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Begin Part 2 of 2
THE PLAYS: DIAN continued to move higher, and with the strong volume today, may add to it.
Best Plays:
1) PKI: Ready to head higher.
2) IBIS: Moving up after testing the breakout.
3) TUNE: Ditto.
4) AUDC: Ready to break out of the ascending wedge.
5) NMTC: Ready to break to a new high.
6) OO: Up on higher volume.
7) CREE: Up on solid volume.
8) LTD: The retailers looked good today, and this one is ready to break out.
9) SERO: Going to try again.
10) EMLX: Ready for a breakout.
Index Update:
SOX: Hit our initial target on the put play when it hit the 50 day MVA (currently at 521). Today it did not manage to close over the 50 day MVA (521.14), giving back all of the gains, so we held on. Our first target is 500, and if the SOX cannot get back over the 50 day here, can drop down to that level in the next stage of the put play. Now if it closes over the 50 day MVA tomorrow, we will have to reevaluate.
New:
PKI (Perkinelmer--$34.41; +0.87; optionable): Diversified Services: Technical
http://biz.yahoo.com/p/p/pki.html
STATUS: PKI is in a 14-month base (highs at 60) and currently in a 7.5-month saucer base at the bottom. Wednesday the stock took out some resistance in the form of the July highs at 33.95 (the actual July high is 34.50); the stock pulled off its high of 35.29 but on the hold above 33.95 and with the strong volume, we are looking for a continued move up. A clear breakout from this saucer will be on a move over the highs at the start of the base at 38.27, but we can look at playing a move up to that range before the stock perhaps begins forming a handle. Money flow and buying are strong.
BUY POINT: Aggressive: 34.55 on continued rising volume (up to 820,900; avg. 773,000). Stop: 32.09 (7%)
POSITION: Stock and/or March $30 calls to buy (PKI CF).
http://www.investmenthouse.com/ct/pki.html
IBIS (Ibis Tech--$13.06; +0.36; optionable): Semiconductor
http://biz.yahoo.com/p/i/ibis.html
STATUS: After making a nice breakout move over the 200 day MVA (11.68), IBIS tested the move on a pullback to the 200 day and 10 day MVAs (the latter is at 12.13). Volume was higher Wednesday (136,200; avg. 143,136) with the stock moving up from the 10 day MVA off a Monday doji. Looking for a breakout over the December high at 13.75, looking at aggressive positions from here on continued positive action. Strong money flow and good buying. Target:17
BUY POINT: 13.36 on above average volume. Stop: 12.18 (7%)
POSITION: Stock and/or April $10 calls to buy (UIB DB).
http://www.investmenthouse.com/ct/ibis.html
Continued Plays from the 12-19 report:
TUNE (Microtune--$23.72; +1.00; optionable): Electronic Equipment
http://biz.yahoo.com/p/t/tune.html
STATUS: Still testing the breakout from its 5-month base, and made a nice move up Wednesday on rising volume (556,700; avg. 1 million). The stock has used the 18 day MVA (22.15) for solid support the last week, and it is from there it made today's move. Looking for a breakout over the recent highs at 25.10 and 25.69, looking to a target at the 30 range. TUNE hit our aggressive buy point at 23.75, but pulled back below it; we are plotting a new buy point after that action. Strong money flow and buying.
BUY POINT: Aggressive: 24.50 on continued rising volume. Stop: 22.79 (7%)
POSITION: Stock and/or February or April $20 calls to buy (TUF BD or DD).
http://www.investmenthouse.com/ct/tune.html
From the 12-18 update:
AUDC (Audiocodes--$4.87; +0.62; optionable): Scientific & Technical Instr
http://biz.yahoo.com/p/a/audc.html
STATUS: Making a nice move up in the ascending wedge. Volume shot up to 579,200 (avg. 367,000), so look for the breakout! Showing solid money flow and buying. The 200 day MVA is at 5.72 for potential resistance on the move up. Target: initial 6.50
BUY POINT: Aggressive: 4.95 on continued strong volume. Stop: 4.60 (7%). Breakout: 5.12 on continued strong volume. Stop: 4.76 (7%)
POSITION: April $5 calls to buy (XRD DA).
