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Begin part 3 of 3
THE PLAYS
Good movers: ISRG; OIH; ROCM; VLO; WFR
Best Plays:
1) IOC: Showing solid momentum.
2) MS: Setting up for another big upside move.
3) MT: Ready for more after this little base
4) ANAD: Nice higher low.
5) ISE: Excellent test of near support to end the week
6) MA: A sweet handle forming to a sweet pattern.
New Plays:
Upside:
Play Date: 03/24/2007
IOC (Interoil Corp.--$26.65; +1.60; optionable): Oil and gas refining
http://biz.yahoo.com/p/i/ioc.html
STATUS: Cup. Nice 20 week consolidation is giving way to some upside. After a strong run to end 2006 it needed a breather, and this was it, a pullback roughly around the 50 day EMA (24.22). It tapped at 22 once, twice, and then three times two weeks back, and that sent it higher last week. Volume finally came in on Friday; well, it was solid Tuesday as well. Excellent money flow is leading higher and with this trade and in this sector we are ready to move in as IOC continues higher.
Volume: 767K Avg Volume: 435.528K
BUY POINT: $26.88 Volume=445K Target=$31.95 Stop=$25.00
POSITION: IOC IE - Sept. $25c (68 delta) &/or Stock
http://www.investmenthouse.com/ct/ioc.html
Play Date: 03/24/2007
MICC (Millicom Cellular--$76.82; +0.03; optionable): Worldwide mobile telephone services (Central and South America, Africa, Asia, etc.)
http://biz.yahoo.com/p/m/micc.html
STATUS: Cup w/handle. A nice little 6 week base ahs formed over the 50 day EMA (71.48), using that key level as support as MICC consolidates a 3.5 month rally after a late October breakout. After that kind of run it needs a rest, and this is the first test of the 50 day EMA since that run started. High time, and showing excellent action as it made the test and recovered to form the current base. Eased back to the 10 day EMA (75.69) to end the week, working on the handle that sets up the break higher. Just going to let it finish this pullback and then step in as it breaks higher on strong trade.
Volume: 281.034K Avg Volume: 617.232K
BUY POINT: $78.21 Volume=926K Target=$89.95 Stop=$75.55
POSITION: CDQ GO - July $75c (61 delta) &/or Stock
http://www.investmenthouse.com/ct/micc.html
Play Date: 03/24/2007
MS (Morgan Stanley--$81.10; -0.03; optionable): Investment brokerage
http://biz.yahoo.com/p/m/ms.html
EARNINGS: Announced 3-21-07
STATUS: Double bottom w/handle. MS gapped lower in late February, held the 200 day SMA (73.09) with a couple of taps in March, the last on that Wednesday reversal a couple of weeks back. It then gapped higher Wednesday on earnings, and then got the Fed goose on the behind after that. It hit 82 Wednesday and again Thursday, but it started backing off to end the week, gapping lower Friday but recovering to flat on lower, below average volume. May take another session or two to complete the handle and set up the next move higher. The gap lower and gap back up is what is called an 'island reversal', and in this situation it is a bullish signal due to the gap down and back up. MS has a lot going for it both fundamentally, technically, and from a P/E standpoint as well. After it finishes this handle it is ready to continue the move higher. Some top fundamentals growth rates to go along with this strong pattern. Nice combination.
Volume: 6.089M Avg Volume: 5.94M
BUY POINT: $82.08 Volume=8.9M Target=$94.95 Stop=$79.38
POSITION: MS GP - July $80c (63 delta) &/or Stock
http://www.investmenthouse.com/ct/ms.html
Play Date: 03/24/2007
MT (Arcelor Mittal--$52.65; +0.53; optionable): Steel and iron
http://biz.yahoo.com/p/m/mt.html
EARNINGS: 5-16-07
STATUS: Test breakout. MT has been working laterally the past two weeks, forming something of a double bottom on the 18 day EMA (49.77) as it takes a pause from the January breakout of the 9 month cup with handle base. Excellent surge Wednesday from the bottom of the range, then taking a breather to close out the week just over the 10 day EMA (51.44). That sets MA up for a break higher this week. Strong fundamentals growth rate to go along with the pattern. Ready to move in as it makes its next move.
Volume: 2.367M Avg Volume: 2.128M
BUY POINT: $53.51 Volume=3.2M Target=$63.95 Stop=$50.95
POSITION: MT IX - Sept. $52.50c (59 delta) &/or Stock
http://www.investmenthouse.com/ct/mt.html
Play Date: 03/24/2007
PCU (Southern Copper--$70.72; -0.72; optionable): Copper
http://biz.yahoo.com/p/p/pcu.html
EARNINGS: Late April
STATUS: Double bottom w/handle. Excellent breakout and run higher January and February as PCU broke from a rather elongated 8.5 month ascending base. It is now testing, forming a sweet little 5 week base, using the 50 day EMA (65.30) as support for the bottom of the two legs. Strong volume as it moved off that second bottom and rallied back up. Spent Thursday and Friday testing back, tapping the 10 day EMA (68.92) on the low and rebounding to cut its losses. Forming a nice handle that is setting up the breakout move. Might take a couple of sessions to finish the handle and set up the next break higher. Has hammered out a nice base that has set up the breakout move.
