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yahoo stock, us stock market
Begin Part 2 of 2
TEAM TRADES
With the INTC and pricing news out of Asia, we were looking for semiconductor stocks that were in good shape to buy. One we had on the SSR that was waiting in the wings as it formed its handle was BRKS. A sharp rally in April caved in, and gave birth so to speak to this somewhat skewed cup with handle, skewed by the September 11 attack. Then handle was a longer one (3 weeks), but the price action was mostly on the low volume we like; when it did spike up, it was on the 'right' kind of days, i.e., moving higher or finishing in the top of the range. Well, today the stock started higher with a nice, deliberate, high-volume move. We were looking for the break over the 200 day MVA and were tempted when it did that early in the session, but we decided to see how much the move had in it. Well, it ran to 44 (200 day MVA at 42.92), but then it just moved sideways with the Nasdaq below the buy point we were looking at, over the intraday high in the handle (44.20 +1/8). After volume was non-existent for 5 hours, it started up on some volume surges. Right at 2:00 it hit the buy point; volume was at 117% of average, well on its way to the 1.1 million target. We looked at some options but there was no action going on in them so we turned to stock and the ask was 44.35 with the bid running from 44.23 to 44.32. We put in a limit order at 44.32 to see what would happen. About 5 minutes later it worked. The stock continued to move for the last hour, adding about $1 above the entry point.
THE PLAYS:
Reading the Plays: Please note that when we reference the 10, 18, and 50 day moving averages (MVA), those are exponential moving averages (EMA). The 200 day moving average is always simple (SMA). We will note when we reference a particular MVA differently, e.g., a simple 50 day MVA. Please click on the Yahoo and chart links for company and charting information. A "prior high" refers to the high at the start of a base.
For conserving space on listings of stop losses, the symbol (7%) indicates that the stop is 7% below the buy point.
Good Movers: NTAP broke out! NVDA broke out to a new all-time closing high as the chips rallied. BRCM, NVLS, SMTC and AMAT made nice moves as well, along with VRTS. SEBL, a recent subscriber's choice, broke above the 200 day MVA on strong volume, as did RIMM.
Stocks/Indexes from the Wednesday report:
NMHC: Another point with volume even stronger, but pulled off the intraday high, potentially a short-lived breakout.
EUNI: Held near Wednesday's closing price in the test of the breakout (doji).
VRTS: Broke above the December highs resistance in a solid move.
IPIC: Another break of December high resistance levels. Not a big gain, and volume was lower.
BUD: No need for suds today. BUD inched higher after again testing the 18 day MVA on the intraday low. Testing the breakout.
Continuing plays:
AVID: Making a move up in the cup with handle (previous subscriber's choice). Looks ready.
BEAS: Made a nice breakout move from a lateral-type pattern it formed below the 50 day MVA (16.03). Volume was huge, but BEAS still has resistance at the November and December highs (19.15 and 18.60, respectively).
CBR: Moving up in its test of the breakout, with volume flying up.
CLS: And it did break the 18 day MVA, with volume rising! Solid move up.
EXTR: Crossed above the 50 day MVA on stronger volume (almost at average). A positive upside move, so we are abandoning the put play plans.
JBL: Up on rising volume and closed just under the 50 day MVA. Potential put play.
KEA: Making a move up in the handle with volume rising. Buy point for a breakout is 20.18 (closed at 18.74, so aggressive players may wish to look at entry points before that).
SEBL: On a continued move above the 200 day MVA: buy point from here is 31.90 on continued strong volume, stock and/or February $27.50 calls to buy (SGQ BY).
SGI: Nice move today, but needs to beat the November high. Took out the aggressive buy point in the test of the breakout (2.30). Volume was strong but just lower.
AZO and ORLY: Auto parts coming under pressure. AZO below 50 day MVA on heavy volume. If cannot break back over tomorrow, we are out. Watching for the test of the 50 day at 67; if that fails, time to sell. ORLY is doing the same; if it cannot move back over 33.75 tomorrow, we are out.
Best Plays:
1) LRCX: A strong breakout over the 200 day MVA.
