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yahoo stock, stock watch
Begin Part 2 of 2
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: Breakout from SATH!
Stocks/Indexes from the Wednesday report:
RSAS: A small pullback for the covered call play, tapping support on the low before bouncing slightly. Looking for a move up to buy stock.
TPTH: Still looks good in the ascending wedge.
SCH: Some selling back to the 10 day MVA.
ASKJ: Not the follow-through we wanted on the incipient breakout move from yesterday (cup with handle). Pulled back a nickel on very low volume.
KRON: Another doji, this on low volume. Looking for the move down (covered call).
Continuing plays:
ERJ: Heck. Fell out of the three-day, tight lateral pattern.
NT: Back at support, the 18 day MVA, in a short, short cup with handle it formed right after breaking out of another, 4-month cup with handle. Interesting.
OLGC: Broke out Tuesday, had a weaker move yesterday, and headed back down today; look for a test of the buy point at 5.48, but you don't want it falling below that.
RHAT: Broke out Monday, but could not move higher. After 2 days of lateral movement, began falling back today, but held above the buy point on low volume.
SBUX: Trying to hold on to support that is just under 22, after the stock broke out over its down trendline a week ago.
TMWD: Looks ready to make its second bounce from the 18 day MVA after breaking out of a base in early December. Buy point for aggressive positions is 5.50, but it is forming a potential head and shoulders pattern on this low volume move today.
TTWO: Looks good on a pullback form its recent breakout from a flat base-type pattern, with volume nicely lower below average. Showed a doji off a tap of the 10 day MVA as it forms a handle to a 4-month cup. Buy point is 19.63.
UTSI: Profit-taking back to the 10 day MVA, but for now holding above the December high, but is likely to test the 18 day MVA (again) at 30 before making another bouncing run up.
WMT: Getting ready for a bounce up from the 50 day MVA (will be its 4th since early October).
Best Plays:
1) RESP: We like the low volume in this handle.
2) WEDC: Broke out of a cup with handle.
3) DGX: Ready to bounce from the 50 day MVA.
Update:
RESP (Respironics--$35.1; +0.22; optionable): Health Services
http://biz.yahoo.com/p/r/resp.html
STATUS: In a 14-week cup with handle that is volatile, but that is the style of this stock. Currently in the handle, RESP was up Thursday from its 18 day MVA (34.82) but volume was lower at 78,100 (avg. 286,000). That does not concern us greatly if it will ramp up tomorrow to support this move, since we like the fact that volume has been falling in a very gradual and orderly manner in the handle, exactly what you want to see. The stock is showing good money flow and we look for a breakout over the handle high at 36.56. Target: 44
BUY POINT: Breakout: 36.69 on volume of 429,000 or better. Stop: 34.12 (7%).
POSITION: Stock and/or April $30 calls to buy (SBU DF; low open interests).
http://www.investmenthouse.com/cd/resp.html
WEDC (White Electronic Designs--$7.60; +0.49; no options): Semiconductor
http://biz.yahoo.com/p/w/wedc.html
STATUS: WEDC is in a 16-month base and currently has formed a double bottom after a big jump off of the October low. It broke out of the pattern today on very strong volume (volume slightly lower from Wednesday's levels, 358,000; avg. 85,000). It was helped by news that bookings were at a record $9.7 million. The stock pulled off the high of 7.90 and may try to pull back to test the buy point at 7.58 or to the December high at 7.25 before moving back up. That would give us a better entry point for adding to or initiating new positions from here. Otherwise, on a continued strong move up from here, the stock remains a buy on the breakout up to $8.10. Once the move looks ready to top, we will look at cashing in and waiting for the next move up. Strong money flow and high relative strength. Initial target: 10
BUY POINT: Over 7.60 on continued strong, preferably rising volume. A buy up to 8.10 on the breakout. Stop: 7.11 (7%)
POSITION: Stock.
http://www.investmenthouse.com/cd/wedc.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: ACS, NVDA, DGX, FRX, LLL, CACI, KRON, MIK, BMET, APPB, LOW, MYL, IGT
Removed AJG as we closed out the put; the stock was up over a point on decreasing volume. We can look at playing it down again if it moves up to the 18 day MVA (33.50 range) and can't take it out.
