmenthouse.com/ct/avir.html
FMKT (Freemarkets--$23.41; +1.36; optionable): Software (internet)
http://biz.yahoo.com/p/f/fmkt.html
STATUS: In the bottom but off the lows of a 16-month base (highs at 92), currently in a shorter, 10-month base with highs near 27. The stock has started to show some strong volume on the recent run up from its 50 day MVA in late November, when it broke out from a lateral-type pattern that ran price up to the December high (24). After a 2-day pullback to test the 10 day MVA, FMKT shot back up Monday with volume strong and rising (2.78 million; avg. 1.1 million) on news of a renewed partnership with Dana Corp. FMKT has just about completed the right side of the current base, and though this was a short handle, the strong volume suggests a breakout over 24. Huge money flow and buying. Target: 29
BUY POINT: Breakout: 24.13 on continued strong volume. Stop: 22.44 (7%)
POSITION: Stock and/or April $20 calls to buy (FAQ DD).
http://www.investmenthouse.com/ct/fmkt.html
GENZ (Genzyme--$58.89; +0.32; optionable): Biotech
http://biz.yahoo.com/p/g/genz.html
STATUS: In a shallow cup (with a big dip in September) of almost 6 months, and has completed the right side (although GENZ hit a high at 64 at the start of the base). Currently the stock is consolidating above the 10 day MVA, tapping closer to the 18 day MVA last week (at 57.74 and 56.94, respectively). Resistance is just under 60. Volume has been building up the previous 2 sessions, on the heels of a huge volume spike last Thursday (up Monday to 8.8 million; avg. 5 million). We are looking for a breakout over the December highs from this pattern. GENZ has strong money flow, and buying is really surging. Target: 72
BUY POINT: 59.83 for the breakout, on volume of 7 million or higher. Stop: 55.64(7%)
POSITION: Stock and/or April $50 calls to buy (GZQ DJ).
http://www.investmenthouse.com/ct/genz.html
New (from the weekend):
TUNE (Microtune--$23.00; -1.00; optionable): Consumer Durables
http://biz.yahoo.com/p/t/tune.html
STATUS: After the huge volume on Friday and attempt to break resistance, we were looking for TUNE to make that move today, but the stock, after hitting a high at 25.10, sold back (volume still strong but lighter at 2.1 million; avg. 1 million). It closed just above its 10 day MVA, 18.50, and at its intraday low, so can test that support or the 22 level, where there is other potential support from some June and July prices. The 18 day MVA is at 21.43. TUNE is trying to break to a new high after testing its recent breakout from a 5-month base. Target: 30
BUY POINT: Aggressive: Over 23 on a bounce from support at the 10 day MVA or the 22 range, on rising volume.
POSITION: Stock and/or April $20 calls to buy (TUF DD).
http://www.investmenthouse.com/ct/tune.html
NBIX (Neurocrine Biosciences--$52.83; +3.28; optionable): Health Services
http://biz.yahoo.com/p/n/nbix.html
STATUS: Nice move today as the stock followed through on Friday's strong move up from below the 18 day MVA, strong support since early November. NBIX broke out of a long double-bottom type base later that month, and after the test has vaulted to this new all-time closing high. Volume was lower at 1.1 million (avg. 479,000), but that was the case with the overall market. The stock can head higher from here before exhausting this run, as long as volume pumps back up. Hit our aggressive buy point early and headed up from there. Excellent money flow and buying, relative strength breaking out. Target: 58
BUY POINT: Riding positions taken at 49.75. Pullback: 51, after a test of the 50.50 range and on a strong move back up.
POSITION: Stock and/or February $45 calls to buy (UOT BI).
http://www.investmenthouse.com/ct/nbix.html
ULGX (Urologix--$21.30; +1.55; optionable): Health Services
http://biz.yahoo.com/p/u/ulgx.html
STATUS: Popped over resistance after testing the breakout. ULGX gapped up over a point on the opening price (20.99), leaping over our aggressive buy point (20.40) then held near that level to close (doji). Volume dropped drastically from Friday's strong numbers, back below average to 111,300 (avg. 126,500). Still, the stock just broke the resistance at the previous December high (21.25), price reached when ULGX topped out recently on the nice breakout run over its 200 day MVA (currently at 18.33). The volume drop was rather extreme in context of overall market volume (lighter), but we will look for the stock to hold and continue to move higher after this test of the breakout. If not, look for support just above 20 (or in that area). Target: initial 26. Strong buying, and money flow moving higher.
BUY POINT: Over 21.40 on volume in range of 170,000. Stop: 19.95 (7%).
