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us stock market, stock recommendation
Begin part 3 of 3
THE PLAYS
Upside: All at the head of the market in terms of fundamentals growth rates and technical position. We are still expecting another downside leg, but these leaders are in such good shape they suggest that may not be the case, or at least they are not going to be diving with it.
Play Date: 08/25/2007
BIDU (Baidu.com--$203.21; 0.00; optionable): Chinese internet search
http://biz.yahoo.com/p/b/bidu.html
EARNINGS: Announced 7-25-07
STATUS: Double bottom w/handle. Volatile as can be the past 6 weeks, but that is what a double bottom pattern is. After a tremendous May to early July move that made is a lot of money, BIDU turned volatile, fading to earnings, gapping higher on the results, then fading back again in the market selling. Fade? Breakneck plunge is more like it. It recovered, and to end last week it started a lateral, modestly lower fade on lower trade, starting to form the handle. Nice set up for another screaming run higher though it likely will take another couple of sessions to finish handle. Whether it does or takes off from here we are going to be ready to move in. This is one of the horses of the tech sector, and even as the overall market struggles it has moved well. Volatile as hell, so keep the Pepto at hand, but when it runs it knows the way.
Volume: 3.096M Avg Volume: 3.513M
BUY POINT: $205.55 Volume=4M Target=$249.90 Stop=$196.22
POSITION: BDU LB - Dec. $210c (51 delta)
http://www.investmenthouse.com/ci/bidu.html
Play Date: 08/25/2007
DRYS (Dryships--$64.60; +2.65; optionable): Shipping
http://biz.yahoo.com/p/d/drys.html
EARNINGS: 8-21-07
STATUS: Double bottom. Gapped higher on the earnings results, making the break from a 6 week base that formed using the 50 day EMA (52.42) as support for the second leg. Worked laterally Thursday and Friday but is at the late July peak and may not form a handle before breaking to a new all-time high. Solid 3:1 accumulation in the base (3 up price weeks on rising volume to 1 down price weeks on rising volume) shows plenty of buying during the base, and that is setting up the next breakout and run higher.
Volume: 1.804M Avg Volume: 1.269M
BUY POINT: $65.55 Volume=1.9M Target=$78.75 Stop=$62.89
POSITION: DQR AM - Jan. $65c (52 delta) &/or Stock
http://www.investmenthouse.com/ci/drys.html
Play Date: 08/25/2007
RIMM (Research in Motion--$81.86; +1.40; optionable): Blackberry communication devices, etc.
http://biz.yahoo.com/p/r/rimm.html
EARNINGS: 9-27-07
STATUS: Breakout test. After a plunge during the selling that took RIMM below its 50 day EMA, RIMM bounced right back, moving past the old high and breaking to a new one. Unlike the rest of the market, volume was not light; volume surged as RIMM jumped right back up. It peaked Wednesday and reversed, fading into the Friday open. After another lower open to end the week it rebounded to close positive. It may not test anymore. Ready to take positions as it continues higher from here. If it fades some more, all the better; we will look for a test toward the 10 day EMA (77.20) and adjust the buy point accordingly. In other words, if it fades toward the 10 day EMA and then starts to bounce we will move in as it starts higher.
Volume: 13.084M Avg Volume: 25M
BUY POINT: $82.55 Volume=30M Target=$99.00 Stop=$77.11
POSITION: RFY LV - Dec. 83.38c (48 delta) &/or Stock
http://www.investmenthouse.com/ci/rimm.html
New buy points on current positions:
Play Date: 08/25/2007
CMED (China Medical Technologies--$33.06; +0.90; optionable): Chinese medical instruments
http://biz.yahoo.com/p/c/cmed.html
EARNINGS: 8-28-07
STATUS: Double bottom. CMED came under fire in the selling, but twice it held at the 90 day SMA (28.65) on the intraday low and bounced right back up. It showed some great volume Wednesday as it gapped up through the 50 day EMA (30.90). That took it past the June closing high and thus is breaking up the head and shoulders that was trying to form. Stepping back and looking big picture, the past 6 weeks is a handle to a much larger 19 month cup with handle base. Money flow is huge and moving higher. Some more volume similar to the Wednesday upside indicates a buy.
