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us stock market, stock watch
Begin Part 2 of 2
Begin Part 2 of 2
Best Plays:
1) ROH: Tanking below the 200 day MVA.
2) ACTN: At support on low volume.
3) WW: The wedge is tightening nicely and the stock continues to spike volume.
4) MROI: Wedge looks good.
5) VIP: Still holding the 18 day MVA on low volume in the test of breakout.
6) RECN: Crouching for upside move.
New: Looking for a quick bounce to the upside for a day or two from the techs, with the idea that once at resistance the move may fail as the indexes hit their resistance levels and head back down, leading the way. Quick play.
VRTS (Veritas--$41.88; -3.22; optionable): Software
http://biz.yahoo.com/p/v/vrts.html
STATUS: VRTS moved over the 200 day MVA recently and was looking strong, but has moved back below that support and Wednesday sold back down to the 50 day MVA (actually, just under the level which is at 41.91). Volume was high on the move down at 15 million (avg. 13 million). The stock bounced 4 cents off the low; if it can get back over the 50 day MVA we will look for a quick move up to the 18 and 200 day MVAs, converged at 45.22 and 45.28, respectively.
BUY POINT: Aggressive: 42 on continued rising volume. Stop: 39.06 (7%)
POSITION: Stock and/or February (aggressive) or May $35 calls to buy (VIV BG or EG).
http://www.investmenthouse.com/ct/vrts.html
Put:
ROH (Rohm & Haas--$33.00; -1.60; optionable): Chemicals
http://biz.yahoo.com/p/r/roh.html
STATUS: ROH broke below the 50 day MVA Monday; took a breather yesterday and in today's action fell through the 200 day MVA (33.87) with renewed vigor. Volume was huge at 1.65 million (avg. 724,000) and we look for a continued move down to a target at 30 to 28.
BUY POINT: Below 33 on continued strong volume.
POSITION: February $40 puts to buy (ROH NH).
http://www.investmenthouse.com/ct/roh.html
New from Monday:
ACTN (Action Performance--$33.70; +0.20; optionable):
http://biz.yahoo.com/p/a/actn.html
STATUS: Looked ready to make a nice move off the 50 day MVA on Monday, but volume dropped off the next 2 sessions with the stock holding above support of the 18 day MVA (32.89). Volume was very low at 101,000 (avg. 333,000). Continue to look for a move up, now from the 18 day MVA. Hitting consistent resistance at 34. Target: 41 (initial). Strong money flow.
BUY POINT: Aggressive: 34.10 on continued strong volume. Stop: 31.71 (7%)
POSITION: Aggressive: Stock and/or April $30 calls to buy (QNC DF; low open interests).
http://www.investmenthouse.com/ct/actn.html
BRKS (Brooks Automation--$44.90; -2.02; optionable): Semiconductor equipment
http://biz.yahoo.com/p/b/brks.html
STATUS: Pulling back in the handle to is 5.5-month cup with handle base inside a 20-month base. We were looking for a hold of support at the 10 day MVA but the stock slid down to 44.90, eight cents under the 18 day MVA. Volume was up and strong at 1.44 million (avg. 694,000) for this chip equipment maker. Looking for a test of the 200 day MVA, 43.33, but that will be too steep a pullback for a good handle. Right now BRKS is holding above the December high at 44.20 so we would like to see the move back up from here. Good buying. Target: 60
BUY POINT: Aggressive: 47, on continued strong volume. Stop: 43.71 (7%). Breakout: 50.85 on minimum breakout volume 1 million or higher. Stop: 47.29 (7%)
POSITION: Aggressive: Stock and/or April $40 calls to buy (BQE DH). Breakout: Stock and/or April $45 calls to buy (BQE DI)
http://www.investmenthouse.com/cd/brks.html
NOVL (Novell--$5.21; -0.37; optionable): Software
http://biz.yahoo.com/p/n/novl.html
STATUS: In a 23-month base and in early December crossed over its 200 day MVA (now at about 4.50), consolidated back down to the 18 day MVA in a pennant-type pattern from which the stock broke out. It tested the move and Tuesday made a nice move up on above average volume, but like many stocks today pulled back on lower volume (4 million; avg. 3.3 million). It may now try to form a handle to the recent 6.5-month cup base, so we are looking for a few more days of consolidation above 5, level of the 18 day MVA. Excellent buying. Target: 7
BUY POINT: Breakout: 5.77 (over Tuesday's high at 5.64) on volume in the range of 4.5 million or higher. Stop: 5.37 (7%)
POSITION: Stock and/or May $5 calls to buy (NKQ EA).
