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us stock market, top stock pick
Begin part 3 of 3
THE PLAYS
New Plays: Again looking for an upside bounce and looking at some very strong stocks that still held up in the selling Friday. They will be leaders in any rebound. After a rebound we can look at some downside as well.
Upside:
Play Date: 07/28/2007
BCSI (Blue Coat Systems--$49.53; -1.12; optionable): Business security software
http://biz.yahoo.com/p/b/bcsi.html
EARNINGS: 8/19/2007
STATUS: Test 50 day EMA. Nice winner for us on its last run as it broke out in late May from a nice 9 week cup with handle base. Solid run through mid-July and then another break higher as the market broke out. As we all saw last week, that market breakout failed, and BCSI came back with the market, testing its 50 day EMA (47.89) on the Thursday low before rebounding. Friday it faded some, but on low volume so it was just drifting with the market trend that day. Bigger picture: nice base, nice breakout and run up the 10 day EMA (52.20), and then a typical deeper test to the 50 day EMA, using the overall market selling to make the pullback. Looking for BCSI to be a leader in the next rebound as it breaks higher. Looking to move in after it clears the 10 day EMA, but if the market sells lower, it tests the 50 day again, and then the market reverses, we will pick it up before then on the rebound.
Volume: 434.649K Avg Volume: 454.981K
BUY POINT: $52.32 Volume=600K Target=$62.95 Stop=$49.89
POSITION: IYU JJ - Oct. $50c (55 delta) &/or Stock
http://www.investmenthouse.com/ct/bcsi.html
Play Date: 07/28/2007
CELG (Celgene--$61.13; +0.93; optionable): Biotechnology
http://biz.yahoo.com/p/c/celg.html
EARNINGS: Announced 7-26-07
STATUS: Reverse head and shoulders. Another stock that was a nice winner for us in 2006 and then again in early 2007, CELG had become extended and needed a rest. Over the past 10 weeks as the market advanced CELG faded, forming its current cup base with a reverse head and shoulders pattern formed at the bottom. You often see that pattern form at the bottom of a cup; back when the bear market was ending we saw TSCO doing the same thing as everyone said the market was heading back down. We jumped on TSCO and caught a great gain on an early bull market leader. But I digress. After selling down to the 200 day SMA two weeks back, CELG bounced, then got a nice break higher Thursday on a strong earnings report. It continued higher Friday, gapping again, but after peaking at 62.35 it faded to post a smaller gain. As the market faded late, no wonder. We are looking for a bit more fade to start the week, say down to support near 60ish. Then on a bounce back up to continue the breakout we move in and look for CELG to provide the drug for some of those sell off blues from last week.
Volume: 6.852M Avg Volume: 4.257M
BUY POINT: $60.88 Volume=5.5M Target=$69.95 Stop=$58.78
POSITION: LQH JL - Oct. $60c (53 delta) &/or Stock
http://www.investmenthouse.com/ct/celg.html
Play Date: 07/28/2007
NE (Noble Corp.--$102.26; -2.15; optionable): Oil and gas drilling. Splits 2:1 on 8-29-07.
http://biz.yahoo.com/p/n/ne.html
EARNINGS: Announced 7-18-07
STATUS: Test 18 day EMA. NE used the market selling to test back to near support at the 18 day EMA (101.91), making a nice orderly test after the gap higher on its earnings and split announcement. It has been a heck of a run for NE, but we like how it showed strength during the selling and how it has set up at the 18 day EMA with a split in the future. That puts NE in good position to continue higher at least part of the way toward the split and give us a sweet if not noble gain.