POSITION: Stock and/or April $17.50 calls to buy (OZU DW). No delta at the time of this writing.
http://www.investmenthouse.com/ct/ulgx.html
COHU (Cohu Inc--$20.68; +0.18; optionable): Semiconductor
http://biz.yahoo.com/p/c/cohu.html
STATUS: A cup with handle base of almost 6 months, part of a larger 22-month base.
COHU made a small move up on the day, but the stock closed positively only after tapping a low (19.50) that had price below support, the 18 day MVA (19.91). Aggressive buy point was over 20.60. Volume was high and stronger at 136,400 (avg. 75,000), so with the close near the high of 20.75 we continue to look for the breakout over 21.93. Excellent money flow and buying. Target: 26
BUY POINT: Breakout: 22.06 on volume of 113,000 or higher. Stop: 20.52 (7%).
POSITION: Stock and/or February $17.50 calls to buy (QCH BW).
http://www.investmenthouse.com/ct/cohu.html
ORBK (Orbotech--$29.25; +0.24; optionable): Diversified Electronics
http://biz.yahoo.com/p/o/orbk.html
STATUS: Broke out over its 200 day MVA earlier this month and moved higher up in the right side of a 7-month base (high at 40.39 and part of a larger base of 22 months). ORBK is back near the 18 day MVA in a test of that breakout, closing with a 'shooting star' doji just above that support, but not until it tried to make a nice move stick today; the stock was up to 31.15 but low volume (203,000; avg. 256,000) did not support the rise and it pulled back down. Will need volume to surge back up to break the stock over its December high (32.30). Good money flow. Target: 37
BUY POINT: Aggressive: 29.60 on rising volume. Stop: 27.53 (7%).
POSITION: Stock and/or April $25 calls to buy (OKQ DE).
http://www.investmenthouse.com/ct/orbk.html
ESST (Ess Tech--$21.85; -1.23; optionable): Semiconductor
http://biz.yahoo.com/p/e/esst.html
STATUS: Was heading up in a nice breakout move Friday on a strong bounce from the 18 day MVA, but with volume continuing to climb Monday (2.1 million; avg. 660,000), ESST sold back. The stock tapped on its low of 21.32 near its 10 day MVA (21.05) and bounced, but can re-test that support or even the 18 day MVA at 20.08. We were looking for a run up off Friday's bounce, but will have to look for that move after the stock digests today's action. Target: 29. Excellent money flow and buying.
BUY POINT: Pullback: Aggressive: 21, on a bounce from the 18 day MVA on strong volume. Stop: 19.53 (7%)
POSITION: Stock and/or April $17.50 or $20 calls to buy (SEZ DW or DD).
http://www.investmenthouse.com/ct/esst.html
SANM (Sanmina--$22.38; +0.08; optionable): Electronics
http://biz.yahoo.com/p/s/sanm.html
STATUS: SANM is holding at the level of Friday's close, just above support at the 18 and 200 day MVAs (21.92 and 22.05, respectively). The stock is testing the early December breakout over the current support levels as volume continues to decrease (down again Monday to 9.27 million; avg. 9.6 million). Continue to look for a move up and eventual break over the December high at 25.65. Strong money flow, good buying. Target: 29
BUY POINT: Aggressive: 22.95 (over the 10 day MVA, 22.79) on rising volume. Stop: 21.34 (7%)
POSITION: Stock and/or April $20 calls to buy (SQN DO).
http://www.investmenthouse.com/ct/sanm.html
ALOY (Alloy Online--$18.80; +1.16; optionable): Internet Software
http://biz.yahoo.com/p/a/aloy.html
STATUS: Testing the breakout from a 3.5-month base (within a 23-month base) and after finding support at the 18 day MVA (16.82) bounced Friday and continued higher Monday with volume stronger (793,800; avg. 438,000). Looks ready to continue the move, but we will be watching resistance at the 19 range, and the December high is just ahead at 19.55, reached on the breakout from the recent ascending wedge-type base of 3 months' length. Since the stock has moved for 2 days on the bounce, we will let it break the resistance at 19 (hit three times this month) on stronger volume for adding to positions. ALOY hit our aggressive buy point of 18.25 on the move. Target: 22
BUY POINT: Riding positions taken at the previous buy point of 18.25. Breakout: Over 19 on continued strong volume.