http://www.investmenthouse.com/ct/novl.html
Put:
ABGX (Abgenix--$25.23; -1.06; optionable): Biotech
http://biz.yahoo.com/p/a/abgx.html
STATUS: Hit our buy point of 26.25 Tuesday, and headed lower today with volume continuing to drop (down Tuesday to 1.1 million; avg. 1.6 million). We are looking for a move down to the 22.50 range. Unless volume cranks up, may hold here at 25. We will continue to look for the strong move down.
BUY POINT: Riding positions taken at 26.25, looking for rising volume on a continued move down.
POSITION: April $40 or $35 puts to buy (AZG PH or PG).
http://www.investmenthouse.com/ct/abgx.html
New from the weekend:
Covered Call:
BORL (Borland--$15.26; -0.69; optionable): Software
http://biz.yahoo.com/p/b/borl.html
STATUS: BORL looks like it is going to try to hold at the 50 day MVA (now at 14.98). Volume dropped off over the last three days, down Tuesday to a low 313,400 (avg. 836,000). Showing a loosed doji just above the support on the low volume is not exactly a recipe for a move down, except to complete the move to the 50 day MVA. We will watch it, and if we get a strong bounce, close out the covered call play. The February $15 calls are now selling for $1.35 (were at $2.05 when the play was written).
BUY POINT: Riding positions taken at 16. If BORL moves back over the 18 day MVA we will close the play.
http://www.investmenthouse.com/ct/borl.html
MROI (Mro Software--$23.15; -0.70; optionable): Applications
http://biz.yahoo.com/p/m/mroi.html
STATUS: Continued to hold the ascending wedge on low volume, which was actually rising the last 2 days (Wednesday to 162,200; avg. 234,000). Showing a doji at the 18 day MVA (22.72) and a tap at resistance at 24, we still like the looks of the pattern for a breakout. The wedge formed after MROI broke out of a cup with handle. High money flow and relative strength, and buying is improving. Target: 30. Earnings are out tomorrow at an unspecified time - could be the key.
BUY POINT: Aggressive: 24.50; Breakout: 25.13 on volume of 312,000 or higher. Stop: 23.37 (7%)
POSITION: Stock and/or March $20 calls to buy (UPJ CW).
http://www.investmenthouse.com/ct/mroi.html
LXK (Lexmark--$57.00; -1.45; optionable): Peripherals
http://biz.yahoo.com/p/c/lxk.html
STATUS: In a cup with handle of just over 6 months, part of a 21-month base. The stock has been holding the 18 day MVA (57.93) for the last week for the most part, but on rising volume Wednesday fell back through in a stronger move down (volume up to 1.36 million; avg. 1.34 million). Can test the range of the 50 day MVA at 55, not what we were looking for from LXK, but a gradual move down to the support would not be a total loss. However, it looks ready to make a quick drop if it cannot hold above some December prices at the 56.65-56.85 range. Holding current buy points if it can get back up quickly Look for a hold at Target on a breakout: 74
BUY POINT: Aggressive: 59.75 on continued rising volume. Stop: 55.57 (7%). Breakout: 62.03 on volume of 2 million or higher. Stop: 57.69 (7%)
POSITION: Stock and/or April $55 calls to buy (LXK DK).
http://www.investmenthouse.com/ct/lxk.html
WW (Watson Wyatt--$22.00; +0.10; no options): Diversified Services
http://biz.yahoo.com/p/w/ww.html
STATUS: An 8-week ascending wedge that is inside a 20-week cup with the deep cut in September (highs at the start of the base are near 28 in mid-August). Still looks super as the pattern tightens up, and we have seen three volume spikes inside a week, and one was today (209,800; avg. 76,000). This is like a pot ready to boil over from the looks of it. We just want it to throw the lid up, not down. Buying and money flow look better and better. Target: 27
BUY POINT: 22.13 on continued strong volume (min. breakout volume was 97,200). Stop: 20.58 (7%)
POSITION: Stock.