Volume: 3.134M Avg Volume: 2.569M
BUY POINT: $72.48 Volume=3.9M Target=$83.95 Stop=$69.55
POSITION: PCU IN - Sept. $70c (58 delta) &/or Stock
http://www.investmenthouse.com/ct/pcu.html
Downside:
Play Date: 03/24/2007
JNJ (Johnson & Johnson--$60.51; -0.35; optionable): Medicine chest of products
http://biz.yahoo.com/p/j/jnj.html
EARNINGS: 4-22-07
STATUS: Put. JNJ continues to struggle and continues to trend lower after failing to complete a cup base in mid-January. It has careened down the 10 and 18 day EMA (the 10 day at 61.05) as it finds new ways to look weaker. Last week it rebounded to the 10 day and then folded up the tent, collapsing lower Friday on huge volume. Issues regarding stints has induces major weakness. The heavy volume on the downside shows continued distribution. A move to the target nets a pretty solid 50%ish gain.
Volume: 17.678M Avg Volume: 10.502M
BUY POINT: $60.33 Volume=11M Target=$59.05 Stop=$60.71
POSITION: JNJ QL - May $60p (-40 delta)
http://www.investmenthouse.com/ct/jnj.html
CONTINUING PLAYS:
Upside:
Play Date: 03/21/2007
ANAD (Anadigics--$12.81; -0.15; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/a/anad.html
EARNINGS: Announced 2-12-07
STATUS: Ascending base. Excellent end to the week, showing a doji at the 10 day EMA (12.75), making a higher low in its short 6 week base. Nice higher low to set it up for the breakout this week. To recap: Volume jumped Wednesday as ANAD headed toward the breakout from a short 5 week base that formed over the 18 day EMA (12.58). This short base is consolidating the nice early February breakout and run higher from a 9 month cup with handle pattern. The move took ANAD to a 4+ year high on some tremendous volume. Nice lower trade as it consolidated, and now volume is coming back in as ANAD moves higher. Semis are looking quite good now.
Volume: 1.834M Avg Volume: 2.504M
BUY POINT: $13.55 Volume=2.6M Target=$16.32 Stop=$12.68
POSITION: AKQ GV - July $12.50c (65 delta) &/or Stock
http://www.investmenthouse.com/ct/anad.html
Play Date: 03/19/2007
CLB (Core Labs--$84.74; -0.42; optionable): Oil and gas service company
http://biz.yahoo.com/p/c/clb.html
EARNINGS: Announced 2-14-07
STATUS: Ascending base. Gapped higher Thursday and Friday, but volume remained below average both sessions so we held off. May come back to test a bit more early this week, but 84 is where it has held on the recent lows, and looking for a test and finally a blast off that level on some volume. To recap: CLB has worked laterally the past two weeks, moving just over the 50 day EMA (80) as it sets up for the next break higher in its 15 week base. Top fundamentals to go along with its pattern. Volume has remained low the past two weeks as it consolidated. Just waiting for volume to rise as it makes its move. That will give us the buy point.
Volume: 238.7K Avg Volume: 304.3K
BUY POINT: New: Test 84, then $84.72 on the way back up (orig. $82.96) Volume=450K Target=$94.95 Stop=$79.78
POSITION: CLB FP - June $80c (61 delta)
http://www.investmenthouse.com/ct/clb.html
Play Date: 03/21/2007
ISE (International Securities Exchange--$48.07; -0.18; optionable)
http://biz.yahoo.com/p/i/ise.html
EARNINGS: 4-25-07
STATUS: Cup. Some nice action last week with the move over the 90 day MA (47.79) Wednesday and then a tset to end the week, showing a hammer doji just over that level Friday. Great place for a higher low to propel it to the breakout and run back up toward the November highs at 55ish. Looks just about there; just have to be patient and let it show us the move. To recap: A great mover for us to end 2006, ISE needed to consolidate and it is doing so with the current 17 week base. It is starting to turn back up from the bottom that formed using the 200 day SMA (45.02) as support. Money flow is surging higher ahead of price and when ISE takes off it is likely to cover some ground in a hurry.
