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stock watch, stock recommendation
Begin Part 3 of 3
Best Plays:
1) COTT: Nice pullback on low volume.
2) CEY: A tight lateral move and 2 volume spikes.
3) BVN: Very strong volume on a move up from support.
4) URS: Ascending wedge after a cup with handle breakout.
5) ITG: Consolidating for another move up.
6) MIMS: Setting up for a fall
7) KROL: Still a nice wedge.
8) GOSHA: Ditto.
9) DLTR: At support on low volume in handle.
10) BRCD: Setting up for the put play.
New:
COTT (Cott Corp--$17.12; -0.05; no options): Soft Drinks
http://biz.yahoo.com/p/c/cott.html
STATUS: Pulling back from the top of a year-long uptrend, more specifically from a strong move up from the 50 day MVA that gathered steam at the top, on a breakout from an 8-week cup that did not form a handle. Volume has fallen off gradually along with price from the top at 18.07, down by Friday to 100,700 (avg. 313,000). With the shooting star doji at the bottom of the breakout test, holding above support at 17/10 day MVA at 16.93, looking for another strong move up. Money flow strong and ahead of price, and buying is solid. Target: 22
BUY POINT: 17.55 (hit 17.50 three times in the pullback) on 315,000 or higher volume.
Stop: 16.32 (7%)
http://www.investmenthouse.com/ct/cott.html
CEY (Certegy--$35.24; +0.01; optionable): Business Software
http://biz.yahoo.com/p/c/cey.html
STATUS: Broke out of a 4-month cup but immediately formed a flat base (almost a double bottom) consolidation which over the last week has tightened into a handle above support of the short term moving averages. The stock has thrown to large volume spikes in this "handle", a much larger one Wednesday but again on Friday (323,400; avg. 169,000). CEY tapped the 18 day MVA on the low of 34.85 then bounced back up with a tight doji. Looking for a breakout over 35.60. Strong money flow and high relative strength. Target: 43
BUY POINT: 35.70 on continued strong volume. Stop: 33.20 (7%)
POSITION: Stock and/or April $30 calls to buy (CEY DF).
http://www.investmenthouse.com/cd/cey.html
BVN (Compania De Minas Buena--$24.75; +1.01; no options): Gold
http://biz.yahoo.com/p/b/bvn.html
STATUS: A strong gold stock that tested back to the 10 day MVA on Thursday and Friday after a strong run off the 18 day MVA in late January. The stock on that run had tested the breakout from a shallow, 3.5-month cup base. BVN made a strong move Friday off of the 10 day MVA (23.87) with volume screaming up to 625,500 (avg. 146,000). Looking for a continued move up and new breakout after this pullback over the February high (25.88). Showing huge money flow and buying. Target: 30
BUY POINT: Aggressive: 24.90 on continued strong volume. Stop: 23.11 (7%)
POSITION: Stock.
http://www.investmenthouse.com/ct/bvn.html
SLGN (Silgan Holdings--$27.40; +0.05; no options): Packaging
http://biz.yahoo.com/p/s/slgn.html
STATUS: On strong earnings and an upgrade, SLGN broke out on a move off the 50 day MVA on January 31, and over the last week has tested the breakout, pulling back to potential support at the 10 day MVA on Friday (at 26.63). Volume was slightly lower but high at 412,400 (avg. 224,000). It is holding above the December high (26.16), reached on a breakout from an 8-month ascending wedge base. The earnings news really brought the stock to life. Showing big money flow and excellent buying, our target is 34.
BUY POINT: Aggressive: 27.75 on rising volume. Stop: 25.81 (7%)
POSITION: Stock.