http://www.investmenthouse.com/ct/ww.html
VIP (Vimpel Commun--$28.00; +0.40; optionable): Telecom
http://biz.yahoo.com/p/v/vip.html
STATUS: Broke out of the ascending wedge Friday but pulled back immediately with volume dropping back since (to Wednesday's low 135,200; avg. 318,000). We wanted to see VIP hold the 18 day MVA (27.04) and it has done that, making a small move up from the support today as the low volume was up just slightly from that of Tuesday. Continued to look for a strong move up after this test; the ascending wedge formed at the upper right side of a 17-month cup - again, not the best position for this pattern. High money flow. Target on a breakout: 35
BUY POINT: Move over the breakout high: 29.55 on continued strong volume. Stop: 27.48 (7%).
POSITION: Stock and/or April $25 calls to buy (VIP DE).
http://www.investmenthouse.com/ct/vip.html
NEWP (Newport--$21.96; -1.82; optionable): Scientific & Technical Instruments
http://biz.yahoo.com/p/n/newp.html
STATUS: Were looking for NEWP to hold the 200 day MVA in its test of the recent strong breakout over that major support/resistance level, for a move back over the January high. It was showing good price/volume action until Wednesday when it got socked with selling, moving through the 18 day MVA (volume up to 1.57 million; 946,000). Dropping.
http://www.investmenthouse.com/ct/newp.html
INVN (Invision--$28.80; -1.70; optionable): Scientific & Technical Instruments
http://biz.yahoo.com/p/i/invn.html
STATUS: The new issue that had a super run up since last November and tested back to the 50 day MVA (25.46) this month. We got the bounce back up but INVN was back below the 18 day MVA Wednesday with volume falling back to very low levels (921,600; avg. 2.7 million). We would have expected the stock to hold the 18 day, but it may need to move laterally for another week or so (or more, as it carves a lengthier base). If we get the quick move back over the resistance, fine, and will look at a new aggressive buy points. December high is at 47.09 (initial target is at 35).
BUY POINT: Continue to ride positions taken at 29. New buy point from here (aggressive): Over the Tuesday intraday high of 31.46. Stop: 29.26 (7%)
POSITION: Stock and/or April $25 calls to buy (FQQ DE).
http://www.investmenthouse.com/ct/invn.html
Smaller stocks:
AXCA (Axcan Pharma--$13.61; -0.59; no options): Drug
http://biz.yahoo.com/p/a/axca.html
STATUS: Was testing the strong November and December run up to the January high at 14.58 and gave a strong move up Friday, looking ready to break to a new high. However, the stock Wednesday dropped back below the 18 day MVA (13.94), where we were looking for a hold. Now will likely see the 50 day MVA, and from there can look for a bounce. Will wait for that move down to support, but no new positions from here.
http://www.investmenthouse.com/ct/axca.html
GSLI (Gsi Lumonics--$9.73; -1.05; optionable): Scientific & Technical Instruments
http://biz.yahoo.com/p/g/gsli.html
STATUS: Looked ready for a breakout from the 8-month cup with handle (part of a 17-month base) but Wednesday more than retraced Tuesday's incipient breakout move. We noted on last night's report that the move could fail unless volume backed it up (was low) and that is just what happened (volume lower today at 93,500; avg. 92,136). Looks headed for the 18 day MVA (9.52) where with the low volume we will expect a hold. Not a good handle now, and we have a failed breakout move on our hands. No new positions though we will keep the buy point if an unlikely miracle occurs. Target: 14
BUY POINT: Breakout: 10.88 on volume of 140,000 or higher. Stop: 10.12 (7%).
POSITION: Stock and/or April $7.50 calls to buy (HQJ DU; low open interests)
http://www.investmenthouse.com/ct/gsli.html
FORG (Vtel--$4.25; +0.04; no options): Telecom
http://biz.yahoo.com/p/f/forg.html
STATUS: In an extending ascending wedge handle to a cup formed off of its nice rise off of the September lows. FORG made a nice move up Friday on solid volume, but the stock didn't follow through on the move and it has now pulled back to the support of its 18 day MVA (4.17). Still looking good as it holds on low volume (up to 100,700; average 241,000), and still watching for a breakout. Excellent money flow and buying. The stock is in a 22-month base. Target: 6.