Volume: 299.7K Avg Volume: 817.762K
BUY POINT: $49.44 Volume=1.2M Target=$55.45 Stop=$46.42
POSITION: ISE GI - July $45c (63 delta) or ISE GJ - July $50c (48 delta) &/or Stock
http://www.investmenthouse.com/ct/ise.html
Play Date: 03/13/2007
IVN (Ivanhoe Mines--$11.69; -0.05; optionable): Copper and gold
http://biz.yahoo.com/p/i/ivn.html
EARNINGS: Announced 2-6-07
STATUS: Breakout test. Gapped higher again Thursday and Friday but not much headway. Volume was better and was really solid Friday; getting some trade off the 10 day EMA (11.49) test. Set up well, just has to deliver the stronger move. To recap: IVN surged to a new all-time high in early March as it broke out from an 18 week base, rallying on strong volume. It is coming back to test the move this week, tapping at the 10 day EMA last week and holding that level at near support. Looking solid and just waiting for the rebound on volume.
Volume: 1.161M Avg Volume: 588.825K
BUY POINT: New: $11.88 (orig. $11.65) Volume=1.2M Target=$14.35 Stop=$10.85
POSITION: IVN FB - June $10c (70 delta) &/or Stock
http://www.investmenthouse.com/ct/ivn.html
Play Date: 03/22/2007
MA (MasterCard--$109.86; +0.29; optionable): Credit services
http://biz.yahoo.com/p/m/ma.html
EARNINGS: 5-2-07
STATUS: Cup. Rapidly becoming one of our favorite patterns in the market with that jump higher Wednesday on stronger, average volume, then the low volume fade to end the week, starting the handle to its base. Another day or two of pullback/lateral movement to form the handle sets up the breakout. To recap: Had a hard time with earnings in early February, but set up the current 7 week base over the 90 day MA and started higher Wednesday on strong, above average volume. Thursday it tested back some on very low volume. May form a handle here before moving up, but want to be ready to move in as it breaks higher once more.
Volume: 634.724K Avg Volume: 3.199M
BUY POINT: $110.78 Volume=4.5M Target=$121.00 Stop=$106.74
POSITION: MA GB - July $110c (56 delta)
http://www.investmenthouse.com/ct/ma.html
Play Date: 03/10/2007
PCLN (Priceline.com--$54.20; -1.06; optionable): Internet hotel deals
http://biz.yahoo.com/p/p/pcln.html
EARNINGS: Reported 2-12-07
STATUS: Breakout test. Rallied last week but did not get any volume until Thursday. It closed off the high and we waited. It pulled back to test Friday, tapping the 10 day EMA (53.27) on the low and rebounding to recoup its losses. Nice fill of the small gap and tap at near support to feel the bottom. Now it looks set to make its move. To recap: PCLN made its third test of the September 2006 breakout from a long 3 year cup with handle base a week back. Made us some great money on its earlier runs, powered by the new William Shattner commercials (yea, right), and we are looking at it again right now because despite the selling in the market, PCLN has simply continued consolidating its strong February run higher. It has refused to give back any gains, instead working laterally along the 18 day EMA (52.57) and setting up its next move higher. Money flow remains strong and looking for PCLN to continue its move higher once this test is over.
Volume: 749.995K Avg Volume: 1.058M
BUY POINT: $53.55 Volume=1.7M Target=$61.65 Stop=$51.15
POSITION: PUZ GJ - July $50c (66 delta) &/or Stock
http://www.investmenthouse.com/ct/pcln.html
Downside
Play Date: 03/15/2007
AEO (American Eagle Outfitters--$30.90; +0.38; optionable): Apparel stores
http://biz.yahoo.com/p/a/aeo.html
EARNINGS: 5-22-07
STATUS: Put. Moved up last week to test the 50 day EMA (31) after that peak in January and the hard dump lower to begin March. This is the point where it floats or flushes. Looking for a move down through the 10 day EMA (30.37) to give us a good entry point on the downside move. Adjusted the buy point and the target to accommodate this move higher. Still plenty of room to give us a good gain if it turns over from here.
Volume: 1.371M Avg Volume: 3.965M
BUY POINT: $30.24 Volume=4.2M Target=$28.57 Stop=$31.05
POSITION: AEO QF - May $30p (-43 delta)
http://www.investmenthouse.com/ct/aeo.html
Play Date: 03/20/2007
CSE (Capitalsource--$24.65; +0.07; optionable): Credit services
http://biz.yahoo.com/p/c/cse.html
EARNINGS: Announced 2-27-07
STATUS: Put. Wild week as CSE was up and down, rising on stronger volume Wednesday as the market bounced, but that was also still below average volume. Friday it showed a doji just below the 18 day EMA (24.75) on very low volume. Money flow remains in the gutter, and this puts CSE at near resistance and in prime position to continue lower.
Volume: 631.1K Avg Volume: 1.237M
BUY POINT: $24.34 Volume=1.2M Target=$22.35 Stop=$24.84
POSITION: CSE SE - July $25p (-52 delta)
http://www.investmenthouse.com/ct/cse.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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