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us stock market, stock watch
Begin Part 2 of 2
Weekly Economic Calendar (All times Eastern). The figures are the consensus expectations, not ours.
12-27-01
Jobless claims (8:30): 400K expected versus 384K prior.
12-28-01
Durable goods orders, November (8:30): -5.5% expected versus +12.8% prior.
Consumer confidence, December (10:00): 83.0 expected versus 82.2 prior.
Chicago PMI, December (10:00): 45.0 expected versus 41.1 prior
Existing home sales, November (10:00): 5.17M expected versus 5.17M prior.
New home sales, November (10:00): 895K expected versus 880K prior.
THE PLAYS: DIAN hit our aggressive buy point (57.20) on a strong move back up after testing the recent strong breakout (new all-time closing high). Has the December high ahead at 60, but with the strong volume Friday, a follow-through on higher numbers can break the stock to another new high. BORL gave a head fake Wednesday when it bounced from the 18 day MVA; next session the stock was below that, though held with a doji Friday. Those still holding the call options eked out some more gains on the covered call play. Covered recently: PRSE was up over the down trendline again in the handle to its double bottom, on strong volume (see the 12-18 report).
Best Plays:
1) ETM: Ready to head higher in the handle.
2) AZPN: Poised for a breakout.
3) CREE: Moving up after testing the breakout.
4) LTD: Getting ready to break out of the pennant.
5) COHU: Strong volume on a move up in the handle.
6) SERO: Another nice handle move.
7) HD: Nice volume and break of resistance.
8) BRCD: At support after a nice pullback.
9) SPC: Heading lower (put).
10) PPG: Ready to break out of a bearish pattern.
NEW PLAYS:
ETM (Entercom--$47.38; +1.53; optionable): Media
http://biz.yahoo.com/p/e/etm.html
STATUS: Making a move up on good volume in the handle of a cup base of 6 months. Volume was sharply higher at 466,000 (avg. 234,000) with the stock heading up from the 18 day MVA (46). ETM has trended up nicely from the September lows (near 30), peaking near the top of the right side of the base at 50, then commencing the handle pullback. Highs at the start of the current base are near 53. Showing good money flow and buying. Target:
BUY POINT: Aggressive: 47.70 on continued rising volume. Stop: 44.36 (7%). Breakout: 50.13 on continued strong volume (minimum breakout volume is 351,000).
POSITION: Stock and/or March $45 calls to buy (ETM CI).
http://www.investmenthouse.com/ct/etm.html
CEPH (Cephalon--$74.75; +2.79; optionable): Drug
http://biz.yahoo.com/p/c/ceph.html
STATUS: Breaking out of a 6-month cup with handle (with the choppy action, looks almost more like a reverse head and shoulders) on strong volume (5.3 million; avg. 1.5 million), buy point 73.82. The pattern is inside an 18-month base. CEPH moved up in the handle for just over a week with volume somewhat erratic as it built through the week, but the spike Friday was strong and we look for a continuing breakout. Now after such a strong move off the 50 day MVA to this point (about $10), we may see it test back toward 72 to 73 (the breakout and high on the left side of the base) before it starts back up. Money flow is up sharply and relative strength breaking out with price. Target: 90
BUY POINT: 75 on continued strong volume. Remains a buy on the breakout up to 77.51. Stop: 69.75 (7%)
POSITION: Stock and/or February $70 calls to buy (CQE BN). Deltas unavailable.
http://www.investmenthouse.com/ct/ceph.html
NMTC (Numerical Tech--$33.25; +0.37; optionable): Software
http://biz.yahoo.com/p/n/nmtc.html
STATUS: Testing the recent breakout from a large, ascending wedge-type pattern that formed since January. On overall decreasing but volatile volume, NMTC last week tested the 18 day MVA three times in the pullback, tapping back down to that support again Friday on low volume (415,500; avg. 537,000). Showing its third consecutive doji as it holds closing prices above the 10 day MVA (32.75), the stock is getting ready for another move up. NMTC is in an 18-month base, but the recent breakout was off a nice run up from 15 (near the September and October lows). Excellent money flow and buying. Target: 43
BUY POINT: Aggressive: 34.06. Clear resistance: 35.83 on volume of 806,000 or higher. Stop: 33.32 (7%).
