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Begin Part 3 of 3
FITB (Fifth Third Banc--$62.22; +0.08; optionable): Regional banks
http://biz.yahoo.com/p/f/fitb.html
STATUS: FITB tried mid-December to break out of a double bottom with handle but hit the middle hump resistance and by Monday had tested back to the 50 day MVA (now at 60.53) in another handle. It is now on higher volume attempting another breakout and Friday was fighting resistance at its intraday high (62.80) while it makes higher lows. It did manage to close just above some resistance at the 62 range. Volume was up to 1.73 million (avg. 1.5 million) and we are now looking for a breakout over the December high. Strong money flow and relative strength is moving out ahead of price. Target: 76
BUY POINT: 63.05 on volume of 2.3 million or higher. Stop: 58.64 (7%)
POSITION: Stock and/or May $55 calls to buy (FTQ EK). Deltas unavailable.
http://www.investmenthouse.com/ct/fitb.html
CAKE (Cheesecake Factory--$34.81; +0.26; optionable): Leisure
http://biz.yahoo.com/p/v/vrts.html
STATUS: CAKE broke out of a v-bottomed base (that stretched from mid-July to the end of November, and has now pulled back to the 50 day MVA after a couple of bounces from the 18 day MVA (at 35.08). After testing the lower support Friday (at 33.57), CAKE rebounded on strong and rising volume and closed just under the 18 day (827,300; avg. 539,000). On a move over that resistance, we will look at taking positions for a continued bounce up to our initial target, 37.75, the January high. Above that, target moves up to 44. Strong money flow.
BUY POINT: Aggressive: 35.15 on continued rising volume. Stop: 32.69 (7%)
POSITION: Stock and/or April $35 calls to buy (CFQ DG). Deltas unavailable.
http://www.investmenthouse.com/ct/cake.html
MOGN (Mgi Pharm--$15.90; 0.00; optionable): Drugs
http://biz.yahoo.com/p/m/mogn.html
STATUS: In a 2-year base but more recently in a cup with handle that formed after MOGN broke out over its 200 day MVA back in September. This smaller cup is part of a bigger base that began to develop in January of last year. The stock showed a doji Friday at the bottom of the handle, tapping the 18 day MVA on the low (15.64) with volume lower at 128,100 (avg. 139,000). Sitting on the 10 day MVA above the December closing high (15.65), we are looking for a move up and breakout 16.77. January high is 17.05, but on a strong move that shouldn't hold the stock back. Super money flow and high relative strength. Target: 20
BUY POINT: 16.90 on volume of 209,000 or higher. Stop: 15.72 (7%)
POSITION: Stock and/or April $12.50 calls to buy (QOG DC). Deltas unavailable.
http://www.investmenthouse.com/ct/mogn.html
NCR (Ncr Corp--$42.26; +0.22; optionable): Information Software
http://biz.yahoo.com/p/n/ncr.html
STATUS: Still in an overall downtrend but has formed since late May a cup with handle. The stock has pulled back in the handle to find support at the 18 day MVA (41) where it gave a little bounce Friday. Volume was lower but still above average at 626,000 (avg. 426,000), but we look for the stock to head up from here on again rising volume for the breakout. The down trendline is at 46, handle high at 44.78. We will look for the strong move to take NCR through both levels of resistance. Good money flow and buying. Target over the down trendline (which connects December 2000 and May 2001 highs):
54. Earnings are out on Friday.
BUY POINT: Aggressive: 42.70 on rising volume. Stop: 39.71 (7%). Breakout: 44.91 on volume of 639,000 or higher. Stop: 41.77 (7%)
POSITION: Stock and/or April $40 calls to buy (NCR DH). Deltas unavailable.
http://www.investmenthouse.com/ct/ncr.html
THOR (Thoratec--$19.15; -0.20; optionable): Health Services
http://biz.yahoo.com/p/t/thor.html
STATUS: In a 16-month cup base with highs near 25 but more recently has formed a 13-week cup and is now pulling back in a handle on low volume. Showed a doji Friday with volume rising a bit to 272,000 (avg. 574,000), pulling off the high of 19.75 that tapped near resistance at 20 (lateral consolidation from August/September and some other later prices). Looking for a breakout over that potential resistance on strong volume. The stock has solid money flow and buying. Target: 24
BUY POINT: Aggressive on a breakout over the handle high at 19.45: 19.58. Stop: 18.21 (7%). Over resistance at 20 (hit 8 times since August): 20.13 on volume of 861,000 or higher. Stop: 18.72 (7%)
POSITION: Stock and/or April $17.50 or $20 calls to buy (TQU DW or DD). Deltas unavailable.
