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us stock market, stock recommendation
Begin part 3 of 3
THE PLAYS
Upside:
Play Date: 08/04/2007
BIDU (Baidu.com--$198.50; -4.17; optionable): Chinese internet search
http://biz.yahoo.com/p/b/bidu.html
EARNINGS: Announced 7-25-07
STATUS: Reverse head and shoulders. After scoring us a huge gain on its last run BIDU looks to be set up to give us another run. It gapped higher on earnings in late July, rebounding from a mid-month sell off into the numbers. It has come back to test that move, holding at the 18 day EMA last week, making a higher low at near support on very low, below average volume. That shows us no one is selling and that BIDU is setting up for the next run higher. We note that many of the Chinese stocks did not participate in the late week selling but started to recover (e.g. CTRP). These are the stocks we were taking about, those that held up in the selling and showed great relative strength. Looking for the BIDU bounce to get back in for the next massive run.
Volume: 2.393M Avg Volume: 3.08M
BUY POINT: $200.45 Volume=4M Target=$248.00 Stop=$195.22
POSITION: BDU LT - Dec. $200c (52 delta)
http://www.investmenthouse.com/ci/bidu.html
Play Date: 08/04/2007
CNH (CNH Global--$52.18; -0.37; optionable): Farm and construction machinery
http://biz.yahoo.com/p/c/cnh.html
EARNINGS: 10-22-07
STATUS: Test 50 day EMA. CNH is in a continuing uptrend. It broke out from a 9 week flat base in late April and rallied up the 18 day EMA (53.61), making a series of bounces up that near support, typical of a strong stock making a breakout run. After that nice run it needed a test, and it used the recent market selling to come back to the 50 day EMA (51.29) for a bit of R&R. Strong stocks will do that after a breakout. Still strong as this pullback to support in a weak market shows. Just waiting for it to show us a bounce higher on strong volume to give us the buy point.
Volume: 362.8K Avg Volume: 386.165K
BUY POINT: $54.21 Volume=550K Target=$62.45 Stop=$51.15
POSITION: CNH LJ - Dec. $50c (66 delta) &/or Stock
http://www.investmenthouse.com/ci/cnh.html
Play Date: 08/04/2007
FCX (Freeport McMoran--$86.14; -4.42; optionable): Copper
http://biz.yahoo.com/p/f/fcx.html
EARNINGS: Announced 7-25-07
STATUS: Test 50 day EMA. Another stock that made us some excellent money on its run higher this year and over the past two weeks has used the market selling to come back to test the 50 day EMA to set up for its next move. Showed some high volume on the initial selling but that backed off and it finished the test on nice below average volume, dropping to the 50 day on Friday. The market sold on volume but FCX tested this key support on low trade. Looking for FCX to hold this level and give us a high volume bounce off of this key support to give us a buy. The big institutions use the 50 day EMA as a point to buy or sell, and with the volume it showed on the test it looks as if they are going to be buyers once again.
Volume: 9.444M Avg Volume: 9.824M
BUY POINT: $86.88 Volume=12M Target=$99.95 Stop=$85.21
POSITION: FCX KQ - Nov. $85c (60 delta) &/or Stock
http://www.investmenthouse.com/ci/fcx.html
Play Date: 08/04/2007
HSC (Harsco Corp.--$54.55; -1.13; optionable): Steel and iron products
http://biz.yahoo.com/p/h/hsc.html
EARNINGS: Announced 7-26-07
STATUS: Ascending base. Despite the market weakness, HSC broke higher off the 50 day EMA (52.52) Wednesday and Thursday, rallying on solid, above average volume. Thursday it made the breakout from its 13 week base that used the 50 day EMA as support, making higher and higher lows off that level. Friday it gapped higher, trying to continue the break but it rolled over and sold back some. Still looks super and ready to continue the breakout move.
Volume: 912.3K Avg Volume: 473.005K
BUY POINT: $55.35 Volume=700K Target=$63.75 Stop=$53.48
POSITION: HSC JK - Oct. $55c (49 delta, low OI) &/or Stock
http://www.investmenthouse.com/ci/hsc.html
Downside:
Play Date: 08/04/2007
CXW (Corrections Corp of America--$29.90; +0.35; optionable): Private prisons
http://biz.yahoo.com/p/c/cxw.html
EARNINGS: 8-6-07 after the close
STATUS: Put. CXW formed a 7 week umbrella top in June and early July follow a long run higher. It tried to make the next break higher but it faded to the 50 day EMA. It was not able to hold and broke sharply lower to end July. It fought back up to the 90 day SMA (30) on Friday, rallying intraday to the 50 day EMA. It could not hold, however, and rolled back down, closing below the 90 day as volume jumped back up well above average. That kind of reversal on volume shows the sellers moved in after the rebound, indicating that CXW is ready to turn back down and sell some more. Looking for a move lower to enter to the downside. A run to the target lands a 43%ish gain.
Volume: 1.304M Avg Volume: 846.722K
BUY POINT: $29.72 Volume=900K Target=$27.65 Stop=$30.62
POSITION: CXW UF - Sept. $30p (-42 delta)
http://www.investmenthouse.com/ci/cxw.html
Play Date: 08/04/2007
GRA (W.R. Grace & Co.--$20.03; -0.67; optionable): Chemicals
http://biz.yahoo.com/p/g/gra.html
EARNINGS: 5-9-07
STATUS: Put. Chemicals were hot, but now they are in trouble as many stocks in the sector roll over. GRA formed a 20 week top, but the outcome was in doubt until it broke lower in late June and then collapsed in late July with a big run lower that crashed the 200 day SMA. It rebounded last week, but could only make it to the 10 day EMA (21.05) on the Thursday intraday high before fading and sliding back Friday. After this test of the collapse GRA looks ready to head back down. We are looking to buy into that turn lower with some puts and ride it to the target. That move lands us a 47%ish gain.
Volume: 1.035M Avg Volume: 821.672K
BUY POINT: $19.78 Volume=1.2M Target=$17.72 Stop=$20.55
POSITION: GRA UD - Sept. $20p (-43 delta)
http://www.investmenthouse.com/ci/gra.html
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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us stock market
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