POSITION: Stock and/or April $35 calls to buy (QEK DF).
http://www.investmenthouse.com/ct/nmtc.html
Some smaller stocks:
OO (Oakley--$16.70; -0.06; optionable): Sporting Goods (sunglasses)
http://biz.yahoo.com/p/o/oo.html
STATUS: In a test of a recent strong breakout over its 200 day MVA (16.81), and over the last several days pulling back on steadily decreasing volume in just the manner we like to see. Showing a tight doji Friday with volume at a low 208,600 (avg. 478,000), OO just slipped below the 200 day Friday, and may continue to a test of the 10 day MVA at 16.19 before making its move up. Buying looks super, and money flow is rising. Target: 20
BUY POINT: 16.90 on rising volume. Stop: 15.72 (7%). From the 10 day MVA, aggressive positions at 16.35 on rising volume.
POSITION: Stock and/or February $15 calls to buy (OO BC). Delta unavailable.
http://www.investmenthouse.com/ct/oo.html
AZPN (Aspen Tech--$16.58; +0.61; optionable): Software
http://biz.yahoo.com/p/a/azpn.html
STATUS: The pattern is below the 200 day MVA and the stock is still in a downtrend from the mid-2000 highs, but the ascending wedge looks good and we like Friday's volume spike (1.4 million; avg. 369,000). With that, AZPN made it over the November high at 16.49 on the move up from support at its 10 day MVA. AZPN is in quite a long base but is off this year's lows (near 8) and with the current action looks ready to try for a breakout over the 200 day MVA (resistance ahead at the 17.72 range). Looking for a move up to 20. Money flow and buying looking better.
BUY POINT: Aggressive breakout: 17.18 on continued strong volume. Stop: 15.98 (7%). Breakout over the 200 day MVA: 17.75 on continued strong volume. Stop: 16.51 (7%)
POSITION: Stock and/or February $15 calls to buy (ZQP BC)
http://www.investmenthouse.com/ct/azpn.html
Back On:
CREE (Cree Inc--$29.69; +2.38; optionable): Semiconductor
http://biz.yahoo.com/p/c/cree.html
STATUS: Off the lows in its 22-month base, CREE made a nice move up Friday with volume shooting sky-high (10.4 million; avg. 1.5 million); news was that an infringement suit filed against the company was dismissed. CREE broke out of a cup with handle earlier in the month, and tested back to the 10 day MVA (27.21) Thursday, setting up this move. It just beat the breakout high at 29.20. Looking at a target at 34. Money flow is at very high levels, and buying is up sharply.
BUY POINT: 30.06 on continued strong volume. Stop: 27.67 (7%)
POSITION: Stock and/or March $25 calls to buy (CQR CE).
http://www.investmenthouse.com/ct/cree.html
LTD (The Limited--$14.48; +0.48; optionable): Retail
http://biz.yahoo.com/p/l/ltd.html
STATUS: Made a solid move up in the pennant pattern (5 weeks), actually moving over resistance at the 200 day MVA (14.69) but pulling back down below that resistance to close. The move was on sharply higher volume (2.6 million; avg. 1.9 million) and helped by an upgrade from Merrill Lynch. Our old buy point was 14.97 but since the MVA is lower, we are taking that down a few cents. Money flow strong and buying looks decent. Target: 18
BUY POINT: 14.82 on volume of 2.5 million or higher (reached Friday). Stop: 13.78 (7%)
POSITION: Stock and/or February $12.50 calls to buy (LTD BV).
http://www.investmenthouse.com/ct/ltd.html
CONTINUED PLAYS: AUDC looks good in the ascending wedge as it holds the 18 day MVA on very low volume (12-18).