http://www.investmenthouse.com/ct/thor.html
RMG (Cable-Rainbow--$27.50; +1.24; optionable): Media
http://biz.yahoo.com/p/r/rmg.html
STATUS: Breaking out of a cup with handle and is almost at the buy point of 27.63, the January high. Volume fell off very nicely in the handle, just the way we like it to, then spiked higher Friday (1.04 million; avg. 494,000) sending the stock off support at the 10 day MVA (26.41). Looking for the breakout, upon which RMG will post a new all-time closing high (the stock was a new issue last April. Super money flow and buying. Target: 32
BUY POINT: 27.63 on continued strong volume. Stop: 25.70 (7%)
POSITION: Stock and/or March $22.50 calls to buy (RMG CX).
http://www.investmenthouse.com/ct/rmg.html
Small stocks:
Back on:
EGOV (National Info Consortium--$4.12; -0.06; no options): Internet Software
http://biz.yahoo.com/p/e/egov.html
STATUS: Looks great in a picture-perfect pullback/test of the breakout. EGOV broke out of its 4-month cup with handle earlier this month, and on the test has pulled back from the breakout high (4.65) with price and volume gradually falling in the exact manner we like to see. EGOV is holding support at the 10 day MVA (4.03), showing Friday a doji on very low volume of 25,600 (avg. 111,000). Needless to say we are looking for the stock to move back up soon, and look for strong gains on the move. Huge money flow and good buying. Target: 6
BUY POINT: Aggressive: Over 4.25 on average or higher volume. Stop: 3.95 (7%)
POSITION: Stock.
http://www.investmenthouse.com/ct/egov.html
DSTM (Datastream--$7.26; +0.20; optionable): Software
http://biz.yahoo.com/p/d/dstm.html
STATUS: This software stock has made one bounce from the 18 day MVA this month, and is now making a pullback toward that general direction as of the close Friday. In fact, the intraday low of 6.75 tapped just near that support (the 18 day MVA is actually at 6.61). Volume is another very interesting element here, just flying up to 514,600 (avg. 98,000). The company rejected on January 8 MRO Software's buy-out offer, and news was out Wednesday that MRO may consider a hostile bid for the company. That stock (MROI) was flying on a breakout, and DSTM's huge volume spike Friday and move off the low looks like we could get the bounce here. January high is at 7.95. The stock shows strong money flow and good buying. Target: 10
BUY POINT: Aggressive: 7.55 on continued strong volume. Stop: 7.02 (7%)
POSITION: Stock and/or $7.50 calls to buy (DQK EU). Deltas unavailable.
http://www.investmenthouse.com/ct/dstm.html
Puts: Since deltas are unavailable due to options expiration, we are including those that are slightly in the money for the following puts. Often we go farther in the money, however, to get a good delta. Please check with your broker.
NBIX (Neurocrine Biosciences--$44.53; -3.04; optionable): Health Services
http://biz.yahoo.com/p/n/nbix.html
STATUS: After a nice uptrend off the September lows NBIX topped near 53 in January and corrected back to the 50 day MVA. Trouble is that it could not hold there and on some selling last Tuesday broke the support. Struggled to hold but Friday on strong and rising volume dropped again to a low new 43.50 (as it did Thursday) but this time was unable to bounce back up anywhere near the 50 day MVA. Looking for a move below the low (43.53) and drop to the 200 day MVA (37). Volume up to 1.6 million; average is 635,000).
BUY POINT: 43.30 on continued strong volume.
POSITION: February $45 puts to buy (UOT NI).
http://www.investmenthouse.com/ct/nbix.html
ISIL (Intersil Holding--$30.87; -1.36; optionable): Semiconductor
http://biz.yahoo.com/p/i/isil.html
STATUS: Earnings January 29 after the bell. ISIL broke below the 200 day MVA (now at 32.78) Tuesday, moved up on a lower volume test, the began to fall Friday in the characteristic kiss of death, unable to move back over the resistance. The stock had been trading for a week below the 50 day MVA before breaking this lower support. Looking for a move down to a target at 22 near the September lows, but want to see rising volume to break the stock below Wednesday's closing low at 29.50. Friday's volume down to 1.4 million (avg. 3.1 million).
BUY POINT: 29 on volume in the range of 3 million.
POSITION: April $30 puts to buy (UFH PF).
http://www.investmenthouse.com/ct/isil.html
ANAD (Anadigics--$12.83; +0.63; optionable): Semiconductor
http://biz.yahoo.com/p/a/anad.html
STATUS: Earnings January 30. This stock is in a big head and shoulders pattern dating from last January when it peaked in the first shoulder. Currently the stock is trying to hold on just above the neckline, which is at 11, but it is in a downtrend that started in November and is running back up to test that trendline at 13.75. Volume has been falling off and was lower on the weaker move up to test the 10 day MVA on the high of 13.17 (volume down to 1 million; avg. 1.2 million). We are looking for a bounce down from 13.50. Target: 8
BUY POINT: Aggressive: After testing 13.50. Head and Shoulders Breakdown: 10.60 (below April closing low of 10.63 at first shoulder) on above average volume.