BUY POINT: Aggressive: Over 4.60 on continued strong volume. Stop: 4.28 (7%)
POSITION: Stock.
http://www.investmenthouse.com/ct/forg.html
SHLM (A.Schulman--$15.74; -0.02; no options): Consumer non-durables
http://biz.yahoo.com/p/s/shlm.html
STATUS: Broke out last Friday from the lateral pattern it had formed as a test of the breakout. The last three days it has held on, dipping back slightly and with light volume (38,700; average 124,400). Not bad action, but we want it to hold on and not give up the move after one solid advance. Volume is doing what we want. If it can hold over the consolidation highs at 15.39, looking for a move over the breakout high with an infusion of volume. Money flow and relative strength at excellent levels. Target: 19
BUY POINT: Over 16.11 on above average volume. Stop: 14.98 (7%).
POSITION: Stock.
http://www.investmenthouse.com/ct/shlm.html
Puts:
KBH (Kb Home--$38.55; -0.35; optionable): M&C: Residential
http://biz.yahoo.com/p/k/kbh.html
STATUS: Hit a lower volume high (41.44) in late December and on its pullback is now struggling to hold the 18 day MVA (38.61). Volume was strong on the drop, and on the climb back up this week it has been weaker. Today it dipped back again on continued low volume of 471,500 (average 600,000). We have been looking for a break of the 50 day MVA (36.46) with a drop to the 200 day (31), but for the moment it looks like it could hold on.
BUY POINT: Below 50 day: 36 on continued rising volume.
POSITION: February $40 puts to buy (KBH NI).
http://www.investmenthouse.com/ct/kbh.html
FLR (Fluor--$29.82; -4.47; optionable): M&C: Heavy Construction
http://biz.yahoo.com/p/f/flr.html
STATUS: Wow, this put play was beautiful. FLR took out the buy point Tuesday with good volume, and then just tanked today as volume picked up to a very heavy 2.67 million (average 355,000). The company could not point to anything that would cause the drop, but the pattern told us enough of a story: A steady descending wedge riding down a long-term downtrend. With the steady lows and descending highs, pressure builds for a powerful drop. The target is 28, and if we get a relief bounce, the aggressive can look at adding new or additional positions.
BUY POINT: Aggressive: After a test back up toward 31, a drop back through 30 on continued strong volume.
POSITION: February $35 puts to buy (FLR NG).
http://www.investmenthouse.com/ct/flr.html
APC (Anadarko Petro--$49.13; -0.87; optionable): Energy
http://biz.yahoo.com/p/a/apc.html
STATUS: After the big drop Friday where it broke off with a downside gap through support on a downgrade (and on general concerns that upcoming earnings throughout the sector will sag), APC gapped way down Monday and rebounded. It is a bit erratic at the moment, today gapping back but holding with a doji on lower volume (2.53 million; average 2.52 million). We were looking for the rebound to stall at 50 and drop back, although in hitting the buy point today volume was not as strong as we were wanting to see. We will keep looking for strong volume on a move back down, looking at a put back toward the September low of 44.
BUY POINT: Aggressive: On a move back through 48 on increased volume.
POSITION: February $55 puts to buy (APC NK - check price, delta, etc. with your broker).
http://www.investmenthouse.com/ct/apc.html
CONTINUED PLAYS:
TEST OF BREAKOUT:
AUDC (Audiocodes--$4.95; -0.30; optionable): Scientific & Technical Instr.
http://biz.yahoo.com/p/a/audc.html
STATUS: Slipping away. AUDC has pulled back and been trying to hold onto its 18 day MVA (5.12), but is having a tough time of it, especially with the market we saw today. For the second time in three sessions, AUDC closed back below the 18 day, but volume on the selling was still weak at 152,500 (average 350,000) which is what we want. It needs to hold on here, and we could see a relief bounce in the market which could help. We want to see it move back over the 200 day (5.41) for aggressive positions. Strong money flow, and buying is good. Initial target: 7
BUY POINT: Aggressive: For new positions, a move back over the 200 day on above average volume. Stop: 5.15 (7% below buy point of 5.50)
POSITION: April $5 calls to buy (XRD DA).
http://www.investmenthouse.com/ct/audc.html
KLIC (Kulicke & Soffa--$17.49; -1.36; optionable): Semiconductor
http://biz.yahoo.com/p/k/klic.html
STATUS: KLIC was looking good on a gentle pullback after its early-January breakout move, but with the carnage today KLIC gapped through its 18 day MVA (18.68), closing on its 50 day MVA. Volume picked up sharply to 2.4 million (average 1.3 million), so we will see if it can hold and bounce with the market and sector, which could take jump back with the AMD news. An aggressive play, and we would carefully watch the short term MVA's (10 day at 18.92) on the move.