2) ITWO: Looking for a shorter term trade.
3) SBUX: Breaking out and still a buy.
4) NOK: Still a buy on its breakout, too.
5) MSFT: Looks ready to break out.
New:
LRCX (Lam Research--$26.08; +1.89; optionable): Semiconductor
http://biz.yahoo.com/p/l/lrcx.html
STATUS: A semiconductor that made a good move today. LCRX broke out of a 5-month cup with handle-type base (it has the September dip that hit the market so is not a smooth cup), taking out resistance at the 200 day MVA (25.07) and the pivot point at 25.95. The move had good volume backing it at 3.1 million (avg. 2.75 million), and with the closing price just over the pivot, remains a buy on this breakout move. This smaller base is inside LRCX's much larger 21-month cup. We are looking for an initial target at the 30-31 range, near the highs at the start of this smaller pattern. Money flow continues to trend up, and relative strength is breaking out. May pull back to test the pivot point, which would give us the chance to get in at a better price.
BUY POINT: 26.15 on continued rising volume. A buy on the breakout up to 27.25.
Stop: 24.32 (7%).
POSITION: Stock and/or February (low open interests) or March $22.50 calls to buy (LMQ BE or CE)
http://www.investmenthouse.com/cd/lrcx.html
A shorter term trade:
ITWO (I2 Technologies--$8.61; +0.51; optionable): Application Software
http://biz.yahoo.com/p/i/itwo.html
STATUS: Deep in a 22-month base but off the lows, and recently broke out of a pennant-type pattern that formed after the stock's move back over its 50 day MVA (currently at 6.68). ITWO continued to move up on the breakout though in a modified test of the breakout it battled with sellers Monday, and the lower volume Wednesday had it lingering at 8. That is now support from which ITWO made another strong move up Thursday; volume was sharply higher at 22.7 million (avg. 13.7 million). Looking for a trade up to the 200 day MVA at 12. Solid money flow and buying.
BUY POINT: 8.70 on continued strong volume. Stop: 8.09 (7%)
POSITION: Stock and/or February $7.50 calls to buy (JQ BU).
http://www.investmenthouse.com/cd/itwo.html
SBUX (Starbucks--$20.42; +0.91; optionable): Specialty Eateries
http://biz.yahoo.com/p/s/sbux.html
STATUS: Breaking out of a volatile handle to a 6-month cup base (previous highs near 23), and over its down trendline (connecting the February and June highs). After hours the company reported that December sales were up 3% and that revenues were higher (22%) from the same period last year. Volume was strong on the move and up sharply at 6.3 million; avg. 4 million). Buy point was just above the December high of 19.97 (20.10), making SBUX a continued buy on the move as it is still within the 5% limit. Target: 24
BUY POINT: 20.55 (just over the intraday high) on continued strong and rising volume. Stop: 19.11 (7%). A buy on the move up to 21.11.
POSITION: Stock and/or February $20 calls to buy (SQX BD).
http://www.investmenthouse.com/cd/sbux.html
Update: An updated subscriber's choice that looked good today.
NOK (Nokia--$26.90; +1.33; optionable): Telecom
http://biz.yahoo.com/p/n/nok.html
STATUS: NOK broke out of the ascending wedge pattern Thursday, with volume blasting up to 18.5 million (avg. 12 million). The pattern's high is at 26.10, which put the buy (pivot) point at 26.23; thus, the stock remains a buy on this breakout move since it is still within 5% of the buy point. NOK is in a 7.5-month cup base that is inside a larger, 19-month base, and formed the ascending wedge at the top of a nice uptrend from the September low (12.08). We are looking for a continued move up in the breakout, and anticipate NOK to form a handle to this smaller base, once it tires out on this run. Looking at an initial target at 31 (highs at the start of this cup are near 35).
BUY POINT: Over 26.96 (intraday high) on continued strong volume. Stop: 25.07 (7%). A buy up to 27.54 on the breakout.
POSITION: Stock and/or April $22.50 calls to buy (NAY DX).
http://www.investmenthouse.com/cd/nok.html
PORTFOLIOS: Each report, we look at these to see which is in a buy position. We don't cover them all each time, just the ones that look ready to pick up a few shares.