POSITION: April $12.50 puts to buy (AUZ PV).
http://www.investmenthouse.com/ct/anad.html
MCK (Mckesson--$36.95; -0.10; optionable): Drugs wholesale
http://biz.yahoo.com/p/m/mck.html
STATUS: Earnings Tuesday before the bell. This stock is right at its down trendline (connects the July, September and January closing highs), at the point where it is likely to make a move down. On the lows hit on moves down from the resistance, MCK has been holding at the 200 day MVA or an up trendline connecting Sept, November and January closing lows, except that this month it did dip below that support to 34.50. The stock has now shown it can break both of the support levels, and if earnings news is poor, we could get a move below 34.50 (September low is 33.50). The 50 day MVA is at 36.67; 200 day at 35.76. Volume lower on the slight move down from the trendline, though still high at 1.4 million (avg. 1.2 million).
BUY POINT: Aggressive: 36.50 on rising volume.
POSITION: May $40 puts to buy (MCK QH).
http://www.investmenthouse.com/ct/mck.html
CONTINUED PLAYS:
MOVING AVERAGE BOUNCES:
IONA (Iona Tech--$25.04; +0.46; optionable): Internet software
http://biz.yahoo.com/i/iona.html
STATUS: The stock recently broke out over its 200 day MVA (24.13) and has pulled back on decreasing volume over the last 7 days, still holding the 200 day after testing the lower 18 day MVA for 4 of the last 5 days. Volume was below average and falling all week, reaching by Friday 252,400 (avg. 396,000). We like the looks of the action, and expect IONA to bounce up for a move over the January high at 27.14. Showing good money flow and strong buying. Target: 32. Earnings are out January 23.
BUY POINT: Aggressive: 24.65 on volume of 400,000 or higher. Stop: 22.92 (7%)
POSITION: Stock and/or March $20 calls to buy (YWQ CD; low open interests).
http://www.investmenthouse.com/ct/iona.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.
ORI (Old Republic--$28.20; -0.04; optionable): Insurance
http://biz.yahoo.com/o/ori.html
STATUS: Continued consolidation in the 4-month ascending wedge pattern. Looked ready for a move up Thursday with the rising, above average volume, but the stock pulled back slightly Friday with a doji while volume dropped to 188,400 (avg. 344,000). We are looking for ORI to hold above the 18 day MVA (27.72), though the stock may hold up at 28, above the November highs and several prices from this month in the pattern. Money flow is high and relative strength climbing. Target: 34. ORI is in a year-long base with highs at 32.
BUY POINT: 28.58 on volume of 485,000 or higher. Stop: 26.58 (7%)
POSITION: Stock and/or April $25 calls to buy (ORI DE; low open interests).
http://www.investmenthouse.com/ct/ori.html
IOM (Iomega--$8.62; -0.16; no options): Computer Hardware
http://biz.yahoo.com/i/iom.html
STATUS: Holding the ascending wedge pattern. Earnings were out Thursday after the bell, and the company reported a fourth-quarter net profit with revenues down sharply from a year earlier. Despite that, the stock held the 18 day MVA (8.48), boosted back up from the intraday low of 8.40 by strong institutional support (volume shot up to 430,500; average is 204,000). Still looking for a breakout. Good money flow. Initial target: 10. Short term at the 200 day MVA at 10. 20% move, normal target on breakout, is at 11.
BUY POINT: 9.01 on volume of 278,000 or higher. Stop: 8.38 (7%)
POSITION: Stock.
http://www.investmenthouse.com/ct/iom.html
BASING/TRADING RANGES:
Small stock:
FORG (Vtel--$4.18; -0.03; no options): Telecom
http://biz.yahoo.com/p/f/forg.html
STATUS: Still in the extended handle to the 8-week cup it formed off the run from the September lows. Was in an ascending wedge in the handle that has tightened into a week-long lateral movement as volume continues to shake down to very low levels (34,400; avg. 233,318). That is what is keeping our interest at this point; FORG closed right at the 18 day MVA, which has been the main support in this part of the pattern (for January), so as long as it holds that on the volume shakeout, we will watch for the breakout. Showed 3 hammer dojis over the last 4 days; those signal a possible move up. If it slips below support, we are moving on. Excellent money flow and buying. Target: 6
BUY POINT: Aggressive: Over 4.60 on 240,000 or higher. Stop: 4.28 (7%)
POSITION: Stock.
http://www.investmenthouse.com/ct/forg.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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