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Begin part 3 of 3
THE PLAYS
Strong plays:
1) GME: Sweet test of the breakout.
2) HMSY: Volume is up as HMSY heads toward the breakout.
3) LVLT: Nice pullback to test the breakout earlier in the week.
4) CXW: Nice shakeout and rebound on volume.
5) ICE: Nice end to the week.
6) FFIV: Nice doji at the 200 day SMA
NEW PLAYS:
Upside plays:
Play Date: 10/21/2006
AKAM (Akami Technologies--$46.19; -0.10; optionable): Internet content delivery systems
http://biz.yahoo.com/p/a/akam.html
EARNINGS: 10-26-06
STATUS: Test 50 day EMA. Made us some great money on its last move, and when it started to struggle at the 18 day EMA we closed it to let it test. It looks to have done that with a plunge to the 50 day EMA (45.16) Wednesday, and then a nice hold at that level, tapping the 50 day SMA on the Friday low and rebounding to close flat as volume jumped above average. A strong breakout and run in September that needed a rest, and we are looking for a strong price and volume rebound from here to move into new positions and catch AKAM as it makes its next run.
Volume: 6.429M Avg Volume: 4.926M
BUY POINT: $46.72 Volume=7M Target=$55.95 Stop=$44.58
POSITION: UMU BI - Feb. $45c (62 delta) &/or Stock
http://www.investmenthouse.com/ct/akam.html
Play Date: 10/21/2006
EZPW (Ezcorp--$42.81; -1.42; optionable): Pawn shops
http://biz.yahoo.com/p/e/ezpw.html
STATUS: Breakout test. EZPW reported some strong earnings and gapped higher on 10-13, clearing a 14 week base. It rallied near 47 and then started to test last week, coming back to the 10 day EMA (41.80) on the Friday low. Nice test of the breakout, and we are looking for EZPW to hold near this level to start the week, and we will move in as it rebounds higher on some continued solid volume. A market leader in sales and earnings to go with the strong pattern. Easy money? We will see.
Volume: 614.192K Avg Volume: 512.285K
BUY POINT: $43.66 Volume=750K Target=$51.95 Stop=$41.65
POSITION: ULP CI - Mar. $45c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/ezpw.html
Play Date: 10/21/2006
HMSY (HMS Holdings--$13.75; +0.38; no options): Healthcare information systems
http://biz.yahoo.com/p/h/hmsy.html
EARNINGS: Early November
STATUS: Cup w/handle. A sweet little 8 week base has formed as HMSY sets up for a breakout to a 10 year high. Excellent action in the pattern, and money flow is running higher as the stock bases. Has been probing the breakout the past week with some solid intraday surges up near 14.30. Looking for the volume to kick in as HMSY makes the next such move.
Volume: 163.977K Avg Volume: 220.358K
BUY POINT: $14.41 Volume=331K Target=$17.38 Stop=$13.39
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/hmsy.html
Play Date: 10/21/2006
LVLT (Level 3 Communications--$5.83; +0.03; optionable): Telecom
http://biz.yahoo.com/p/l/lvlt.html
EARNINGS: 10-24-06
STATUS: Breakout test. Strong breakout last Tuesday as LVLT announced it is buying BWNG. Investors loved it. Volume surged as LVLT jumped out of a 5.5 month cup with handle base. It faded back to test the rest of the week on lower volume, acting very healthy and setting up its next run. We like to move in after the first test as it shows the initial move was not all fluff, that the big buyers want to get back in even at this higher price and are using a dip to do so. That shows us the stock and the move has staying power. Thus, we are looking for LVLT to hold above the 10 day EMA (5.55) this week and then continue the move higher.