Volume: 456.208K Avg Volume: 777.918K
BUY POINT: $34.05 Volume=1.2M Target=$41.95 Stop=$31.89
POSITION: QCY AF - Jan. $30c (69 delta) &/or Stock
http://www.investmenthouse.com/ci/cmed.html
Play Date: 08/25/2007
GRMN (Garmin Ltd.--$104.00; +2.70; optionable): GPS devices
http://biz.yahoo.com/p/g/grmn.html
EARNINGS: 8-1-07
STATUS: Reverse head and shoulders. GRMN has already given us a good gain and we took some of it. Now it is setting up to give us another buy point with this three week reverse head and shoulders pattern. Super solid, very strong.
Volume: 2.139M Avg Volume: 2.977M
BUY POINT: $105.22 Volume=4M Target=$120.95 Stop=$99.88
POSITION: RZJ AA - Jan. $105c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/grmn.html
Play Date: 08/25/2007
UA (Under Armour--$64.99; +0.01; optionable): Sportswear
http://biz.yahoo.com/p/u/ua.html
EARNINGS: 7/31/07
STATUS: Reverse head and shoulders. Another stock that is a strong leader in earnings growth and also used the recent selling to set up a positive upside pattern, ready to break it higher again. Excellent surge off of the 50 day EMA after the selling, the dip forming the head in the short 4 week base. It came back to end the week, tapping a the 10 day EMA (64.45) on the low and bouncing positive on Friday. Money flow is huge and we are looking forward to it leading the stock higher once more. Ready to move higher off this near support and give us that next entry point.
Volume: 313.6K Avg Volume: 1.492M
BUY POINT: $67.24 Volume=2.2M Target=$76.95 Stop=$64.22
POSITION: UA AM - Jan. $65c (61 delta) &/or Stock
http://www.investmenthouse.com/ci/ua.html
Play Date: 08/25/2007
ZUMZ (Zumiez--$46.42; +0.56; optionable): Teen apparel
http://biz.yahoo.com/p/z/zumz.html
EARNINGS: 8-22-07
STATUS: Breakout test. Gapped higher ahead of its strong earnings, and that capped the week long run off of the 50 day EMA test during the market selling. That gave our current position a nice boost and we took some of that gain. It faded modestly after the earnings, then tested lower Friday near the 10 day EMA at 440 before rebounding positive. Like that it has already filled the gap. That sets up more upside and we are looking to use the start of the next leg of the run to pick up more positions.
Volume: 711.269K Avg Volume: 811.937K
BUY POINT: $46.88 Volume=1M Target=$53.95 Stop=$45.05
POSITION: QUY BI - Feb. $45c (61 delta) &/or Stock
http://www.investmenthouse.com/ci/zumz.html
Downside:
Play Date: 08/25/2007
CAT (Caterpillar--$76.32; +1.15; optionable): Heavy machinery
http://biz.yahoo.com/p/c/cat.html
EARNINGS: 10-19-07
STATUS: Put. Hate to bet against CAT, but the pattern is saying it is time to do so. It formed a 9 week head and shoulders and broke lower on a jump in volume two Wednesdays back. It rebounded with the market and has risen to the 10 and 18 day EMA, reaching toward the 18 day (76.65) on the Thursday and Friday highs. Volume faded as it rose, indicating no real backing for the move. Looking for it to roll over from this test and looking to move in as it breaks back through the 10 day EMA (75.64) to the downside. Need to see a bit more volume to show the sellers are again outrunning the buyers. A move to the target lands a 43%ish gain ($118/contract).
Volume: 3.483M Avg Volume: 7.081M
BUY POINT: $75.42 Volume=7M Target=$72.21 Stop=$76.75
POSITION: CAT VO - Oct. $75p (-40 delta)
http://www.investmenthouse.com/ci/cat.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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