http://www.investmenthouse.com/ct/audc.html
NEW PLAYS (from the weekend report):
ETM (Entercom--$47.56; +0.64; optionable): Media
http://biz.yahoo.com/p/e/etm.html
STATUS: Has not gained much after last Friday's strong-volume move up from the 18 day MVA in the handle. ETM is in a 6-month cup base; volume has dropped off sharply and is now well below average as the stock price holds near Friday's closing price of 47.38 (volume down Wednesday to 83,100; avg. 231,000). ETM looks ready to hold support at the 18 day MVA (46.27). Money flow and buying look good. Target: 60
BUY POINT: Aggressive: 47.70 on rising volume in the range of 170,000 or higher. Stop: 44.36 (7%). Breakout: 50.13 on continued strong volume (minimum breakout volume is 351,000).
POSITION: Stock and/or March $40 calls to buy (ETM CH).
http://www.investmenthouse.com/ct/etm.html
CEPH (Cephalon--$76.10; +0.59; optionable): Drug
http://biz.yahoo.com/p/c/ceph.html
STATUS: Has continued the breakout from the 6-month cup with handle (or almost a reverse head and shoulders with the choppy action), but the moves over the last 2 days have been small. Reason: volume has fallen off sharply from Friday's strong levels when the stock made its initial breakout (down Wednesday to 798,800; avg. 1.6 million). CEPH remains a buy on the breakout up to 77.51, but after making a nice run up from the 50 day MVA (over the last 9 days), CEPH may be tired and will need that test back to 72-73, highs at the start of the base. If so, we will look for a move back up after the pullback. Money flow looks good. Target: 90
BUY POINT: Riding positions taken at 75, the aggressive buy point. A buy up to 77.51 on a continued move up on much stronger volume.
POSITION: Stock and/or February $70 calls to buy (CQE BN).
http://www.investmenthouse.com/ct/ceph.html
NMTC (Numerical Tech--$36.48; +2.38; optionable): Software
http://biz.yahoo.com/p/n/nmtc.html
STATUS: Made a nice move up Wednesday with volume surging above average to 618,300 (avg. 539,000) in a dull volume market. The stock is testing the recent breakout from a large ascending wedge-type pattern that formed since January, and made our aggressive buy point of 34.06 on Monday but the strong move did not come until today (when the stock took out our next buy point at 35.83). Look for a continued climb and break over the December high at 37.28. NMTC is in an 18-month base. Strong money flow and buying. Target: 43
BUY POINT: Riding positions taken at 34.06 and 35.83. New buy point: Over 36.50 on continued rising volume.
POSITION: Stock and/or April $30 calls to buy (QEK DF).
http://www.investmenthouse.com/ct/nmtc.html
Some smaller stocks:
OO (Oakley--$17.25; +0.27; optionable): Sporting Goods (sunglasses)
http://biz.yahoo.com/p/o/oo.html
STATUS: Still testing the recent breakout when OO made it back over its 200 day MVA (currently at 16.81), but Wednesday the stock got a stronger shot of volume (244,000; avg. 463,000). OO moved higher with that, but the move was small, the stock holding below the December highs near 17.65. We are nonetheless looking for a breakout over that high with volume pushing higher. OO did end up testing the 10 day MVA on Monday as predicted, and intraday moved back over the 200 day MVA in a bullish break back over the resistance (hitting our aggressive buy point at 16.90). Money flow is steady and at good levels, and buying is very strong. Target: 20
BUY POINT: Riding positions taken at 16.90. New buy point for a move over the high: 17.70 on average or higher volume.