Volume: 42.068M Avg Volume: 32.026M
BUY POINT: $5.98 Volume=44M Target=$7.50 Stop=$5.52
POSITION: QHN CA - Mar. $5c (70 delta) &/or Stock
http://www.investmenthouse.com/ct/lvlt.html
New buy points on current positions:
Play Date: 10/21/2006
GME (Gamestop--$51.25; -0.02; optionable): Electronics stores
http://biz.yahoo.com/p/g/gme.html
EARNINGS: Mid-November
STATUS: Breakout test. GME has stopped playing games and looks ready to move. Strong break higher the second week of October as GME cleared a 6.5 month base on some strong volume. It looks to have overcome the weakness on the Play Station 3 web sales in a big way. Excellent break higher with a very nice, low volume test the past week to the 10 day EMA (50.40), easily holding above that level as it taps it on the lows and bounces back. Strong money flow is moving higher ahead of price, and we expect GME to continue on up, following the money into the holiday season.
Volume: 850.5K Avg Volume: 1.344M
BUY POINT: $52.21 Volume=1.7M Target=$60.45 Stop=$50.22
POSITION: GME AJ - Jan. $50c (56 delta) or GME DK - Apr. $55c (45 delta) &/or Stock
http://www.investmenthouse.com/ct/gme.html
CONTINUING PLAYS:
Upside:
Play Date: 10/16/2006
AQNT (Aquantive--$26.58; +0.16; optionable): Digital marketing services
http://biz.yahoo.com/p/a/aqnt.html
EARNINGS: 11-2-06
STATUS: Cup. Spent last week working laterally as the 10 day EMA (25.98) rose to meet it after that strong blast higher Monday. Very nice test of the move as the market struggled, forming a handle to the base. Now it looks ready to move higher as volume moved up to average Friday as AQNT continued trading in its tight range. AQNT is working through a 10 month cup base. It broke up through the 200 day SMA (24.64) 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: 1.088M Avg Volume: 1.236M
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: 10/18/2006
CXW (Corrections Corp of America--$46.20; +0.86; optionable): Private detention facilities
http://biz.yahoo.com/p/c/cxw.html
EARNINGS: 11-6-06
STATUS: Test 18 day EMA. Reached way down Friday, tapping the September range on the low and then rebounding to a positive close on strong volume. It is ready to make the move. To recap: CXW has made us money before, and it was the subject of a lot of hype the past month. Now, however, it has set up for the next move higher after gapping up two weeks back, coming back to fill the gap while holding the 18 day EMA. Lower volume on the test shows few sellers. Just waiting for the stock to resume the move back up on a strong shot of volume.
Volume: 1.013M Avg Volume: 556.723K
BUY POINT: $46.48 Volume=600K Target=$54.85 Stop=$44.78POSITION: CGY CX - Mar. $43.375c (67 delta) &/or Stock
http://www.investmenthouse.com/ct/cxw.html
Play Date: 10/13/2006
FFIV (F5 Networks--$56.56; -0.29; optionable): Internet traffic management systems
http://biz.yahoo.com/p/f/ffiv.html
EARNINGS: 10-25-06
STATUS: Double bottom w/handle. This remains in excellent position to break higher, again holding the 200 day SMA (56.04) Friday on low, below average volume. Looks to have just about completed the test and ready to move. Just needs to show the breakout move. 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 as it cleared the 'hump' in the middle of the pattern. Has made a great test and now we are ready to pick it up as it rebounds. Looks like this 2005 leader is back. Looks FFine.
Volume: 604.797K Avg Volume: 958.542K
BUY POINT: Has made the test of the break through the 200 day SMA and now ready to rebound: Aggressive 57.25. Breakout: $60.15.
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: 10/19/2006
ICE (Intercontimental Exchange--$81.78; +0.23; optionable): Energy futures, options exchange
http://biz.yahoo.com/p/i/ice.html
EARNINGS: 11-2-06
STATUS: Test breakout. Definitely warming up for the continuation of the breakout move. Finished the week with four tight dojis over the 18 day EMA (80.01) as volume faded. Looking for that to turn into a new break to the upside that continues the breakout move. To recap: ICE fell hard last Monday on strong volume, but then it rebounded Tuesday to hold the 18 day EMA on even stronger trade, and then finished the week holding that support and working laterally. It broke out in mid-September, tested, then rallied to 87. It is making its second test here, and we are looking to move back in as it rebounds from here.