http://www.investmenthouse.com/ct/slgn.html
ATVI (Activision--$25.57; +0.85; optionable): Software
http://biz.yahoo.com/p/a/atvi.html
STATUS: In a base of nearly 8 months (previous high is 27.29) and since early November forming a kind of ascending wedge pattern (with an aberrant high, one could say, in December at 27.91). Thus, not a perfect wedge but it has the characteristic of the higher lows (November, January and February) and relatively flat top. Friday the stock bounced off the up trendline that connects those lows, and moved back over the 50 day MVA (25.21). Volume was low, down to 1.1 million (avg. 2.1 million), but if we can get a hold at this major support, will look for a move up from here and breakout over the January closing high at 27.52. ATVI reached that price on January 24 when it gapped up and climbed on a strong earnings report; it pulled back and did not clear the overall pattern, but as the pattern tightens we will look for that move. Strong money flow (ahead of price) and buying. Target: 34
BUY POINT: Aggressive: 26.30 on volume of 2.2 million or higher. Stop: 24.46 (7%)
Breakout: 28.64 on volume of 2.8 million or higher. Stop: 26.64 (7%)
POSITION: Stock and/or May $22.50 calls to buy (AQV EX)
http://www.investmenthouse.com/ct/atvi.html
URS (Urs Corp--$29.35; -0.25; no options): Diversified Services
http://biz.yahoo.com/p/u/urs.html
STATUS: Formed an ascending wedge after a breakout from a 7-month cup with handle. This could be a very bullish combination of patterns, and as the pattern tightens up nicely above the 18 day MVA (29.04) we are looking for a breakout. Volume popped up to average levels on Friday (106,200), with the stock showing a tight doji on the slight loss. Upper resistance is at 30.18. High money flow and relative strength. Target: 36
BUY POINT: 30.30 on volume of 143,000 or higher. Stop: 28.28 (7%)
POSITION: Stock.
http://www.investmenthouse.com/ct/urs.html
ITG (Investment Tech--$43.12; +0.15; optionable): Brokerage
http://biz.yahoo.com/p/i/itg.html
STATUS: ITG broke out of a 7-month flat base and then immediately formed another base, a double bottom with handle-type pattern, though the right side was completed a bit too fast. The stock made a strong breakout move on a gap over its 50 day MVA back on January 17 on a strong earnings release, and that formed the right side. Additionally, the handle looks like an ascending wedge, not the best kind of handle. Even with these characteristics, ITG is now consolidating after the strong move, tightening up with 4 dojis above the short term moving averages since Tuesday. Volume has been at overall below average levels throughout the new pattern, rising Friday to 198,700 (avg. 307,000). It can give us a good breakout and big move before it flares out. We are looking for a breakout over the 44 range, upper resistance. Money flow is strong and ahead of price, and buying is solid. Target: 50
BUY POINT: Breakout: 44.50 on volume of 461,000 or higher. Stop: 41.39 (7%)
POSITION: Stock and/or April $40 calls to buy (ITZ DH).
http://www.investmenthouse.com/ct/itg.html
HOLX (Hologic--$13.44; -0.15; optionable): Health Services
http://biz.yahoo.com/p/h/holx.html
STATUS: In a pennant formed after a breakout from another pennant 2 months in length (itself formed subsequent to a 19-month flat base breakout). It forms up the pennant and then blasts off to the next level. It has pulled back to the 18 day MVA where price is now settling down and trying to tighten up, as volume slides increasing below average. It was down to 52,400 Friday (average is 218,000). The company reported good earnings on the 5th of this month, but has continued to hold its position, testing resistance at the 14 range 5 of the last 6 days. We are looking for a strong move back up and breakout over the January high near 15. Excellent money flow and buying. Target: 18
BUY POINT: Aggressive: 14.20 on volume of 225,000 or higher. Stop: 13.21 (7%)
POSITION: Stock and/or March $12.50 calls to buy (QHX CV; best delta at 0.69 at Friday's close.).
http://www.investmenthouse.com/ct/holx.html
New Puts:
UTSI (Utstarcom--$22.05; -0.15; optionable): Telecom: Wireless
http://biz.yahoo.com/p/u/utsi.html
STATUS: The stock broke down below the 50 day MVA (26.72) at the end of January, consummating a head and shoulders pattern. It then followed up as it breached the 200 day MVA (22.77) Wednesday on strong volume. The move slackened the next 2 days, but on a relief bounce UTSI continues to find resistance at the 200 day. Volume by Friday had dropped off sharply to 1.6 million (avg. 2 million) from that on the selling (6.6 million). We are looking for a failure here to take back the support, and on a strong move down (kiss good-bye), look for another hefty drop, this time to the range of the October lows at 16.
BUY POINT: Aggressive: 21.25 on strong, above average volume.
POSITION: May $30 puts to buy (UON QF).
http://www.investmenthouse.com/ct/utsi.html
TLB (Talbots--$33.25; +0.35; optionable): Apparel
http://biz.yahoo.com/p/t/tlb.html
STATUS: TLB broke down Monday, out of a double top pattern, when it sold below the 50 day MVA (35.06) on strong volume. Volume did fall back for the next 2 days, but spiked up to very strong levels on Thursday as price fell again despite news of stronger same store sales. It held up Friday on lower volume, showing a hammer doji off a tap of 32.44 on the low (volume 364,600; avg. 453,000). We are looking for a move up and test of 34, or the 50 day MVA then another fall, watching the 32 level for potential support. Initial target: 28
BUY POINT: Aggressive on the kiss good-bye: 34.75 on 455,000 or higher.
