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us stock market, top stock pick
Begin part 3 of 3
THE PLAYS
New 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/ct/abb.html
Play Date: 08/06/2007
HSIC (Henry Schein--$56.70; +1.87; optionable): Medical equipment
http://biz.yahoo.com/p/h/hsic.html
EARNINGS: 8-7-07
STATUS: Cup w/handle breakout. HSIC is back on because it is making the move, coming off the 50 day EMA test from last week and moving higher on strong, above average volume. Nice breakout and move to a new high. Very solid on all fronts, technical and fundamentally. Looks very good and looking to pick it up as it continues and then some more on the test.
Volume: 580.925K Avg Volume: 397.752K
BUY POINT: $56.89 Volume=450K Target=$63.65 Stop=$54.65
POSITION: HQE JK - Oct. $55c (55 delta) &/or Stock
http://www.investmenthouse.com/ct/hsic.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/ct/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/ct/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/ct/spy.html
CONTINUING PLAYS:
Play Date: 08/04/2007
CNH (CNH Global--$52.18; 0.00; optionable): Farm and construction machinery
http://biz.yahoo.com/p/c/cnh.html
EARNINGS: 10-22-07
STATUS: Test 50 day EMA. Nice doji at the 50 day EMA Tuesday on low volume as CHN continues to set up for the move higher. Continues to do its own thing in the market, setting up at its own pace. To recap: 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: 378.5K 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: 08/01/2007
CTXS (Citrix Systems--$36.67; +0.93; optionable): Internet info access software
http://biz.yahoo.com/p/c/ctxs.html
EARNINGS: 7-18-07
STATUS: Breakout test. Nice hold at the 18 day EMA though the bounce Monday was on low volume. Still a very nice set up for the continued run higher. 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: 2.027M 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.--$30.98; -0.65; optionable): Chinese medical instruments
http://biz.yahoo.com/p/m/mr.html
STATUS: Double bottom w/handle. Nice reach lower intraday Monday, tapping the 50 day EMA on the low and rebounding on lower volume. Still a very good pattern setting up for the break higher. 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: 698.5K 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--$27.96; -0.09; optionable): Medical instruments
http://biz.yahoo.com/p/p/pki.html
EARNINGS: Announced 7-26-07
STATUS: Breakout test. Quite volatile still but Monday showed a nice doji, tapping the 18 day EMA on the low and rebounding to close flat. A nice surge in volume as it tested and recovered. Crouching here at near support for the break higher. 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 (27.82) 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: 1.381M 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
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/ct/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/ct/gra.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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