COHU (Cohu Inc--$19.93; +1.04; optionable): Semiconductor
http://biz.yahoo.com/p/c/cohu.html
STATUS: A nice move up from the 200 day MVA (18.76) as volume exploded to 316,200 (avg. 69,000); there was no news to explain the volume. That is good; that means when the stock tested that key support level, institutions came in and bought it hard. COHU made it over the 18 day MVA (not to mention the 50 day MVA just above the 200 day) from the base of its handle (6-month cup). We are looking for a breakout and will consider taking aggressive positions from here on continued positive action. Excellent money flow and buying. Target: 26
BUY POINT: Aggressive: 20.25 on continued strong volume. Stop: 18.83 (7%). Breakout: 22.06 on volume of 104,000 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
SERO (Serologicals--$21.50; +1.38; optionable): Biotechnology
http://biz.yahoo.com/p/s/sero.html
STATUS: Made a good move up from the base of its handle at the 18 day MVA (cup base is 6-months in length). Volume was up to 170,300, still below the average of 245,181 but up nicely anyway. Looking for the breakout over December's high (22). Strong money flow, good 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--$51.50; +1.19; optionable): Retail
http://biz.yahoo.com/p/h/hd.html
STATUS: HD made a move up in its 7-month base (previous high near 54 and part of a 2-year base) Friday, breaking resistance at the June high (51.45). The stock tested support at 50 on the low (10 day MVA), then bounced nicely as volume was sharply higher and above average at 11 million (avg. 8.1 million). The stock closed right at its intraday high, so we are looking for a continued move up, watching the 54 range for potential resistance. It is near that level that HD may pull back again, but on a continued strong move here, the stock can break out of the base. Money flow and buying looking good. Target: 61
BUY POINT: 52.06 on continued rising volume. Stop: 47.94 (7%)
POSITION: Stock and/or February $45 calls to buy (HD BI).
http://www.investmenthouse.com/ct/hd.html
EMLX (Emulex--$39.59; +0.95; optionable): Computer Hardware
http://biz.yahoo.com/p/e/emlx.html
STATUS: Ended up on the Thursday selling just above the 18 day MVA (36.12), found support near that level and bounced Friday, up in the handle to its 7-month cup pattern. The stock looks ready to make a solid move back up once a rally ensues (that is, on a hold of support and on rising and not falling, volume). We can look at taking positions on a move up from the 10 day MVA if EMLX pulls back down in the handle, or on a stronger move up from here in a rally. Money flow is high. Target: 50
BUY POINT: Pullback to the 10 day MVA (37.79), aggressive: 38.50 on rising volume. Stop: 35.81 (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). Deltas unavailable at the time of this writing.
http://www.investmenthouse.com/ct/emlx.html
BRCD (Brocade--$32.65; +1.05; optionable): Computer Periperals
http://biz.yahoo.com/p/b/brcd.html
STATUS: BRCD has been falling (and selling though not heavily) back from its December closing high at 39.98, the last three days dropping back to support at the 50 day and 200 day MVAs (31.25 and 31.52 respectively). On the pullback volume has been increasingly lower, down Friday to 12.6 million (avg. 19 million). Showing a doji on a little bounce from the support, BRCD is also holding above the strong-looking price support in the sideways movement of November. It is from that support that BRCD made its recent run, and that is what we are looking for here. May take more than a day or two to get things going, but from here we can look at a potential move up to the 39 range for an initial target (the 200 day MVA, EMA).
BUY POINT: Aggressive: 33.10 (over the November closing high) on rising volume in a tech rally. Stop: 30.78 (7%)
POSITION: Stock and/or April $25 or $30 calls to buy (UBF DE or DF).
http://www.investmenthouse.com/ct/brcd.html
Puts: MANH moved back over the 50 day MVA on a strong rise in volume (no news). It closed at the 18 day MVA.