POSITION: March $40 puts to buy (TLB OH).
http://www.investmenthouse.com/ct/tlb.html
VRTS (Veritas--$40.13; +3.47; optionable): Software
http://biz.yahoo.com/p/v/vrts.html
STATUS: The stock broke below the 50 day MVA after losing the 200 day a few days earlier, and sold down to 35 by Thursday. From there it bounced back up from a doji, but volume was lower as with the market, and VRTS closed just under its 10 day MVA (40.33). On a continued move up, resistance is at the December low (41.09) and the 50 day MVA (41.88). From there we will look for a move back down for taking aggressive put positions. Volume 14.8 million (avg. 12.3 million). Initial target: 30
BUY POINT: Aggressive on the kiss good-bye: 41.50 on strong and rising volume. From here: 39.75 on strong and rising volume.
POSITION: March $50 puts to buy (VIV OJ).
http://www.investmenthouse.com/ct/vrts.html
MIMS (Mim Corp--$15.52; -0.25; optionable): Health Services
http://biz.yahoo.com/p/m/mims.html
STATUS: After a nice uptrend in December and half of January, MIMS topped just under 22 and then plunged back below its 50 day MVA and remaining below that resistance for the last week. Volume has been lower with the stock moving back up to test the most recent break of support, Friday's intraday high at 16.50 tapping near the 50 day MVA (16.75). The stock opened at 16.04, rallied, but then reversed on rising volume (1.16 million; avg. 744,000), never making the 50 day. The higher volume reversal below resistance indicates the selling has started anew. Target: 12.
BUY POINT: From here: Below 15 on continued rising volume. From the 50 day MVA ("kiss good-bye"): 16.30 on continued rising volume.
POSITION: April $22.50 puts to buy (OQX PX).
http://www.investmenthouse.com/ct/mims.html
CONTINUED PLAYS:
Continued Puts:
NVLS (Novellus--$38.89; +1.82; optionable): Semiconductor
http://biz.yahoo.com/p/n/nvls.html
STATUS: NVLS bounced back up from where it closed Thursday, after that day's strong selling that smashed the 50 day MVA (40.32). We are looking for a continued move up to test that level, now resistance, and on a move back down will look at taking aggressive positions. Initial target: 31
BUY POINT: "Kiss good-bye" (aggressive): 39.50 on rising volume (Friday's volume was 8.9 million; avg. 6.4 million).
POSITION: March $45 puts to buy (NLQ OI).
http://www.investmenthouse.com/ct/nvls.html
BRCD (Brocade--$32.63; +2.04; optionable): Telecom
http://biz.yahoo.com/p/b/brcd.html
STATUS: Very similar to NVLS. After breaking the 200 day MVA on strong volume Thursday, BRCD behaved Friday exactly the way we anticipated, making a lower volume bounce back up to test that broken support. The stock closed just under the resistance (32.99) on lower volume. On a move back down (the kiss good-bye), we will look at taking the aggressive positions outlined in the Thursday report. BRCD formed a double top December through early January, and danced around the 50 day MVA for about three weeks before finally breaking that support in earnest just three days ago. Target is 26 on the move back through the 30 level consolidation. Volume lower at 13.6 million (avg. 14.7 million).
BUY POINT: 31.75 on rising volume.
POSITION: March $45 (UBF OI) or April $50 (UBF PJ) puts to buy.
http://www.investmenthouse.com/ct/brcd.html
TEST OF BREAKOUT:
FAST (Fastenal--$70.37; +0.21; optionable): Retail
http://biz.yahoo.com/p/f/fast.html
STATUS: Broke out of the short reverse head and shoulders last week in a good move which was cut short; the stock closed with three dojis the remainder of the week, tapping Friday down to a test of the 18 day MVA (67.92) and the highs in the pattern. On the move back up from that test, volume was on the rise (284,800; avg. 229,409) so we will be interested to see if FAST can give us a strong move from this test. Target: 83
BUY POINT: Hit the aggressive buy point Friday at 70. Riding those positions, and new buy points can be taken on a move over Wednesday's high (71.50).
