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Begin part 3 of 3
THE PLAYS
Good movers: DRIV; EQIX; JEF; PTEN
Strong plays:
1) GIGM: Could be a very fun play.
2) PJC: Volume is up as PJC bounces from support.
3) PRXL: Bouncing off the 18 day EMA.
4) WEBX: Strong volume as it starts higher
5) WOOF: Excellent test, crouching for the rebound
6) SIMG: Volume remains strong as it readies for the breakout
7) JTX: Stalling at the 50 day MA.
NEW PLAYS:
Upside plays:
Play Date: 09/11/2006
GIGM (Gigamedia--$11.02; +0.68; optionable): Internet software, online games portal
http://biz.yahoo.com/p/g/gigm.html
STATUS: Breakout test. This looks like a fun play. A bit more speculative, but a nice pattern and showing excellent strength. GIGM broke higher Thursday from a 16 week cup with handle base, surging on strong volume. It faded Friday but then came right back Monday on lower but still strong, above average volume. Strong 5 to 2 accumulation in the base shows strong buying, setting the foundation for the breakout and run higher. Looking for a continued move here to step into positions.
Volume: 2.484M Avg Volume: 1.241M
BUY POINT: $11.21 Volume=1.5M Target=$13.48 Stop=$10.43
POSITION: GBU AB - Jan. $10c (66 delta) &/or Stock
http://www.investmenthouse.com/ct/gigm.html
Play Date: 09/11/2006
PJC (Piper Jaffray--$59.98; +1.23; optionable): Asset management
http://biz.yahoo.com/p/p/pjc.html
STATUS: Reverse head and shoulders. PJC is working on a 5 month base, coming off the lows in August, stair-stepping higher, one resistance level at a time. It broke above the 50 day EMA (55.66) in August, consolidated, then ran higher to end the month. I is now consolidating again, coming back to the 90 day MA (58.14) and then bouncing Monday on stronger, above average volume. Looking for it to continue this move to step into the play.
Volume: 328.4K Avg Volume: 291.754K
BUY POINT: $60.45 Volume=438K Target=$71.90 Stop=$58.00
POSITION: PJC LL - Dec. $60c (55 delta) &/or Stock
http://www.investmenthouse.com/ct/pjc.html
Play Date: 09/11/2006
PRXL (Parexel Intl.--$33.00; +0.26; optionable): Clinical research, medical marketing, etc. to the pharmaceutical, biotech, medical device industries
http://biz.yahoo.com/p/p/prxl.html
STATUS: Test 18 day EMA. PRXL is making its second test of the 18 day EMA (32.46) following its mid-August breakout from its 14 week reverse head and shoulders base. A strong stock will make four or five such bounces off the near support (typically the 10 or 18 day EMA) after a breakout. This gives PRXL plenty of room still to run on this breakout.
Volume: 239.593K Avg Volume: 255.684K
BUY POINT: $33.33 Volume=260K Target=$38.00 Stop=$32.28
POSITION: VBQ LF - Dec. $30c (68 delta) &/or Stock
http://www.investmenthouse.com/ct/prxl.html
Play Date: 09/11/2006
UARM (Under Armour--$36.05; +2.57; optionable): Sports clothing
http://biz.yahoo.com/p/u/uarm.html
STATUS: Double bottom. UARM keeps collecting contracts with sporting organizations, and on Monday it received an upgrade that broke it higher from the second leg of its 7 week double bottom base. Strong volume Monday as it broke higher and managed to close just through the 50 day EMA (35.99). We are looking to initiate some positions as it continues higher and then see if it forms a handle. A stock that rallied well through June and then needed a breather to form its third base of its relatively short life (a new issue in November 2005). Nice base is setting it up for this break higher.
Volume: 1.566M Avg Volume: 931.249K
BUY POINT: $36.32 Volume=1M Target=$41.88 Stop=$34.38
POSITION: UMG AG - Jan. $35c (60 delta) &/or Stock
http://www.investmenthouse.com/ct/uarm.html
Play Date: 09/11/2006
WEBX (Webex Communications--$36.88; +0.44; optionable): Web communications services
http://biz.yahoo.com/p/w/webx.html
STATUS: Test breakout. Taking another look at WEBX as it comes off a test of the mid-August breakout from a 14 week ascending base. Strong breakout on strong volume and now a good test on lower, below average volume. Monday WEBX jumped higher on a shot of rising, above average volume. Money flow is moving higher ahead of price. Strong 5 to 2 accumulation (5 up price weeks on rising volume to 2 down price weeks on rising volume) show solid buying in the base. Looks ripe to break higher once more to a 5.5 year high.
