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trade stock, stock recommendation
Begin part 3 of 3
THE PLAYS
Good movers: CNX; DO; ESV; GSF; GVA; HNP; NTGR; NVDA; OII; OSK; RIG; ROSE; RS; TMO; UAPH
New Plays:
Upside:
Play Date: 05/12/2007
GS (Goldman Sachs--$227.50; +4.40; optionable): Investment brokerage
http://biz.yahoo.com/p/g/gs.html
EARNINGS: Announced 3-13-07
STATUS: Ascending base. GS has formed a 4 week ascending base along the 10 and 18 day EMA following a mid-April move higher off the 50 day EMA. This last pattern is basically an extension of an 8 week base consolidating the strong September to February run. Volume has been low most of the move, though it was very strong as GS moved off the 50 day EMA in April. During this recent sideways move the low volume is a good thing. Want to see it perk up as GS makes the next break higher, however, clearing the three week lateral move. The leader in its sector, and when it gets going the gains come quickly. Using options as at this stock price it ties up an awful lot of capital for the gain you would get in the stock alone.
Volume: 4.958M Avg Volume: 7.452M
BUY POINT: $228.25 Volume=9M Target=$249.00 Stop=$222.75
POSITION: GPY GF - July $230c (53 delta)
http://www.investmenthouse.com/ci/gs.html
Play Date: 05/12/2007
LFC (China Life Insurance--$50.27; +3.47; optionable): Chinese life insurance
http://biz.yahoo.com/p/l/lfc.html
EARNINGS: Announced 4-18-07
STATUS: Cup w/handle breakout. The Chinese ADR's were moving Friday for a number of reasons: loosening restrictions, strong China GDP, and a strong trade surplus. Oh yes, and strong patterns. LFC formed a great 18 week base using the 50 day EMA as support, a level where the bigger buyers accumulate shares. It bounced up in April and formed the laterally 4 week handle over the 18 day EMA. That set the stage, and when the news high Friday, LFC was in breakout mode, surging higher and above the handle high on the best volume in 4 months. Looking to move in with some positions as it continues the move and then adding on the first successful test.
Volume: 4.756M Avg Volume: 1.2M
BUY POINT: $50.65 Volume=1.5M Target=$58.45 Stop=$48.21
POSITION: LFC JJ - Oct. $50c (60 delta) &/or Stock
http://www.investmenthouse.com/ci/lfc.html
Play Date: 05/12/2007
NCTY (The9 Limited--$43.20; +1.96; optionable): Chinese online games
http://biz.yahoo.com/p/n/ncty.html
EARNINGS: 5-22-07
STATUS: Flying plateau. Looking at NCTY again as it has set up once more and is trying to make the next break higher. NCTY jumped out of a 10 week base in early April, gapping higher on serious volume. It got away from us on that gap, and we kept watching to see if it would test. It has, but it has refused to give up any ground in the test, instead moving laterally at roughly 42, consolidating the gains as it held them as well. Friday volume moved up to average as NCTY jumped higher with most of the Chinese stocks. Want to see some more trade as it makes the rest of the break higher, but it is looking very good and is the leader in its sector.
Volume: 296.372K Avg Volume: 384.073K
BUY POINT: $43.55 Volume=475K Target=$50.00 Stop=$40.98
POSITION: NQT IH - Sept. $40c (67 delta) &/or Stock
http://www.investmenthouse.com/ci/ncty.html
Play Date: 05/12/2007
OIH (Oil Services Hldrs Trust--$162.46; +4.66; optionable)
http://biz.yahoo.com/p/o/oih.html
STATUS: Test breakout. Looking for OIH to make us some more money after it has tested its last run that we rode to some nice gains. It came back to the 18 day EMA and tapped at that level all last week, bouncing up and down. Friday it got its feet under it as the energy sector recovered, the services companies included. Looking to move in as the OIH continues bouncing higher. A move to the target provides a handsome return. A $10 move, not too difficult for OIH when it starts running, returns a bit more than 60%.
Volume: 8.899M Avg Volume: 9.643M
BUY POINT: $162.88 Volume=10M Target=$178.00 Stop=$159.22
POSITION: OIH GL - July $160c (60 delta)
http://www.investmenthouse.com/ci/oih.html
Play Date: 05/12/2007
SPN (Superior Energy--$38.42; +1.84; optionable): Oil and gas service company
http://biz.yahoo.com/p/s/spn.html
EARNIGNS: Announced 5-2-07
STATUS: Flying plateau. From the general to the specific, we are also looking at SPN as it continues its breakout move. It broke high from a 15 week double bottom with handle in April, but the run peaked at 38 and then faded as energy went through a bit of a pullback. It worked laterally for 4 weeks and then Friday it got the nod, posting a strong price and volume gain as it cleared the highs in the lateral move. Showing superior energy on this move and we are ready to tap into it as it continues higher this week.
Volume: 1.827M Avg Volume: 1.35M
BUY POINT: $38.71 Volume=1.6M Target=$44.95 Stop=$36.21
POSITION: SPN IG - Sept. $35c (67 delta) &/or Stock
http://www.investmenthouse.com/ci/spn.html
Downside:
Play Date: 05/12/2007
AEO (American Eagle Outfitters--$29.14; +0.68; optionable): Apparel stores
http://biz.yahoo.com/p/a/aeo.html
EARNINGS: 5-22-07
STATUS: Put. Same store sales fell 14% but after breaking below the 200 day SMA (29.70) to start May, AEO was moving up into the number and it did not wreck the stock. It didn't send it shooting higher either. Friday it gapped up to the 18 day EMA, but it ran out of gas at that point, showing a loose doji on the session. Volume was lower and below average; not a lot of power any way you slice it. It managed to hold the early March lows, but we don't think it is going to do so this next trip down apparel lane. This is a large 7 month umbrella top, and the break of the key 200 day SMA shows a serous lack of commitment by the big money. A move to the target lands a 50%ish gain. It looks as if AEO could drop further to 26, however.
Volume: 2.092M Avg Volume: 3M
BUY POINT: $28.88 Volume=3M Target=$27.25 Stop=$29.34
POSITION: AEO RF - June $30p (-64 delta)
http://www.investmenthouse.com/ci/aeo.htm
Good Investing!
Jon L. Johnson and your IH Alerts 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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trade stock
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