POSITION: May $50 or $60 calls to buy (FQA CJ or CL).
http://www.investmenthouse.com/ct/fast.html
RTN (Raytheon--$38.00; +0.52; optionable): Aerospace/Defense
http://biz.yahoo.com/p/r/rtn.html
STATUS: On its test of the breakout (from a 15-week flat base "pullback" into the 50 day MVA), RTN found support at the 10 day MVA for a 2-day bounce, but the move has been on decreasing volume (lower Friday to 1.6 million; avg. 2.2 million). We are looking for a new breakout over the February high (39.25), reached on the strong run up from the 50 day MVA. RTN shows strong money flow, high relative strength, and good buying. Target is 45.
BUY POINT: Hit aggressive buy point at 37.60, so riding those positions as the stock holds the 10 day MVA. New buy points over 38.90 on strong volume.
POSITION: Aggressive: Stock and/or March or May $35 calls to buy (RTN CG or EG).
http://www.investmenthouse.com/ct/rtn.html
USAI (Usa Networks--$29.03; +0.47; optionable): Media
http://biz.yahoo.com/p/u/usai.html
STATUS: Continues to test its breakout from the 21-week cup with handle pattern when USAI ran up to 30.11 on an intraday spike. USAI hit our aggressive buy point at 29.30 for a move up in the test, but pulled off the high of 29.30. We like the higher volume on the move (4.9 million; avg. 3.5 million), and will watch for a continued move up after the test. Still strong money flow and high relative strength, good buying. Target: 33
BUY POINT: Riding positions on a continued hold of support. From here, positions over 29.45 on continued rising volume.
POSITION: Stock and/or April $25 calls to buy (QTH DE).
http://www.investmenthouse.com/ct/usai.html
WEDGES, PENNANTS, and FLYING PLATEAUS (AND FLAGS): These are some of our favorite patterns as the moves can be explosive. In this market, however, we need to see the move on the breakout on strong volume.
KROL (Kroll--$18.60; -0.08; optionable): Diversified Services
http://biz.yahoo.com/p/k/krol.html
STATUS: Formed a 3-week ascending wedge as a test of the breakout from a larger, 8-week pennant type pattern. The 'double pattern' developed after KROL's September through mid-November strong uptrend. Friday we got another test of the 18 day MVA on the low of 18.13 with the stock giving a small bounce (despite the loss on the day) even as volume slipped back down to very low levels (31,600; avg. 263,000). Continue to look for a breakout; KROL has outstanding money flow and strong buying. Target is 23.
BUY POINT: 19.34 on volume of 356,400 or higher. Stop: 18 (7%)
POSITION: Stock and/or March $15 calls to buy (KRQ CC; low open interests).
http://www.investmenthouse.com/ct/krol.html
GOSHA trades on less than 100,000 average daily volume:
GOSHA (OshKosh B'gosh--$42.05; +0.48; no options): Kid's clothes
http://biz.yahoo.com/p/g/gosha.html
STATUS: Waiting, waiting, waiting. Holding the ascending wedge with the tail tightening up and holding above the 18 day MVA and below resistance at 42.15. Getting a good squeeze in now, and we continue to look for a breakout. This pattern formed after a cup with handle breakout (mid-November) and we are partial to this combination of patterns. Wedges, too, can give explosive breakouts. Volume was sharply down to a very low 12,500 on Friday (avg. is 44,500). Thursday morning the company reported lower earnings for the 4th quarter, but expects improvement in the coming quarter. The news didn't seem to disturb the pattern, as it continues to show good price/volume action and volume spikes. Money flow remains high. Target is 52.
BUY POINT: 43.10 on minimum breakout volume of 60,000). Stop: 40.08 (7%)
POSITION: Stock.
http://www.investmenthouse.com/ct/gosha.html
BASING/TRADING RANGES:
DLTR (Dollar Tree Stores--$31.29; -0.06; optionable): Retail
http://biz.yahoo.com/p/d/dltr.html
STATUS: Holding the 18 day MVA (31.19) in the handle to its 25-week cup, and we like the continued declining volume in the handle which by Friday was down to 377,800 (avg. 1.2 million). Showing a tight doji at the support, and combined with the low volume, we continue to look for a good move up and breakout over the handle high at 33.96. It has moved just under the December closing high at 31.58, but as long as it holds the 18 day MVA on low volume can give us the move. DLTR is showing solid buying, and relative strength is ahead of price. Target: 41
BUY POINT: Breakout: 34.06 on volume of 1.8 million or better. Stop: 31.68 (7%). Aggressive: If it can hold the 18 day, a move back over 33 on above average volume. Stop: 30.78.
POSITION: Stock and/or May $25 or $30 calls to buy (DQO CE or EF).
http://www.investmenthouse.com/ct/dltr.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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