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Begin part 3 of 3
THE PLAYS
Good movers: BITS; BRCM; CWTR; DRIV; KNOT; SMSC; SMSI; UTSI
Strong plays:
1) AQNT: Solid volume as AQNT breaks higher.
2) EXPD: Nice price break higher; looking for some more volume.
3) LIFC: Moving toward the breakout to a new high from its ascending base.
4) FFIV: Nice test setting up the breakout.
5) ISE: Also setting up the nice handle for the break higher.
NEW PLAYS:
Upside plays:
Play Date: 10/16/2006
AQNT (Aquantive--$26.83; +1.16; optionable): Digital marketing services
http://biz.yahoo.com/p/a/aqnt.html
STATUS: Cup. AQNT is working through a 10 month cup base. It broke up through the 200 day SMA (24.65) to start the month, tested the 200 day last week, and then surged higher Monday, rallying up the right side of the pattern. Money flow is surging higher ahead of price and now price is starting to follow. Ready to move in as it continues toward a 6 year high.
Volume: 1.829M Avg Volume: 1.299M
BUY POINT: $27.05 Volume=1.4M Target=$32.48 Stop=$25.24
POSITION: QBT CE - Mar. $25c (68 delta) &/or Stock
http://www.investmenthouse.com/ct/aqnt.html
Play Date: 10/16/2006
EXPD (Expeditors Intl.--$48.40; +1.46; optionable): Air delivery & freight
http://biz.yahoo.com/p/e/expd.html
STATUS: Double bottom w/handle. Big winner through June, and it needed a rest. It fell into this 3.5 month base, bottoming in August and early September. It rallied then worked laterally into the first two weeks of October, setting up the breakout. Monday it started higher on rising, average trade. Want to see more volume as it continues this move higher and runs toward its prior high near 59.
Volume: 1.611M Avg Volume: 1.801M
BUY POINT: $48.65 Volume=2.4M Target=$57.45 Stop=$45.98
POSITION: URP BW - Feb. $47.50c (61 delta) &/or Stock
http://www.investmenthouse.com/ct/expd.html
Play Date: 10/16/2006
FORM (Formfactor--$44.94; +1.46; optionable): Semiconductors
http://biz.yahoo.com/p/f/form.html
STATUS: Ascending base. FORM held support at 40 to end September and early October, then bounced higher and has formed a lateral consolidation this month along the 90 day MA (42.73). Want to see a strong move above 45, showing some strong volume, to give us the buy point on this leader in the semiconductor sector.
Volume: 1.016M Avg Volume: 1.109M
BUY POINT: $45.45 Volume=1.7M Target=$53.48 Stop=$42.65
POSITION: AFU AI - Jan. $45c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/form.html
Play Date: 10/16/2006
LIFC (Lifecell--$31.67; +0.61; optionable): Biotechnology
http://biz.yahoo.com/p/l/lifc.html
STATUS: Ascending base. Working through a very nice 3.5 month base, making higher and higher lows up the 50 day EMA and 90 day MA (30.13, 29.12) as it bangs its head against a top at 32. Excellent 4 to 1 accumulation in the base shows mostly buying as it heads toward the breakout to a new all-time high. Strong leader ready to make its next run.
Volume: 578.425K Avg Volume: 736.72K
BUY POINT: $32.25 Volume=1.1M Target=$38.75 Stop=$29.98
POSITION: QKL CZ - Mar. $32.50c (55 delta) &/or Stock
http://www.investmenthouse.com/ct/lifc.html
CONTINUING PLAYS:
Upside:
Play Date: 10/09/2006
CHRS (Charming Shoppes--$14.97; +0.19; optionable): Apparel stores
http://biz.yahoo.com/p/c/chrs.html
STATUS: Cup w/handle. Price rallied Monday, but volume did not as CHRS probed the breakout from its base. It will need more trade to make a convincing breakout we can buy into. To recap: Excellent 6 to 2 accumulation (6 up price weeks on rising volume to 2 down price weeks on rising volume) shows the kind of buying that propels strong breakouts and subsequent runs. Nice run to this point but it has taken a rest and is now ready for more. Just waiting for this low volume test to complete the shakeout and deliver the next upside break.