Volume: 1.409M Avg Volume: 1.554M
BUY POINT: $83.22 Volume=2.4M Target=$94.95 Stop=$79.25
POSITION: ICE LP - Dec. $80c (58 delta)
http://www.investmenthouse.com/ct/ice.html
Play Date: 10/07/2006
NIHD (NII Hldgs--$64.60; +0.17; optionable): Digital wireless communications in Latin America
http://biz.yahoo.com/p/n/nihd.html
EARNINGS: 10-26-06 before the open
STATUS: Double bottom w/handle. Nice lateral fade to the 10 day EMA (64.06) last week as NIHD sets up to make the breakout to yet a new all-time high. It gapped sharply higher in late September on news of a big contract. It has held that move and has formed another handle to the base. After this it is ready to break out and move to a new all-time high and toward a new split.
Volume: 1.117M Avg Volume: 1.58M
BUY POINT: $64.55 Volume=2.4M Target=$74.45 Stop=$62.39
POSITION: QHQ AM - Jan. $65c (51 delta) &/or Stock
http://www.investmenthouse.com/ct/nihd.html
Play Date: 10/12/2006
NTRI (Nutrisystem--$65.43; +0.24; optionable): Weight loss programs
http://biz.yahoo.com/p/n/ntri.html
Earnings: 10-24-06
STATUS: Double bottom w/handle. Well, NTRI is in about as flat and tight a lateral move as you can have, and volume is right as well, i.e. very low as NTRI sets up. Just waiting for it to show us the break higher. Can't hang around here too long as it will start to get flabby without running higher. To recap: Gapped higher two weeks back, trying the breakout from its 5.5 month base. It faded back, but managed to hold the 10 day EMA and has moved laterally in a tight range since. 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: 751.597K Avg Volume: 1.896M
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: 10/19/2006
NYX (NYSE Group--$73.25; +0.28; optionable)
http://biz.yahoo.com/p/n/nyx.html
EARNINGS: 10-26-06 before the open
STATUS: Cup w/handle. Nice hammer doji on the 18 day EMA (73.12) Friday to end the week as NYX continues to set up for the breakout. Volume edged back above average as it held this level, indicating it is getting ready to move. To recap: NYX has come back to the 18 day EMA the past two weeks, forming the handle to its 8 month base formed using the roughly the 200 day SMA (65.28) as support. This base is setting NYX up for a breakout to a new all-time high. Money flow is strong leading the way higher, complementing solid accumulation. Looking for volume to jump as it rebounds.
Volume: 1.911M Avg Volume: 1.605M
BUY POINT: $75.55 Volume=2.4M Target=$86.95 Stop=$72.95
POSITION: NYX AO - Jan. $65c (50 delta) &/or Stock
http://www.investmenthouse.com/ct/nyx.html
Play Date: 10/18/2006
SMSI (Smith Micro Software--$16.37; +0.24; optionable): Software
http://biz.yahoo.com/p/s/smsi.html
EARNINGS: 11-1-06
STATUS: Flying plateau. Got a bit wild Thursday, testing down below the 18 day EMA (15.75) intraday and then rebounding nicely. Friday it tested toward the 18 day EMA again, but the drop was modest and SMSI rebounded to close with a gain. The Thursday move was a good shakeout and it also filled the gap from early in October. May take another session or so, but this move lower and recovery has set up the continued breakout move. To recap: SMSI is working laterally for the past week, consolidating the sharp break higher earlier this month from a 3 month reverse head and shoulders base. The move took SMSI to a 6 year high. We really like how SMSI refuses to give up its gains as it consolidates, similar to DJ30 and SP500 early in the month. Want to see volume spark up again as it starts the next move higher.
Volume: 458.272K Avg Volume: 917.709K
BUY POINT: $17.35 Volume=1.1M Target=$20.95 Stop=$15.95
POSITION: QPM AW - Jan. $17.50c (53 delta) &/or Stock
http://www.investmenthouse.com/ct/smsi.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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