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trade stock, stock recommendation
Begin part 3 of 3
THE PLAYS
Good Movers: MR; XING; SBUX
Thursday night play results:
OSG: Side-stepped for a day on continued low volume, still setting up the next move.
SSI: Faded back on very low volume to rest after the strong Thursday move.
ZUMZ: Gapped higher but could not hold the move.
GLW: Fell back through the 200 day SMA on rising trade.
New Plays:
Upside:
Play Date: 02/10/2007
HPC (Hercules--$20.07; -0.06; optionable): Specialty chemicals
http://biz.yahoo.com/p/h/hpc.html
EARNINGS: 1-31-07
STATUS: Breakout test. Chemicals are hot so to speak. HPC is easing back to the 10 day EMA (20.05) on below average volume as it tests its breakout from a 10 week base to start February. Strong volume on the breakout move shows the buyers were coming in, and now the nice test is setting up the next break higher. Strong fundamentals growth rates and in a strong technical position to move higher and follow its money flow.
Volume: 683.3K Avg Volume: 868.213K
BUY POINT: $20.32 Volume=1M Target=$24.38 Stop=$19.68
POSITION: HPC FD - June $20c (58 delta) &/or Stock
http://www.investmenthouse.com/cd/hpc.html
Play Date: 02/10/2007
QGEN (Qiagen--$17.20; -0.10; optionable): Biotechnology
http://biz.yahoo.com/p/q/qgen.html
EARNINGS: 2-13-07
STATUS: Breakout test. Looking at QGEN again after it gapped away from us in late January when we were looking to move in on the first test of the breakout from its 14 week base. It rallied up to 18 on that last move, and it is now testing the 10 day EMA (17.19), taking a breather before continuing the breakout run. Earnings are out on Tuesday, and we would prefer to catch it on a good earnings result versus holding it at the release.
Volume: 348.085K Avg Volume: 419.055K
BUY POINT: $17.52 Volume=500K Target=$20.95 Stop=$16.77
POSITION: QXE EW - May $17.50c (56 delta, 54 OI) &/or Stock
http://www.investmenthouse.com/cd/qgen.html
Play Date: 02/10/2007
RATE (Bankrate--$44.03; -0.21; optionable): Internet-based consumer banking services
http://biz.yahoo.com/p/r/rate.html
EARNINGS: Released 2-6-07
STATUS: Test breakout. RATE gapped higher Tuesday on its earnings results, clearing an 8 week cup base that was part of a larger 9 month cup with handle pattern. Strong volume on that breakout and then a lateral move to end the week, refusing to give up its gains. Volume jumped back up on Friday but it held its ground. If it breaks higher from here on solid trade we will enter part of the position and then see how it tests. Very strong fundamentals and now a strong technical pattern after a long base following its strong 2005 and 2006 rally.
Volume: 573.989K Avg Volume: 353.263K
BUY POINT: $44.95 Volume=500K Target=$53.95 Stop=$41.78
POSITION: QIB EI - May $45c (54 delta) &/or Stock
http://www.investmenthouse.com/cd/rate.html
Play Date: 02/10/2007
TWGP (Tower Group--$34.11; -0.17; optionable): P&I insurance
http://biz.yahoo.com/p/t/twgp.html
STATUS: Double bottom w/handle. TWGP is moving laterally at 34 as the 10 day EMA (33.77) rises to meet it. The stock is forming the handle to its 18 week base, working laterally on low volume, taking a breather after a strong January run off of the low in the pattern. It may take several more sessions to finish forming the handle and setting up the breakout toward a new all-time high. TWGP made us some nice coin on its last run in September and October 2006, and once this handle is formed we are looking for a breakout to enter the play and make us some more money on the next run.