POSITION: Stock and/or February $15 calls to buy (OO BC).
http://www.investmenthouse.com/ct/oo.html
AZPN (Aspen Tech--$16.04; +0.02; optionable): Software
http://biz.yahoo.com/p/a/azpn.html
STATUS: Holding the lateral portion of this ascending wedge pattern as it tightens up above the 10 day MVA (15.91) and the 200 day MVA (17.65). AZPN is still in a downtrend from the mid-2000 highs, but we continue to like the pattern and Friday's big volume spike. Volume Wednesday was up sharply and almost to average levels (374,400; avg. 384,000) with AZPN showing a tight doji right at the 10 day. Getting ready for the move. Buying improving nicely. Target: 20
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
CREE (Cree Inc--$31.16; +1.70; 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, a volume spike that was a portent of more gains. Wednesday the stock continued higher after a Monday breather (when volume shrank sharply back below average) with volume heading back over average to 1.8 million (avg. 1.7 million). Looking for a continued move up; CREE hit our aggressive buy point of 30.06 on today's move. High at the start of the stock's recent base (a saucer base of 7 months) is 36.65. Money flow and buying look great. Target: 34
BUY POINT: Aggressive: 31.25 on continued rising volume. Stop: 29.06 (7%)
POSITION: Stock and/or March $25 calls to buy (CQR CE).
http://www.investmenthouse.com/ct/cree.html
LTD (The Limited--$14.81; +0.36; optionable): Retail
http://biz.yahoo.com/p/l/ltd.html
STATUS: Closed a cent under the buy point in the pennant, the stock heading higher with volume (808,200; avg. 1.8 million). Retailers had a good day and LTD used that to move back over the 200 day MVA (21.85). Looking for the breakout as money flow and buying continue to look solid for this stock. Target: 18
BUY POINT: 14.82 on volume of 2.5 million or higher. 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:
COHU (Cohu Inc--$19.27; -0.58; optionable): Semiconductor
http://biz.yahoo.com/p/c/cohu.html
STATUS: After Friday's huge volume spike (institutional buying when the stock hit major support at the 200 day MVA), COHU held above the 18 day MVA for the next 2 days, but Wednesday sold back down to the 50 day MVA. Volume is still well below average and just higher at 33,000 (avg. 70,000). COHU continues to hold together the handle to its 6-month cup base, and we will look for a hold at the 50 day MVA for a move back up. Huge money flow and buying. Target: 26.
BUY POINT: Aggressive: 20.25 on volume in the range of 70,000. 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--$21.69; +0.76; optionable): Biotechnology
http://biz.yahoo.com/p/s/sero.html
STATUS: Another good move up in the handle as SERO continues to use the 18 day MVA for support; the stock's previous solid move was on Friday when it headed up from the support level on another dose of rising volume. The intraday high at 22 tapped at the handle high (SERO is in a 6-month cup with handle). Continue to look for a breakout. Excellent money flow and relative strength ready to break out. 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--$51.62; +0.30; optionable): Retail
http://biz.yahoo.com/p/h/hd.html
STATUS: HD broke through some resistance Friday in its 7-month base (previous high near 54 and part of a 2-year base), and is holding above that level Wednesday as volume moved higher again; volume dropped back drastically in Monday's light trading with HD pulling back just slightly. We are watching the 54 range for potential resistance as the stock heads higher unless the stock can break out of the base on continued good news from the retail sectors. 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--$40.50; +1.38; optionable): Computer Hardware
http://biz.yahoo.com/p/e/emlx.html
STATUS: EMLX is moving up again in the handle to its 7-month cup pattern; Friday the stock moved up similarly on a bounce from the 18 day MVA (36.86) and has held the 10 day (38.48) as volume surged to 6.28 million (avg. 9 million). EMLX still looks ready to break out, and we like the nice rise on decent volume given the overall market volume. Money flow and relative strength are at high levels. Target: 50
BUY POINT: Breakout: 40.94 on volume of 13 million or higher. Stop: 38.07 (7%)
POSITION: Stock and/or February or April $35 calls to buy (UMQBG or DG).
http://www.investmenthouse.com/ct/emlx.html
BRCD (Brocade--$33.49; +0.06; optionable): Computer Periperals
http://biz.yahoo.com/p/b/brcd.html
STATUS: After holding the 50 and 200 day MVAs at the bottom of its pullback from the 40 level, BRCD has moved up the last three days, but not by much. Volume remains low and well below average, though up Wednesday to 7.2 million (avg. 18.7 million). The stock could not make the intraday high of 34.95 stick (back over the 18 day MVA, 34.12), pulling back into a tight doji. BRCD may re-test the 50 day MVA (31.42), but we continue to look for a run back up to the 39-40 range for an initial target. The stock made and held above our aggressive buy point of 33.10.