BUY POINT: Aggressive: On a bounce from here with the market over 18, with continued strong volume. Stop: 17.
POSITION: Stock and/or March $15 calls to buy (KQS DC).
http://www.investmenthouse.com/ct/klic.html
LNOP (Lanoptics--$6.63; -0.53; no options): Software
http://biz.yahoo.com/p/l/lnop.html
STATUS: Has fallen way back, unable to hold onto its former pattern high at 7.50, or its 200 day MVA (6.88). The initial drop back after the nice breakout move stopped us out, but we were seeing if it could find support and set up again. It could be destined to test the 50 day MVA, at 6.32; if so, we can see if it can set up for another bounce. From here it is not at a buy point.
http://www.investmenthouse.com/ct/lnop.html
WEDGES, PENNANTS, and FLYING PLATEAUS (AND FLAGS): These are some of our favorite patterns as the moves can be explosive. In this market, however, we need to see the move on the breakout on strong volume.
KANA, formerly KANAD (Kana Comm--$20.40; -2.11; no options): Internet Software
http://biz.yahoo.com/p/k/kana.html
STATUS: Gave a strong breakout and was showing a nice test, but it fell back Monday on some news regarding a financing proposal, stopping us out. Today it continued back through the 18 day MVA (22.09). Volume was heavy on the selling (830,800; average 3.25 million), and it has now taken out its former pattern (December high). The 50 day MVA is below at 18.29. Toast for now.
http://www.investmenthouse.com/ct/kana.html
BASING/TRADING RANGES:
VAST (Vastera--$16.43; +0.15; optionable): Information Technology Software
http://biz.yahoo.com/p/v/vast.html
STATUS: VAST is in an 11-month cup with handle that is inside a larger base. Still consolidating in the handle and holding above the 18 day MVA (15.94), today reaching up just over 17 (our buy point), but with volume not showing much (up to 294,600; average 323,200), and the stock pulled back to close with a loose doji. We will see if it can hold the 18 day, but if it cannot we'll move on. Huge money flow and good buying. Target: 22
BUY POINT: Aggressive: Over 17 on volume of 350,000. Stop: 15.35 (7%). Breakout: 18.73 on volume of 430,000 or better. Stop: 17.42 (7%)
POSITION: Stock and/or April $15 calls to buy (AQY DC).
http://www.investmenthouse.com/ct/vast.html
RECN (Rscs Connection--$26.17; -0.13; optionable): Business services
http://biz.yahoo.com/p/r/recn.html
STATUS: Still holding the short-term MVA's (10 & 18 day at 26.20 and 25.90), forming its ascending wedge as a handle to a 7-month cup base. While not the preferable handle to a cup, it is behaving well, holding support and showing decent price/volume action. Today RECN again tapped the 18 day at its low before showing a doji, with volume spiking back up to 362,800 (average 270,000). We will see if it can move, but if it does not show us something here soon, we will move on. Target: 34
BUY POINT: Aggressive: 27 on above average volume. Breakout: 28.38 on 405,000 or higher. Stop: 26.39 (7%)
POSITION: Stock and/or March $25 calls to buy (QRG CE; no open interests).
http://www.investmenthouse.com/ct/rcen.html
Continued Puts:
PPG (Ppg Industries--$46.59; -1.78; optionable): Conglomerates
http://biz.yahoo.com/p/p/ppg.html
STATUS: Got the little bounce and drop back, allowing some new or additional positions to be taken as PPG continues its steep, steady slide. Volume picked up to very heavy levels today, at 1.26 million (average 651,000). It is nearing out target at 46, but we will continue to ride positions on continued weakness through that level. Again, we could get a relief bounce, and the aggressive can take positions on a fall back through 46. On strong drop through 46, we are adjusting the target to 42, but watching for a possibly sharper relief bounce as it has taken quite a fall from 54.
BUY POINT: Aggressive: If we get a bit of a weak bounce from here, a drop through 46 on continued strong volume.
POSITION: February $55 puts to buy (PPG NK)
http://www.investmenthouse.com/ct/ppg.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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