Put Play:
IDPH (IdecPharm--$64.92; +1.71; optionable): Biotechnology
http://biz.yahoo.com/p/i/idph.html
STATUS: IDPH has been struggling at the 50 day MVA (65.51) for a week, after crashing through that support on heavy selling 6 days ago. It has tested the resistance for the last week, and moved back up again to tap it on the high of 65.32, but with volume falling back to 3.5 million (avg. 3.26 million). If the stock loses this fight, it can fall to the 200 day MVA at the 57.50 range. Potential support at the 60 range, so on a fall will watch that level for the continued move down to the 200 day, and we want to see rising volume on the aggressive move down from here (the kiss good-bye, a move back down after a failure to move back over resistance).
BUY POINT: Aggressive: 63, on preferably rising volume (selling).
POSITION: February $75 puts to buy (IHD NO).
http://www.investmenthouse.com/cd/idph.html
DGX (Quest Diagnostics--$67.62; +0.86; optionable): Health Services
http://biz.yahoo.com/p/d/dgx.html
STATUS: DGX is in a cup with handle base of just over 6 months. It has pulled back in the handle to its current support at the 50 day MVA (66.18), with volume decreasing in the handle just the way we like: steadily falling and now well below average at 358,500 (avg. 657,000). The stock gave a little bounce from the moving average, so looks ready to hold the support. Has about 4 points to run up to the breakout, so we can look for a continued bounce from here for taking aggressive positions, then look at adding to on the breakout. Strong money flow. Target: 86
BUY POINT: Aggressive bounce: 68.90 (over the Wednesday high of 68.80; 18 day MVA is at 68) on strong and rising volume. Stop: 64.08 (7%). Cup with handle breakout: 72.40 on volume of 986,000 or higher. Stop: 67.33 (7%)
POSITION: 50 day bounce: Stock and/or February $65 or May $60 calls to buy (DGX BM or EL). Breakout: February or May $65 calls to buy (DGX BM)
http://www.investmenthouse.com/cd/dgx.html
Covered Call:
NVDA (Nvidia--$65.99; -1.62; optionable): Semiconductor
http://biz.yahoo.com/p/n/nvda.html
STATUS: Crossed below the 18 day MVA (66.21) though volume was lower at 8.27 million (avg. 9 million). It tapped potential support at 65, so if NVDA moves below that, we are looking to sell calls on the stock for a move down to the 50 day MVA at 59.24. For a 5-point move, the February $65 calls which are selling currently for $6.30 and delta of 0.59, should drop to around $2.75 once the stock reaches support. At that point we buy them back and pocket the difference. NVDA may be tired after making the 4 bounces from its trendline, so we are looking for some kind of correction; this may be the start.
BUY POINT: 65 on preferably rising volume.
POSITION: February $65 calls to sell, to buy back when NVDA hits support (RVU BM).
http://www.investmenthouse.com/cd/nvda.html
BMET: Made it back over the 50 day MVA on above average volume. Someone is buying it.
ACS: Has been defying gravity and we are watching closely to see if the move starts to slow. A hanging man doji today could be a problem, but volume was lower. Note, however, how it made a new high on volume lower than the prior late December high and the early January selling. It is showing some signs of weakening, but has not made a dramatic climax run yet. We will continue to watch closely for the turn to take some profits off the table or at least sell some calls.
MIK: Held with a doji (shooting star) after selling back for 6 days; that can be an indicator the stock is ready to move back up. We were looking for it to head to the lower 50 day MVA to buy back calls, so will watch carefully to see how strong any move up is. Can hit the 18 day MVA and fall back down again if it does move up.
LOW: Held the 50 day MVA Thursday, after hitting that support previous day on strong volume. Good.
UP & COMERS PORTFOLIOS: BBBY, KKD, NDN, SRCL, EBAY, KG.
BBBY: Still looks good in the ascending wedge pattern as it holds support at the 18 day MVA. Buy point is 35.08 for a breakout.
KG: Made it back over the 50 day MVA but was a weak move on lower, well below average volume. At least it made the move we wanted. Now has to get over the 18 day MVA just under 41.
EPIQ: Below the 50 day MVA. We said we were not going to ride it down to the 50 day MVA (17.46), so are out. If it moves back over the 50 day, we can look at getting back in at that point.
MEMBER PORTFOLIO: BRCM, CHKP, AMAT, JNJ, MSFT, AOL, BUD, PXLW.
MSFT: Tenaciously holding support at its 18 day MVA (68.07). Volume was low, and the stock threw a smaller spike yesterday as it continues to tap resistance at 70. Tightening up and not a real clear ascending wedge, but close. Buy point is 70.75 for a breakout.
JNJ: Made it back over the 50 day MVA but volume was weak. Will look for it to hold here.
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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