BUY POINT: Holding positions taken at 33.10. For a break of resistance: 35, on volume in the range of 18 million). Stop: 32.55 (7%)
POSITION: Stock and/or April $25 or $30 calls to buy (UBF DE or DF).
http://www.investmenthouse.com/ct/brcd.html
Puts: Still keeping an eye on these even with the overall tendency to rise right now. These are in very vulnerable positions.
CLS (Celestica--$40.75; +0.82; optionable): Hardware
http://biz.yahoo.com/p/c/cls.html
STATUS: Moved back over the 50 day MVA intraday, but closed the day 4 cents below that level. Volume remained well below average but just higher at 742,200 (avg. 2.6 million). The group overall is performing well, so we are being careful with this play. However, if CLS cannot move back over the resistance and moves below Thursday's low at 38.57, 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--$39.75; +0.14; optionable): Semiconductor
http://biz.yahoo.com/p/l/lltc.html
STATUS: Moved back over the 50 day MVA (40.95) intraday, but with volume rising ended up closing near the low of 39.51. The stock is edging closer to our buy point of 39.30. This is LLTC's third try to break the resistance; last Friday the attempt was on strong, above average volume. Today's volume was up to 2.5 million (avg .5.7 million). Target on a move below the buy point: 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--$43.36; -0.05; optionable): Insurance
http://biz.yahoo.com/p/s/spc.html
STATUS: Moving laterally for the second day; volume dropped very low Monday but was higher Wednesday at 852,100 (avg. 1.6 million). On the rising volume SPC did not close above its opening price (43.50). Just a few cents above our buy point for the downside play. Initial target: 40. 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
PPG (Ppg Industries--$50.80; -0.08; optionable): Conglomerates
http://biz.yahoo.com/p/p/ppg.html
STATUS: In a bearish head and shoulders pattern and holding with its second consecutive doji just above the neckline, which is at 50. Volume was up sharply Wednesday to 7.7 million (avg. 670,000); if the stock cannot break back over 52 (resistance at the 200 day MVA) on this stronger volume, look for the move toward the buy point at 49.80. Our target is 46, initially. First shoulder in the pattern formed in early November, and PPG is trying to break out from 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--$39.00; +0.38; optionable): Brokerage
http://biz.yahoo.com/p/i/itg.html
STATUS: Has formed a kind of head and shoulders pattern over the past 5 months with the right shoulder this month making its own small 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). The neck of the pattern is at 39, and ITG hit our buy point of 38.45 Monday, though the stock held at 38 on the low that day. The stock held once again at its up trendline (connecting the September and November lows), tapping that support again Wednesday with volume rising to 230,300 (avg. 286,000). ITG closed right at the neckline price; if it moves above that we will watch the 18 and 50 day MVAs at 39.73 and 39.91 for resistance. Initial target: 36.25 (200 day MVA). Below that, 32
BUY POINT: 37.80 on continued rising volume.
POSITION: January $43.38 puts to buy (ITZ MW).
http://www.investmenthouse.com/ct/itg.html
VZ (Verizon--$47.20; 0.00; optionable): Telecom
http://biz.yahoo.com/p/v/vz.html
STATUS: Held at 47, trying to find support here at previous lows and moving up slightly to end the day. On the high it hit its 18 day MVA of 47.75. VZ tanked Friday after opening at the level of its recent double-top price pattern, and has held above our buy point of 46.90 thus far. Volume was higher at 3.8 million (avg. 5.7 million), so the pull back down from the high hints that VZ just may make the move down. 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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