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us stock market, stock recommendation
Begin part 3 of 3
THE PLAYS
Upside:
Play Date: 08/06/2007
ABB (ABB Ltd.--$23.58; +0.26; optionable): Automation technologies for utilities
http://biz.yahoo.com/p/a/abb.html
EARNINGS: 10-25-07
STATUS: Test 50 day EMA. Nice breakout in late April and then a run up the 18 day EMA (23.65); nice breakout and run. Now it is making a deeper test, coming back to the 50 day EMA (22.77) twice the past two weeks, making another test Monday on the intraday low and then rebounding nicely on rising volume to post a gain. ABB never got into trouble during the recent selling, using it to test its run and set up the next move. Looking for a continued strong bounce to give us the buy point on this top rated stock with great earnings growth rates.
Volume: 3.775M Avg Volume: 2.562M
BUY POINT: $24.32 Volume=3.8M Target=$28.45 Stop=$22.68
POSITION: ABB LX - Dec. $22.50c (64 delta) &/or Stock
http://www.investmenthouse.com/ci/abb.html
Play Date: 08/06/2007
AMED (Amedisys--$38.75; +0.54; optionable): Home health care
http://biz.yahoo.com/p/a/amed.html
EARNINGS: Announced 7-31-07
STATUS: Ascending base. Kind of a rangy pattern that was not immune to the market volatility, but AMED held the 90 day SMA in the selling and surged back up on its earnings report. Volume remains high this past week as AMED approaches the prior high. Strong money flow is leading the way higher. Ready to move in as AMED makes the break higher out of this base.
Volume: 784.38K Avg Volume: 396.186K
BUY POINT: $39.24 Volume=550K Target=$45.25 Stop=$37.38
POSITION: CQW LG - Dec. $35c (65 delta, 85 OI) &/or Stock
http://www.investmenthouse.com/ci/amed.html
Play Date: 08/06/2007
JCI (Johnson Controls--$116.06; +4.03; optionable): Auto parts. Splits 3:1 on 8-3-07
http://biz.yahoo.com/p/j/jci.html
EARNINGS: Announced 7-18-07
STATUS: Double bottom. After a nice gap higher in mid-April on earnings followed by a nice run up the 18 day EMA (115.09), JCI used the recent market selling to test that move and set up a new small base to make the next break and run higher. Despite the market JCI remains rock solid with surging volume Monday as it comes off the late July low, setting the short double bottom. Looking to move in as JCI continues higher after this nice test.
Volume: 1.879M Avg Volume: 1.177M
BUY POINT: $117.38 Volume=1.2M Target=$134.95 Stop=$113.38
POSITION: JCI JC - Oct. $115c (53 delta) &/or Stock
http://www.investmenthouse.com/ci/jci.html
Play Date: 08/06/2007
LRCX (Lam Research--$57.47; +2.65; optionable): Chip equipment
http://biz.yahoo.com/p/l/lrcx.html
EARNINGS: Announced 7-24-07
STATUS: Test breakout. Looking at LRCX as it tests and holds the 50 day EMA. LRCX broke out from an 8 month reverse head and shoulders base in mid-July, surging on strong volume to 60 on the high. In the market selling it has come back to test, a bit more than we expected at the 50 day EMA, but it held and then rebounded sharply Monday on stronger, above average volume. Nice recovery. Looking to move in as LRCX continues the move higher.
Volume: 3.565M Avg Volume: 3.114M
BUY POINT: $58.65 Volume=4.5M Target=$67.98 Stop=$55.97
POSITION: LMQ LK - Dec. $55c (64 delta) &/or Stock
http://www.investmenthouse.com/ci/lrcx.html
Downside:
Play Date: 08/06/2007
SPY (S&P Depository Receipts--$146.21; +2.41; optionable)
http://biz.yahoo.com/p/s/spy.html
STATUS: Put. SPY sold like a rock in water the past two weeks. It tried to hold the 200 day SMA (145.18) and it did until Friday when it was crushed. Monday of course it rebounded to take that level, and we are looking for SPY to move back up to the 10 day EMA (147.48) where it has hit on the highs the past week but has been unable to break through. After that test we will see if it turns back down and resumes the selling, giving us a buy. A move to the target lands a 40%ish gain.
Volume: 324.98M Avg Volume: 196.184M
BUY POINT: $146.95 Volume=295M Target=$142.55 Stop=$147.71
POSITION: SFB UR - Sept. $148p (-51 delta)
http://www.investmenthouse.com/ci/spy.html
Continuing downside:
Play Date: 08/04/2007
CXW (Corrections Corp of America--$29.78; -0.12; optionable): Private prisons
http://biz.yahoo.com/p/c/cxw.html
EARNINGS: 8-6-07 after the close
STATUS: Put. Big reach down Monday but then recovered in the afternoon market rebound. Low volume and showing another doji below resistance indicates that CXW is going to turn back down from here. To recap: 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: 720.8K 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.--$19.75; -0.28; optionable): Chemicals
http://biz.yahoo.com/p/g/gra.html
EARNINGS: 5-9-07
STATUS: Put. Reached down on Monday but then rebounded in the afternoon with the market on rising volume, closing modestly lower. Still looks weak below the 10 day EMA and we are ready to move in as GRA turns back down. To recap: 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: 1.263M 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
stock recommendation
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