Continued:
CLS (Celestica--$38.69; -3.86; optionable): Hardware
http://biz.yahoo.com/p/c/cls.html
STATUS: The group overall is performing well, so this one gives us a bit of caution. Still, it broke the 50 day MVA (40.83) and the 200 day MVA as well Thursday on strong volume, then as volume dropped back Friday it bounced slightly but did not move back over the moving averages (volume was down to 3.7 million; avg. 2.6 million). If CLS cannot move back over the resistance and moves below Thursday's low, look for the move down to the 34 range (initial target).
BUY POINT: 38.50 on continued rising volume in market selling.
POSITION: January $50 puts to buy (CLS MJ).
http://www.investmenthouse.com/ct/cls.html
LLTC (Linear Tech--$40.19; +0.75; optionable): Semiconductor
http://biz.yahoo.com/p/l/lltc.html
STATUS: Moved up after breaking the 50 day MVA Thursday, tapping near Thursday's closing price on the low and bouncing. Volume was lower at 6.4 million (avg. 5.9 million). We will continue to look for a move down on a failure to break back over the resistance. Keeping our initial buy point. Target: 35
BUY POINT: 39.30 on continued strong volume.
POSITION: January $50 puts to buy (LLQ MJ).
http://www.investmenthouse.com/ct/lltc.html
SPC (Saint Paul Companies--$43.52; -0.93; optionable): Insurance
http://biz.yahoo.com/p/s/spc.html
STATUS: SPC made the move below 44 on rising volume of 1.8 million; avg. 1.7 million). It still has the December low at 43.15 that could hold it up but on the strong volume Friday the stock looks ready to make the move down to our initial target at 40. Still can get into positions here. 42 may emerge as some support so we will watch that level on the way down.
BUY POINT: Aggressive: 43.30 (below the intraday low at 43.35) on continued rising volume.
POSITION: January $55 puts to buy (SPC MK).
http://www.investmenthouse.com/ct/spc.html
New:
PPG (Ppg Industries--$50.58; -1.22; optionable): Conglomerates
http://biz.yahoo.com/p/p/ppg.html
STATUS: In a bearish head and shoulders pattern and just above the neckline where it closed Friday at the 200 day MVA (EMA). Volume was up sharply and strong at 926,700 (avg. 685,000). On a move below the neckline at 50, PPG can drop to the 46 range for an initial target. Below that, the September lows near 40. First shoulder in the pattern formed in early November, and PPG is moving down the right side of the second shoulder now.
BUY POINT: 49.80 on continued rising volume.
POSITION: January $60 puts to buy (PPG ML).
http://www.investmenthouse.com/ct/ppg.html
ITG (Investment Tech--$38.78; -0.46; optionable): Brokerage
http://biz.yahoo.com/p/i/itg.html
STATUS: Has formed a kind of head and shoulders pattern, peaking this month at 42.29 and now moving down the right side of the right hump (the initial hump is in the first week of the month). ITG just moved below the neck of the pattern (at 39) with volume sharply up to 434,100 (avg. 288,000). The stock had dropped to its up trendline at 38 (connects the September and November lows) and bounced, but if it cannot move back over 39 can make a drop to 36 (200 day MVA) with ease; perhaps 32 at the September lows, on heavy selling.
BUY POINT: 38.45 on continued rising volume. Stop: 35.34 (7%)
POSITION: January $43.38 puts to buy (ITZ MVV).
http://www.investmenthouse.com/ct/itg.html
VZ (Verizon--$47.15; -1.12; optionable): Telecom
http://biz.yahoo.com/p/v/vz.html
STATUS: Formed a double top and after opening at the level of the tops Friday, VZ tumbled, with volume rising and strong at 8.1 million (avg. 5.7 million). The stock closed just above the November and December lows, but looks ready to head below that judging from the strength of the move. No news that would cause such a drop; coverage was initiated on the stock Friday morning ("market perform"). Target: 42
BUY POINT: Aggressive: 46.90 on continued strong volume.
POSITION: January $55 or $50 puts to buy (VZ MK or MJ). Deltas unavailable.
http://www.investmenthouse.com/ct/vz.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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