Volume: 155.809K Avg Volume: 275.09K
BUY POINT: $34.62 Volume=415K Target=$40.95 Stop=$33.44
POSITION: PTQ GG - July $35c (55 delta) &/or Stock
http://www.investmenthouse.com/cd/twgp.html
Downside:
Play Date: 02/10/2007
AXP (American Express--$57.53; -0.96; optionable): Credit services
http://biz.yahoo.com/p/a/axp.html
EARNINGS: 1-22-07
STATUS: Head and shoulders. Taking another look at AXP again as it breaks lower on rising trade. We exited it when it recovered the 90 day MA last week on better volume, but it could not hold up with the lending issues and with MA's earnings report. It broke back through the 90 day MA Friday and money flow, already down, took another big hit. Looking to move in again on a continued decline as it turns lower now that it has completed its head and shoulders top. A move to the target lands a 53%ish gain.
Volume: 4.705M Avg Volume: 4.913M
BUY POINT: $57.44 Volume=5M Target=$55.94 Stop=$58.20
POSITION: AXP OY - Mar. $57.50p (-43 delta)
http://www.investmenthouse.com/cd/axp.html
Play Date: 02/10/2007
DGII (Digi Intl.--$12.56; -0.09; optionable): PC networking and communication
http://biz.yahoo.com/p/d/dgii.html
EARNINGS: Announced 1-18-07
STATUS: Put. Looking at DGII again as it remains in excellent position to move lower. It broke below the 200 day SMA (13.01) in mid-January and has rebounded modestly and on low volume the past 3 weeks to test that level. It did not make it to the 200 day MA on this rebound, however, only making it to the 18 day EMA on the highs. Money flow remains in the toilet. Looking for DGII to break lower below 12.50 with a more decisive move. Still low open interest on the options (30), but the pattern is good and the bid/ask spread is not bad. Looking for a clean break lower to move in.
Volume: 95.498K Avg Volume: 126.19K
BUY POINT: $12.45 Volume=140K Target=$11.52 Stop=$12.78
POSITION: UGW PV - Apr. $12.50p (-43 delta, low OI)
http://www.investmenthouse.com/cd/dgii.html
Play Date: 02/10/2007
WDR (Waddell & Reed--$25.25; -0.60; optionable): Investment brokerage
http://biz.yahoo.com/p/w/wdr.html
EARNINGS: Reported 1-30-07
STATUS: Head and shoulders. Financials came under pressure late last week after the news on the sub-prime mortgage situation. It tried to break through the 50 day EMA (25.97) but failed, and Friday it broke lower, falling through the 90 day MA (25.52) on much stronger, above average volume. Money flow is weak and it is getting weaker, heading lower ahead of price. Looking to move in as it continues lower. A move to the target lands a 57%ish gain.
Volume: 717.6K Avg Volume: 619.329K
BUY POINT: $25.12 Volume=725K Target=$24.05 Stop=$25.57
POSITION: WDR OE - Mar. $25p (-43 delta)
http://www.investmenthouse.com/cd/wdr.html
SUBSCRIBER PORTFOLIO: These are stocks subscribers suggest by vote that we put in a portfolio to track and move into the stocks if they perform well. If you have any suggestions for additions or deletions, email us. We don't cover them all each report, just when something interesting is developing.
AAPL, AKAM, CELG, DRIV, GME, GOOG, ISE, MA, MRVL, NVDA, WEBX
AAPL: That attempt to get off the 90 day SMA failed and now it is back at that level.
CELG: Still setting up the next breakout off of the 50 day EMA test.
DRIV: Gapping higher on huge trade as DRIV's strength continues to build.
GOOG: Breaking through the 90 day MA for the first time since September 2006.
ISE: Fading further, testing support at 45 on the Friday low. This is where it needs to rebound. A move through 48 on volume is a buy.
MA: Tough session as MA gapped higher on earnings but was sold and it reversed sharply, a 15 point intraday swing as investors unloaded MA.
NVDA: Nasty turn back down Friday on strong volume, failing at the 50 day SMA and piercing the 90 day MA on the close.
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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trade stock
stock recommendation
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