Volume: 649.663K Avg Volume: 637.972K
BUY POINT: $37.08 Volume=600K Target=$42.50 Stop=$35.65
POSITION: UWB LG - Dec. $35c (65 delta) &/or Stock
http://www.investmenthouse.com/ct/webx.html
Play Date: 09/11/2006
WOOF (VCA Antech--$35.10; +0.07; optionable): Veterinary centers
http://biz.yahoo.com/p/w/woof.html
STATUS: Test breakout. WOOF has faded to the 18 day EMA (34.91) the past two weeks, now trading in a very tight range on low volume over that level, ready to break higher once more. This follows the late July breakout from a 10 week base and the subsequent short but sweet 5 week base that is now being tested. Market leader with strong fundamentals to go with the pattern. Ready to move in on the next break higher on strong volume.
Volume: 178.002K Avg Volume: 382.148K
BUY POINT: $35.55 Volume=400K Target=$40.95 Stop=$34.48
POSITION: QWF AG - Jan. $35c (55 delta) &/or Stock
http://www.investmenthouse.com/ct/woof.html
CONTINUING PLAYS:
Upside:
Play Date: 09/09/2006
BIDU (Baidu.com--$79.89; -0.05; optionable): Chinese interactive internet
http://biz.yahoo.com/p/b/bidu.html
STATUS: Test 50 day EMA. Still set to break higher, pausing Monday on low volume. To recap: BIDU gapped lower in late July from a 10 week rising base. It sold to the 200 day SMA (68.54) in early August, then rebuilt to 80, moving laterally the past three weeks between 77 and 80 where the 50 day EMA (78.19) 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: 1.189M 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: 08/22/2006
COHR (Coherent--$36.25; +0.26; optionable): Scientific and technical instruments
http://biz.yahoo.com/p/c/cohr.html
STATUS: Double bottom w/handle. Still set up nicely for the breakout, testing the 18 day EMA (35.64) on the low and rebounding. Just needs that volume as it makes its move. 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: 147.735K Avg Volume: 246.674K
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: 09/09/2006
SIMG (Silicon Image--$12.01; +0.33; optionable): Semiconductors
http://biz.yahoo.com/p/s/simg.html
STATUS: Cup w/handle. Volume moved back above average Monday as SIMG reached higher, moving toward the breakout point. Solid and looks good; just needs to show us the break higher. To recap: 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: 1.187M 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
Play Date: 09/06/2006
WTSLA (Wet Seal--$5.65; +0.03; optionable): Teen apparel stores
http://biz.yahoo.com/p/w/wtsla.html
STATUS: Cup w/handle. Nice low volume as WTSLA continues forming the handle, tapping the 10 day EMA (5.50) on the low and rebounding to close flat. Excellent set up for the breakout. Now show us. 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: 332.427K Avg Volume: 650.846K
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: 09/09/2006
JTX (Jackson Hewitt--$33.49; +0.15; optionable): Tax services
http://biz.yahoo.com/p/j/jtx.html
STATUS: Put. Reached a bit higher Monday, tapping the 50 day SMA (33.77) on the high and then fading to close right at the 50 day EMA. Another reach higher, another tap higher, another slide back on below average volume. Looking for it to fail in this range for the downside play. To recap: 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 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: 327K Avg Volume: 380.302K
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: 09/07/2006
RDEN (Elizabeth Arden--$14.75; -0.05; optionable): Make-up
http://biz.yahoo.com/p/r/rden.html
STATUS: Put. A doji Monday as RDEN reached above the 18 day EMA (14.91) and then faded back to close right on top of the 10 day EMA (14.70). Need to see the move lower on volume from here to continue the downtrend. To recap: RDEN formed a broad top February through April and then tumbled through the 200 day SMA (now at 20). It has traded lower and lower down 18 day EMA, rebounding the past week during the third leg of the rally to once more hit the 18 day. It turned over and started lower, breaking below the 10 day EMA Thursday. Looking to move in on continued selling and riding it to the target on this next leg lower. A move to the target lands us a 54%ish gain.
Volume: 489.949K Avg Volume: 192.563K
BUY POINT: $14.38 Volume=185K Target=$13.30 Stop=$14.69
POSITION: UWO VC - Oct. $15p (-60 delta)
http://www.investmenthouse.com/ct/rden.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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