THE LEADERS: New Leaders (new list): ACS, NVDA, DGX, FRX, LLL, CACI, AJG, KRON, MIK, BMET, APPB, LOW, IDPH, TARO, MYL, IGT, VRSN
AJG: Continued to fall Thursday, hitting 32.56 on the low and bouncing. Volume was quite strong, so we will see which direction AJG heads now. Looking for a lower target at 31-30.
ACS: Continued to fall, tapping the 18 day MVA on the low of 102.10. Will watch that level for support for the covered call buy-back.
APPB: Can bounce from the 50 day MVA after reversing Wednesday's move below the 50 day MVA. Volume was strong and the stock held at the September and November tops.
FRX: Looks ready to try to hold the 18 day MVA, tapped on the intraday low and showing a doji on slightly lower volume. FRX is in a pullback from the December high (83.19) and will try to move back up from here.
IGT: Testing the 18 day MVA.
LOW: Moving down to test the 50 day MVA. Volume was high and above average, with the stock bouncing back from a low of 43.54 (the 50 day MVA is at 42.83).
UP & COMERS PORTFOLIOS: Here is the new portfolio list: BBBY, EPIQ, KKD, MMS, NDN, SRCL, CPRT, EBAY, THQI, KG. Removed BJ, as it is well below the 200 day MVA and failing to move up in the double bottom.
KKD: Still testing the 18 day MVA as volume dropped back below average and the stock showing a tight doji; KKD looks like it can move up from here if the support holds. We were looking at possibly selling some calls on our older positions for a ride to the 50 day MVA on a break of the support., but KKD may hold here for a move back up after this test. It is holding above the November tops at 42 (closed Thursday at 42.82).
NDN: Down again, but held the 50 day MVA. Volume was a nip higher, so still in danger of crossing below the support.
EBAY: Continued higher on a move up from the 18 day MVA, though volume was weaker. Not a strong move.
MEMBER PORTFOLIO: New portfolio as selected by the subscribers. Some of these stocks are still struggling to move higher in their bases, and will likely continue to trade in close ranges just like the market. We'll be ready to catch them when they are ready to move. The new list: BRCM, CHKP, AMAT, JNJ, MSFT, AOL, HGSI, BUD, PXLW.
Old members: BRCM, CHKP, CSCO, EMLX, IDTI, INTC, JDSU, MVSN, NT, PWER, SUNW, VTSS
MSFT (Microsoft--$69.23; +2.19; optionable): Application Software
http://biz.yahoo.com/p/m/msft.html
STATUS: MSFT made a nice move up on strong volume Thursday (33.8 million; avg. 30.6 million), and looks ready to try a breakout from the ascending wedge-type pattern developed since mid-November. Highs in the pattern are actually following an upper channel line, but MSFT is posting higher closing lows as it moves up its 50 day MVA. The stock tapped that support Wednesday, setting up today's move. Look for a breakout over the December (pattern) high at 69.89. Money flow is high and relative strength is up sharply. Target: 84
BUY POINT: Breakout: 70 on continued rising volume (41 million or higher). Stop: 65.10 (7%)
POSITION: Stock and/or February $65 calls to buy (MSQ BM).
http://www.investmenthouse.com/cd/msft.html
CHKP: Made a breakout move from the lateral pattern of the last several days (at the 18 day MVA). Closed right below the 200 day MVA (43.58) at 43.17, with volume higher but still below average. The stock is in a kind of double handle to a 5-month cup with handle base. It moved over the previous handle high (at 43) mid-December but the 200 day MVA (and the market) did not allow the breakout.
AMAT: Nice move up on strong volume! Will look for a test of the 200 day MVA (43.84), either from here or on a move back down from potential resistance at the December highs (46.50 range).
BRCM: Continued Wednesday's move off the 50 day MVA. We were looking for a move down to the 200 day MVA for a covered call sale play if it broke the support.
Good Investing!
Jon L. Johnson and The Daily Staff
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 of 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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