Volume: 762.733K Avg Volume: 1.72M
BUY POINT: $15.21 Volume=2.8M Target=$18.25 Stop=$14.22
POSITION: QSR AC - Jan. $15c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/chrs.html
Play Date: 10/13/2006
FFIV (F5 Networks--$58.02; -0.05; optionable): Internet traffic management
http://biz.yahoo.com/p/f/ffiv.html
EARNINGS: 10-25-06
STATUS: Double bottom w/handle. Another nice test over the 10 day EMA (57.31), setting up a nice break higher. To recap: Big winner in the second half of 2005 and Q1 2006, FFIV ran out of gas and needed a new base. It fell into the current 6.5 month base. Last week it broke through the 200 day SMA (56.14) as it cleared the 'hump' in the middle of the pattern. It rallied to 60 through Thursday and Friday it fell on some rising, slightly above average volume. A bit of distribution, but looking for a test this week down to the 10 day EMA or perhaps the 200 day. Then we pick it up as it rebounds. Looks like this 2005 leader is back.
Volume: 1.035M Avg Volume: 991.644K
BUY POINT: From the Monday close: $60.15. Test the 10 day EMA or the 200 day SMA: 57.75. Volume=1.5M Target=$71.95 Stop=$56.95
POSITION: FLK AL - Jan. $60c (51 delta) &/or Stock
http://www.investmenthouse.com/ct/ffiv.html
Play Date: 10/14/2006
ISE (International Securities Exchange--$48.65; -0.34; optionable): Equity and index option exchange
http://biz.yahoo.com/p/i/ise.html
EARNINGS: 10-25-06 before the open
STATUS: Cup w/handle. Still working on the handle with a low volume fade to close at the 10 day EMA (48.41) on Monday. Just waiting for the break higher. To recap: Sweet pattern is forming, setting up a test of the 10 day EMA the past week, forming another handle to the 7 month base. Nice all the way around, using the 200 day SMA as support at the bottom of the base and then rallying up the 18 day EMA (47.55) to form the right side of the base. Nice low volume handle the past week is the calm before the storm. Looking for volume to kick back up as ISE breaks through the top of the handle.
Volume: 447.5K Avg Volume: 556.417K
BUY POINT: $50.21 Volume=833K Target=$57.95 Stop=$47.38
POSITION: ISE AJ - Jan. $50c (51 delta) &/or Stock
http://www.investmenthouse.com/ct/ise.html
Play Date: 10/12/2006
NTRI (Nutrisystem--$65.00; -0.23; optionable): Weight loss programs. Wildcard but could announce with earnings.
BACKGROUND: No splits in NTRI's history.
http://biz.yahoo.com/p/n/ntri.html
Earnings: 10-24-06
STATUS: Double bottom w/handle. Still working laterally over the 10 day EMA (64.06), setting up the next move higher. To recap: Gapped higher last Tuesday, trying the breakout from its 5.5 month base. It faded back, but managed to hold the 10 day EMA on the Thursday intraday low and rebounded for a modest gain. This one made us some solid money in its Q1, and now it has set back up to make us some more money. Solid 7 to 4 accumulation in the pattern shows net buying, setting it up for the breakout and run higher.
Volume: 575.325K Avg Volume: 1.925M
BUY POINT: $66.72 Volume=2.9M Target=$79.95 Stop=$63.38
POSITION: NSI AN - Jan. $70c (45 delta) &/or Stock
http://www.investmenthouse.com/ct/ntri.html
Play Date: 10/14/2006
ZUMZ (Zumiez--$32.24; -0.46; optionable): Apparel stores
http://biz.yahoo.com/p/z/zumz.html
STATUS: Gapped higher but no volume Monday and ZUMZ faded back from the Friday run higher. Will let it make this test and pick it up as it rebounds on strong volume. To recap: Split in April and rallied to early July before falling into the current 3.5 month base. Knifepoint turn at the bottom and a rally back up. Made it to some resistance at 32, tested the 10 day EMA (30.95) last week as it solid back some, and then blasted higher again Friday. Looking to move into some positions as it continues this move on stronger volume.
Volume: 322.239K Avg Volume: 615.229K
BUY POINT: $33.32 Volume=923K Target=$39.95 Stop=$31.78
POSITION: QUY BF - Feb. $30c (65 delta) &/or Stock
http://www.investmenthouse.com/ct/zumz.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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