POSITION: Stock and/or February $15 calls to buy (YLQ BC).
http://www.investmenthouse.com/ct/aloy.html
Puts:
DCTM (Documentum--$17.00; +1.00; optionable): Software
http://biz.yahoo.com/p/d/dctm.html
STATUS: Reversed and was back over the 50 day MVA (16.72), running all the way up to its 18 day MVA on the high of 17.90, but dropping back down to close just above the lower support. Volume was higher and strong at 1.3 million (avg. 642,000). The move puts the stock just over the recent short term down trendline. We will have to see if it holds above that support; if not, we will look at it again for the potential downside play.
http://www.investmenthouse.com/ct/dctm.html
MANH (Manhattan Assoc--$27.44; +0.03; optionable): Software
http://biz.yahoo.com/p/m/manh.html
STATUS: After Friday's drop to the 200 day MVA on strong volume, MANH held just above the support with a doji, volume dropping back below average (494,100; avg. 564,000). It tapped the 50 day MVA on the high (29.39) so in still in position to fall below the current support. Keeping current buy point.
BUY POINT: 26.90 on continued rising volume.
POSITION: January $35 puts to buy (MQR MG).
http://www.investmenthouse.com/ct/manh.html
SPC (Saint Paul Companies--$44.25; -0.75; optionable): Insurance
http://biz.yahoo.com/p/s/spc.html
STATUS: Hit the buy point (below 45) but continued to hold at current support at the 44 range (tested 44.06 on the low). Volume, too, was down though still strong (2.1 million; avg. 1.7 million). SPC fell below the 200 day MVA (45.74) three days ago, and if it drops below 44 from here we can look at adding to positions. Target remains, initially, 40.
BUY POINT: Below 44 on rising volume.
POSITION: January $55 puts to buy (SPC MK).
http://www.investmenthouse.com/ct/spc.html
CONTINUED PLAYS:
TEST OF BREAKOUT:
IBM ($121.34; +0.24; optionable): Computer Hardware
http://biz.yahoo.com/p/i/ibm.html
STATUS: Still testing the breakout from its cup with handle of 7 months (part of a larger 16-month base), in what is likely a handle to the larger base. Volume continued to fall below average to 6.2 million (avg. 9 million) with the stock bouncing slightly from support at the 120 range. IBM looks ready to hang onto this support level for now, until it rallies to a breakout over the December high at 123.21. Upper channel line at 125 (potential resistance). Target: 147.
BUY POINT: Aggressive: 121.60 on rising volume in a rally. Breakout: 123.34 on volume in range of 12 million. Stop: 114.70 (7%).
POSITION: Stock and/or January $115 calls to buy (IBM DC).
http://www.investmenthouse.com/ct/ibm.html
ORLY (O'Reilly Automotive--$37.62; +2.17; optionable): Auto Parts
http://biz.yahoo.com/p/o/orly.html
STATUS: Nice move as the stock broke out above resistance at the previous December high (37.35), volume surging to 1 million (avg. 550,000). The stock broke out of a cup with handle and tested back to the short term MVAs, moving up from the 34 level since last week. Volume did not start to really move until Friday, however. Remains a buy on the breakout after hitting our aggressive buy point at 35.75. Excellent money flow and buying. Target: 41
BUY POINT: A buy to 39.35 on continued strong volume.
POSITION: Stock and/or February $30 or $35 calls to buy (OQR BF or BG).
http://www.investmenthouse.com/ct/orly.html
XLNX (Xilinx--$41.40; +1.32; optionable): Semiconductor
http://biz.yahoo.com/p/x/xlnx.html
STATUS: Tested its recent break over the 200 day MVA (38.50), and move up the last two sessions from that level. However, the moves have been on weak and decreasing volume (5.67 million today; average 9.67 million). XLNX has made it back to its pre-September 11 range, and we will see if it can generate some more strength and make a move over its recent highs and toward the resistance of its April-June highs at 50, which is our target. Very strong money flow, and high relative strength (ahead of price). Target: 50. 50 day MVA is at 36.25.
BUY POINT: Breakout: Over 43.25 on strong volume in a rally (12 million). Stop: 40.22 (7%)
POSITION: Stock and/or March $35 calls to buy (XLQ CG).
http://www.investmenthouse.com/ct/xlnx.html
MOVING AVERAGE BOUNCE PLAYS:
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:
EMLX (Emulex--$37.59; -0.16; optionable): Computer Hardware
http://biz.yahoo.com/p/e/emlx.html
STATUS: EMLX made a nice run, but now has pulled back in a handle to the 7-month cup with handle, showing a second consecutive doji Monday just above its 10 day MVA (36.85). Volume eased a bit, coming in at 9.68 million (average 8.8 million), and EMLX is holding above other potential support from earlier December, at the level of the 10 day. Looking for a move back up and over the December high at 40.81 for the breakout. Strong money flow and relative strength ahead of price. Target: 50
BUY POINT: Aggressive: Over 39 on increased volume. Stop: 36.38 (7%). Breakout: 40.94 on volume of 13 million or higher. Stop: 38.07 (7%)
POSITION: Stock and/or April $35 calls to buy (UMQ DG).
http://www.investmenthouse.com/ct/emlx.html
SERO (Serologicals--$21.27; +0.76; optionable): Biotechnology
http://biz.yahoo.com/p/s/sero.html
STATUS: Monday saw a move up in the handle to its 6.5-month cup base. It cleared the prior closing highs, but volume remained rather low, although up to 197,700 (average 249,300). Still looking for the breakout, but we need to see an infusion of volume. Excellent money flow and buying. Target: 27
BUY POINT: 22.13 on volume of 375,000 or higher. Stop: 20.58 (7%).
