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us stock market, stock recommendation
Begin part 3 of 3
THE PLAYS
New 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/ct/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/ct/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/ct/fcx.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/ct/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/ct/gra.html
Play Date: 08/04/2007
XLNX (Xilinx--$24.35; -0.97; optionable): Semiconductors
http://biz.yahoo.com/p/x/xlnx.html
EARNINGS: Announced 7-19-07
STATUS: Put. Made a lower high in July as it rallied into its earnings report but then lost its footing after that and tumbled lower, crashing the 200 day SMA (26.35) the last week of July. It tried to consolidate some at 25 where there is some price support, but it could not hold and slumped lower again Friday as volume moved back above average. The inability to make an upside test after the selling shows a lot of weakness and we are ready to move in on the downside as XLNX continues lower. A move to the target lands a 40%ish gain.
Volume: 7.932M Avg Volume: 6.127M
BUY POINT: $24.24 Volume=6.2M Target=$23.00 Stop=$24.57
POSITION: XLQ UE - Sept. $25c (-52 delta)
http://www.investmenthouse.com/ct/xlnx.html
CONTINUING PLAYS:
Play Date: 08/01/2007
CTXS (Citrix Systems--$35.74; -1.13; optionable): Internet info access software
http://biz.yahoo.com/p/c/ctxs.html
EARNINGS: 7-18-07
STATUS: Breakout test. Very low volume Friday as CTXS pulled back, closing just below the 18 day EMA (36.03) but still looking solid in its breakout test. Looking for it to hold near this level and then resume the breakout move to give us the entry point. To recap: CTXS is working on a nice 15 month cup base, and after gapping higher on earnings it has used the market selling to test, forming a handle to that base. It has filled the gap on earnings, showing a doji Wednesday at the 18 day EMA. Like how it has filled the gap and rebounded to hold near support as most stocks in the market broke apart. Excellent money flow and love this set up for a break higher to jump all over.
Volume: 1.596M Avg Volume: 2.848M
BUY POINT: $37.65 Volume=3.2M Target=$44.95 Stop=$35.55
POSITION: XSQ LG - Dec. $35c (64 delta) &/or Stock
http://www.investmenthouse.com/ct/ctxs.html
Play Date: 08/02/2007
MR (Mindray Medical Intl.--$31.63; +0.52; optionable): Chinese medical instruments
http://biz.yahoo.com/p/m/mr.html
STATUS: Double bottom w/handle. Still setting up very well for the next breakout. Indeed on Friday MR rallied higher on rising, above average volume, a definite counter market move. Like that strength, but as noted with BIDU, the China stocks are looking stronger. To recap: MR made us some money on its last run and it also took some back when it gapped lower in mid-July, testing down to the 50 day EMA (29.75). It bounced then faded back to the 50 day EMA to end July. It held there and formed the second leg to the short 7 week pattern. Nice surge higher then a test back to the 18 day EMA to form the handle this month. Good price/volume action (up on the up days, down on the down days) shows accumulation. Looking for the breakout over the prior highs to give us the entry point.
Volume: 888.6K Avg Volume: 698.434K
BUY POINT: $32.22 Volume=750K Target=$38.45 Stop=$29.96
POSITION: MR JF - Oct. $30c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/mr.html
Play Date: 08/01/2007
PKI (Perkinelmer--$28.05; -0.49; optionable): Medical instruments
http://biz.yahoo.com/p/p/pki.html
EARNINGS: Announced 7-26-07
STATUS: Breakout test. Volatile to end the week but in a range, not giving up any ground in the market selling. Always love that kind of show of strength, and we are just waiting for PKI to make the move for us this week. To recap: Nice surge out of a 7 week ascending base on the earnings news. It showed amazing resilience during the selling, tapping at the 10 day EMA (27.54) on the Wednesday low and bouncing positive. Solid volume. Looks ready to surge higher off of this test and give us a nice buy point.
Volume: 1.092M Avg Volume: 744.791K
BUY POINT: $28.42 Volume=1.1M Target=$32.89 Stop=$27.08
POSITION: PKI LE - Dec. $25c (72 delta, low OI) &/or Stock
http://www.investmenthouse.com/ct/pki.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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us stock market
stock recommendation
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