Volume: 3.636M Avg Volume: 2.946M
BUY POINT: $103.48 Volume=4M Target=$118.95 Stop=$100.89
POSITION: NE LB - Dec. $100c (70 delta) &/or Stock
http://www.investmenthouse.com/ct/ne.html
Play Date: 07/28/2007
NVDA (Nvidia--$44.25; -0.11; optionable): Multimedia graphics chips
http://biz.yahoo.com/p/n/nvda.html
EARNINGS: 8/10/07
STATUS: Test 18 day EMA. NVDA broke out from a 24 week cup with handle base in mid-June and rallied nice up the 10 day EMA (44.74) through mid-July. It peaked and has made a nice, orderly test during this market selling, coming back to test the 18 day EMA (44.32). It held near that level on low volume, showing a nice doji on the candlestick chart Wednesday, and then a big rising star doji Friday as it tried to make the run but faded as the market rolled over late in the session. This is only NVDA's second test of the short term moving averages on this move (a strong stock can make 4 to 5 such moves before testing lower) and we are looking to pick up NVDA as it rebounds from here on stronger volume, continuing the move for a couple of more rotations.
Volume: 10.258M Avg Volume: 9.702M
BUY POINT: $45.08 Volume=12M Target=$53.95 Stop=$43.04
POSITION: UVA LI - Dec. $45c (48 delta) &/or Stock
http://www.investmenthouse.com/ct/nvda.html
Play Date: 07/28/2007
SNDK (Sandisk--$54.82; -1.78; optionable): Memory chips, memory cards
http://biz.yahoo.com/p/s/sndk.html
EARNINGS: Announced 7-19-07
STATUS: Test 18 day EMA. SNDK was one of the chip leaders off their lows, and though it is not near a new high, it is set up well to make us money. It is testing back to the 18 day EMA (54.23), forming a handle to a larger 10 month cup with handle pattern. Nice move to start July, and by the time its very good earnings came out all it could do was gap higher and then sell back as the market had started its July issues. It used the market selling to test back last week, finding support at the 18 day EMA. Excellent action in a very weak market and SNDK is in very good position to rebound and give us a nice run either on its own or with the assistance of the market overall.
Volume: 11.981M Avg Volume: 8.904M
BUY POINT: $56.32 Volume=12M Target=$65.45 Stop=$53.96
POSITION: SWF JK - Oct. $55c (55 delta) &/or Stock
http://www.investmenthouse.com/ct/sndk.html
CONTINUING PLAYS:
Play Date: 07/24/2007
BG (Bunge Ltd.--$88.32; -0.67; optionable): Agribusiness, fertilizer, food products
http://biz.yahoo.com/p/b/bg.html
EARNINGS: 7-26-07 before the open
STATUS: Breakout test. Massive surge Thursday on its earnings, but BG could not hold most of the move. It tested Friday, and rebounded, and the traders here were coming to a consensus (for some reason someone decided to take a poll) that it was a buy even with the weekend. Then BG dipped late and I tabled my decision until this week. It still looks super, however, and if it continues higher I am all over it like a load of fertilizer. To recap: BG set up a neat little 4 week double bottom w/handle this month, holding over near support at the 18 day EMA as it sets up for the break higher. The pattern is consolidating the late June breakout from a 17 week base.
Volume: 2.308M Avg Volume: 1.244M
BUY POINT: $87.04 Volume=1.5M Target=$99.95 Stop=$84.48
POSITION: BG JQ - Oct. $85c (60 delta) &/or Stock
http://www.investmenthouse.com/ct/bg.html
Play Date: 07/23/2007
DRQ (Dril-Quip--$47.12; -0.49; optionable): Oil and gas service company
http://biz.yahoo.com/p/d/drq.html
EARNINGS: 8-1-07
STATUS: Double bottom w/handle. Did an admirable job holding up in the selling, testing own to the 50 and 90 day MA on very contained volume. It is set up to give us a nice rebound and breakout this week. To recap: DRQ broke higher last Thursday after a test of the 90 day SMA intraday Wednesday and then the rebound to the close with the market. Friday it tested; good action forming the handle to its 11 week base. This base formed after the March breakout and run up to a new high at 52. DRQ is consolidating that move and with the strength in the sector the earnings are showing, it is ready to make the next breakout to another new high. Monday it gapped higher, but it could not hold its high. Looks ready to move. Very solid and yet another stock on the report that sports some of the top earnings growth rates in the market.