POSITION: Stock and/or February $17.50 calls to buy (QEO BW; low open interests).
http://www.investmenthouse.com/ct/sero.html
HD (Home Depot--$50.00; +0.19; optionable): Retail
http://biz.yahoo.com/p/h/hd.html
STATUS: Could not continue Friday's move up in the handle to its 7-month cup-type base, threatening the breakout buy point but closing with a doji as volume dropped back to 7.34 million (average 8.77 million). The buy point represents not only the recent handle high but also potentially tough resistance at the 50 range from June-August levels. Good money flow and relative strength, so we continue to see if the stock can break through. Target: 61
BUY POINT: Breakout: 50.53 on volume of 13 million or higher. Stop: 46.99 (7%)
POSITION: Stock and/or February $45 calls to buy (HD BI).
http://www.investmenthouse.com/ct/hd.html
VRTS (Veritas--$44.30; +0.35; optionable): Software.
http://biz.yahoo.com/p/v/vrts.html
STATUS: VRTS made a move out of the ascending wedge-type handle (to its 4-month cup, buy point 44.11) but the 200 day MVA halted the move and the stock has shown several loose dojis as it flirts with its former buy point. Volume has decreased the last several sessions as it holds, today at 8.9 million (average 15.7 million). We are looking for VRTS to hold support at the 10 day MVA (42.63; low today 43.04) as it squeezes in with the 200 day MVA (46.77), and we are looking for a move over that resistance. Target: 56
BUY POINT: Over the 200 day on above average volume. Stop: 43.50 (7%)
POSITION: Stock and/or February $40 calls to buy (VIV BH).
http://www.investmenthouse.com/ct/vrts.html
CHKP (Check Point Software Tech--$43.30; +2.49; optionable): Security Software
http://biz.yahoo.com/p/c/chkp.html
STATUS: Moved back up in the rally from support at the 18 day MVA (40.25) in its ascending wedge-type pattern, which is functioning as a handle to the stock's 4.5-month cup with handle pattern. Not the best handle, and volume, though up, was not spectacular at 8.74 million (average 10.1 million), but we will see if it can generate some more strength on a breakout move. The handle high is 43.95 and the 200 day MVA is just above at 44.96. Target: 53
BUY POINT: Aggressive breakout: 44.08 on volume of 13.5 million or higher. Stop: 41 (7%). Over the 200 day MVA: 45.25 on similar volume. Stop: 42.08 (7%)
POSITION: Stock and/or April $40 calls to buy (KEQ BH).
http://www.investmenthouse.com/ct/chkp.html
KLAC (Kla-Tencor--$55.50; +2.65; optionable): Semiconductor
http://biz.yahoo.com/p/k/klac.html
STATUS: Recovered today from a fall back in the handle to its 17-week cup. Volume was not outstanding on the bounce (down to 8.84 million; average 9.9 million), which took the stock back up from the support of its 18 day MVA (52.75) and its up trendline connecting October lows. It now stands just below the handle highs (57.60), with its down trendline connecting September and May-August highs. Target on a breakout: 70
BUY POINT: Breakout: 57.73 on volume of 14.7 million or better. Stop: 53.69 (7%).
POSITION: Stock and/or March $45 (KCQ CI) calls to buy.
http://www.investmenthouse.com/ct/klac.html
BRCD (Brocade--$35.03; -1.78; optionable): Computer Peripherals
http://biz.yahoo.com/p/b/brcd.html
STATUS: Continued back today. Volume was up on the selling, but came in just below average (18 million; average 18.2 million), and BRCD held the next layer of support we were looking at, the 18 day MVA (34.99). Not a great move when the market is rallying, but BRCD made a heckuva run on its recent move from the 18 day (then 30) that took it back over the 200 day (31.61). Looking for the stock to hold here; if it cannot the next level of support are former highs at 34, then the 200 day. If it can hold here, we are looking for more volume on a move back toward the recent high at 40.23.
BUY POINT: Aggressive: Over the 10 day MVA at 36.42, with increased volume. Stop: 33.87 (7%)
POSITION: Stock and/or April $30 calls to buy (UBF DF).
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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stock recommendation
stock market today
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