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us stock market, top stock pick
Begin part 3 of 3
THE PLAYS
New Plays:
Upside:
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/ct/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/ct/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/ct/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/ct/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/ct/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/ct/ua.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/ct/cat.html
CONTINUING PLAYS:
Play Date: 08/15/2007
HMSY (HMS Holdings--$23.98; -0.04; optionable): Cost containment for government healthcare programs
http://biz.yahoo.com/p/h/hmsy.html
EARNINGS: Announced 8-2-07
STATUS: Breakout test. The range is tightening up over the 10 day EMA on low volume. The set of the base is just about over and a new break higher is coming. To recap: HMSY broke sharply higher on its earnings, clearing a 4 month base in one sharp move. It hit 25 on the high and then started working laterally as the 10 day EMA rises to catch up with it. Nice low volume as it works laterally, and now that the 10 day is catching up with it we are looking for a break higher on volume as it continues the move.
Volume: 159.633K Avg Volume: 319.782K
BUY POINT: $24.65 Volume=444K Target=$29.45 Stop=$23.11
POSITION: QHT LX - Dec. $22.50c (67 delta, low OI) &/or Stock
http://www.investmenthouse.com/ct/hmsy.html
Play Date: 08/23/2007
RADS (Radian Systems--$15.50; -0.02; optionable): Site management software
http://biz.yahoo.com/p/r/rads.html
EARNINGS: 7-26-07
STATUS: Breakout test. Nice hammer doji at the 10 day EMA (15.33) Friday on low volume as RADS completes its test as well and is ready for the next break higher. To recap: Nice low volume test of the 10 day EMA following a strong breakout. A nice 17 month double bottom with handle set up the move and it surged on strong volume. Excellent money flow is rallying higher ahead of price still, and we are looking to pick up RADS as it comes off the 10 day EMA test.
Volume: 230.169K Avg Volume: 310.863K
BUY POINT: $15.81 Volume=400K Target=$18.95 Stop=$14.95
POSITION: QRC AC - Jan. $15c (63 delta) &/or Stock
http://www.investmenthouse.com/ct/rads.html
Play Date: 08/22/2007
RVBD (Riverbed Technologies--$43.94; +0.50; optionable): Networking and communication equipment
http://biz.yahoo.com/p/r/rvbd.html
EARNINGS: 7-26-07
STATUS: Test 50 day EMA. After that strong surge Tuesday and Wednesday, RVBD is pausing to tap at the 50 day EMA (42.64) it just broke back through, tapping it on the Friday low and bouncing to close positive. This is what it needed to continue the move, and we are looking to move in as it resumes the bounce higher on stronger trade. To recap: Volume jumped as RVBD does the same thing off the 90 day SMA Tuesday and through the 50 day EMA on Wednesday. Money flow is surging higher and we are ready to move in as RVBD continues this solid break higher. A new issue in September 2006, RVBD is celebrating early for its first birthday.
Volume: 442.749K Avg Volume: 1.297M
BUY POINT: $44.25 Volume=1.4M Target=$53.95 Stop=$42.24
POSITION: UEX LI - Dec. $45c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/rvbd.html
Downside:
Play Date: 08/23/2007
BWA (Borg Warner--$82.84; +0.43; optionable): Auto parts
http://biz.yahoo.com/p/b/bwa.html
EARNINGS: 7-26-07
STATUS: Double top. After the higher volume reversal at the 90 day SMA (84.35) Thursday, BWA posted a modest, very low volume bounce to test. Still weak and still looking for it to roll over here and give us a nice downside run. To recap: Twin peaks, one in July, one in August, and then a nasty plunge lower two weeks back that took it down near the 200 day SMA (74.86). A rebound the past week and a stall at the 90 day SMA after bumping that level Wednesday and then turning down Thursday on a big, above average volume jump. First test of the crash down from the double top, and that means plenty of downside room here to make us money. A move to the target lands a 45%ish gain.
Volume: 258.7K Avg Volume: 428.683K
BUY POINT: $82.15 Volume=450K Target=$77.05 Stop=$83.78
POSITION: BWA VQ - Oct. $85p (-53 delta)
http://www.investmenthouse.com/ct/bwa.html
Play Date: 08/23/2007
JNS (Janus Capital Group--$28.07; +0.47; optionable): Asset management
http://biz.yahoo.com/p/j/jns.html
EARNINGS: 7-26-07
STATUS: Put. Bounced back Friday to tap at the 10 day EMA (28.17) on the high. Low volume so no real strength. High volume selling Thursday as it broke lower, so looking for the turn here to make our move in. To recap: JNS formed a 7 week head and shoulders top and broke lower two weeks back, gapping lower on strong volume. It sold below 26 and rebounded the past week, but has stalled at the 50 day EMA (28.58). Thursday JNS turned down and fell through the 90 day SMA on rising, average volume. Money flow is diving lower ahead of price. A move to the target lands a 46%ish gain.
Volume: 2.21M Avg Volume: 3.26M
BUY POINT: $27.38 Volume=3.4M Target=$24.78 Stop=$28.11
POSITION: JNS VF - Oct. $30p (-62 delta)
http://www.investmenthouse.com/ct/jns.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
top stock pick
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