Volume: 611.7K Avg Volume: 563.03K
BUY POINT: $49.75 Volume=795K Target=$58.95 Stop=$47.55
POSITION: DRQ LJ - Dec. $50c (50 delta) &/or Stock
http://www.investmenthouse.com/ct/drq.html
Play Date: 07/24/2007
MIL (Millipore--$78.73; -0.67; optionable): Life science technology and services for development of drugs, vaccines, etc.
http://biz.yahoo.com/p/m/mil.html
EARNINGS: 7/31/2007
STATUS: Breakout test. Just a nice showing of strength last week as MIL tapped and easily held the 18 day EMA (78.34) on the Friday low, taking its time and setting up for the next break higher to continue its breakout run. Looks ready. Just add the upside. To recap: MIL made a nice break higher two weeks back, moving out of a 21 week ascending base on strong volume. It rallied to 80 and then tested, holding at the breakout point last week and then starting back up. Just a matter of time given its strength in the weak market.
Volume: 690.3K Avg Volume: 500.891K
BUY POINT: $80.28 Volume=700K Target=$91.95 Stop=$77.88
POSITION: MIL JP - Oct. $80c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/mil.html
Play Date: 07/26/2007
RIMM (Research in Motion--$215.66; -7.97; optionable): Handheld wireless communication devices. Splits 3:1 on 8/21/07
http://biz.yahoo.com/p/r/rimm.html
EARNINGS: 9-27-07
STATUS: Test 18 day EMA. Tougher close Friday as RIMM was sold down near the 18 day EMA (216.67), but this is still a really nice test, setting up the next break higher in its pre-split run. To recap: RIMM exploded higher in late June and continued higher for us into mid-July, making us a lot of money on that run. This week it has come back, dumping down toward the 18 day EMA, using the market selling to take a breather, holding above 220 on the lows. While the market struggled Thursday, RIMM tried to move higher on Apple's coattails but could not hold it. Showing a lot of pop still, and looking to move in as it makes the next break higher.
Volume: 7.923M Avg Volume: 7.295M
BUY POINT: Aggressive: 220.45; Over the 10 day EMA: $222.55 Volume=10M Target=$249.50 Stop=$219.22
POSITION: RFY IF - Sept. $230c (48 delta)
http://www.investmenthouse.com/ct/rimm.html
Play Date: 07/25/2007
SAY (Satyam Computer Services--$26.15; -0.40; optionable): Information technology
http://biz.yahoo.com/p/s/say.html
EARNINGS: Announced 7-20-07
STATUS: Breakout test. Gapped lower Friday, but a nice test of the 50 day EMA, showing a nice tight doji at that level on lower volume. Looking for the rebound from here and lowered the buy point as SAY can really move when it gets started. To recap: Coming back for a nice test of the 10 day EMA and onto the 50 day EMA following the nice break higher in early July that took it out of its 10 week flat base. It is making its second test of that move, using the market selling to consolidate and set up the next run to a new high. Excellent action with strong money flow still leading the way even with this pullback.
Volume: 1.083M Avg Volume: 879.389K
BUY POINT: New: $27.05 (orig. $27.88) Volume=1.4M Target=$32.32 Stop=$26.65
POSITION: SAY JE - Oct. $25c (72 delta) &/or Stock
http://www.investmenthouse.com/ct/say.html
Play Date: 07/25/2007
TRMB (Trimble Navigation--$33.00; -0.11; optionable): Navigation instruments
http://biz.yahoo.com/p/t/trmb.html
EARNINGS: 7/31/07
STATUS: Test 18 day EMA. Nice, nice action, showing the doji at the 18 day EMA yet again. TRMB is laying low in this selling, holding near support and just biding its time for the next break higher. Very nice. To recap: TRMB is giving us another entry point to this strong stock as it tests back to the 18 day EMA following a nice run from the mid-June breakout. Volume has swelled the past two sessions as TRMB made the test and started to bounce higher Wednesday. Excellent action in a market leader. Money flow is surging higher ahead of price and TRMB looks ready to follow it.
Volume: 755.964K Avg Volume: 657.158K
BUY POINT: $33.71 Volume=800K Target=$38.78 Stop=$32.86
POSITION: TUH KF - Nov. $30c (73 delta, 209 OI) &/or Stock
http://www.investmenthouse.com/ct/trmb.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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