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stock recommendation, stock investment information
Begin Part 3 of 3
Covered Call:
RJR (RJ Reynolds--$62.64; -0.06; optionable): Tobacco
http://biz.yahoo.com/p/r/rjr.html
STATUS: Broke out of a 17-week cup base that is part of a 9.5-month wedging style base. The stock cleared the highs at the start of the shorter base (at 61.23) on a strong volume move Wednesday, after RJR had formed weak, upward-drifting handle to the shallow cup. The breakout from that handle was on weaker volume than the stock had seen on a jump from the 18 day MVA a week ago. Subsequent to the breakout RJR has pulled back for 2 days, showing dojis, and while it may try to move up again from here, we are looking for a failed attempt due to the weak breakout for a drop back to test the 18 day MVA (60.42). For that move we will look at selling covered calls on long-term stockholdings, buying them back upon reaching the support. Volume was lower at 304,500 (avg. 455,000).
BUY POINT: From here: 62.40 on rising volume.
POSITION: May $55 calls to sell (RJR EK).
http://www.investmenthouse.com/ct/rjr.html
New Puts:
NVDA ($57.35; -4.81; optionable): Semiconductor
http://biz.yahoo.com/p/n/nvda.html
STATUS: Accounting issues and the stock gapped down on the opening price (59.30), great earnings out Thursday unable to hold things up. Volume was huge (33.2 million; avg. 8.7 million), and we are looking for more downside. We may get a move back up toward 60 in a reflex move. When it fails there we will look at taking positions to the downside. Initial target will be at 50; below that, the 200 day MVA at 48.08).
BUY POINT: Test of 60: 59 on continued strong volume.
POSITION: June $65 puts to buy (RVU RM).
http://www.investmenthouse.com/ct/nvda.html
EMLX (Emulex--$39.38; -0.69; optionable): Computer Peripherals
http://biz.yahoo.com/p/e/emlx.html
STATUS: Friday EMLX hit our target for the put play introduced February 2 with a buy point at 45. Now the stock looks ready to follow through on a breakdown from the double top pattern that was formed in February, having broken support of the 50 day MVA on Thursday and adding to the loss Friday. Volume was rising as well (11 million; avg. 8.9 million) and EMLX bounced from the low of 38.29. However, we are looking for a failure to move back over the 50 day MVA (40.20), and on a continued drop look for a fall to the 200 day MVA (30.86). May hold up at the 36 range (December lows range) before gathering more steam for the rest of the drop.
BUY POINT: Aggressive: 39 on continued strong volume.
POSITION: July $45 puts to buy (UMQ SI). Deltas unavailable.
http://www.investmenthouse.com/ct/emlx.html
LEH (Lehman Bros--$58.03; -3.47; optionable): Brokerage
http://biz.yahoo.com/p/l/leh.html
STATUS: LEH broke its 50 day MVA just before mid-January and remains below that resistance. Now the 18 day MVA at 61.76) has become most immediate resistance while the stock continues the downtrend. Friday the stock gave out again, falling from the moving average on a strong upsurge in volume to 3.85 million (avg. 2.1 million), and LEH fell below the previous February low at 58.30. We are looking for a continued loss, initial target at 50.50.
BUY POINT: 57.90 on continued strong volume.
POSITION: July $65 to $60 puts to buy (LEH SM or SL). Deltas unavailable.
http://www.investmenthouse.com/ct/leh.html
CA (Computer Assoc--$27.06; -1.55; optionable): Software
http://biz.yahoo.com/p/c/ca.html
STATUS: CA has really taken a beating since late January, caving in first on a solid drop to the 50 day MVA, then again on a break of the 200 day MVA early this month. The stock hit the 25-26 range over a week ago, and weakly made its way back to a test of the 10 day MVA (29.23) on Thursday, but closed back below the down trendline that connects January and February highs. From there Friday it fell again, with volume rising to 5.78 million (avg. 3.2 million). The low tested 26, but CA closed below the previous February closing low. Looking for a renewed round of selling ahead. Target: September lows near 22.
BUY POINT: Aggressive: 26 on continued strong volume.
POSITION: May or August $35 puts to buy (CA QG or TG). Deltas unavailable.
http://www.investmenthouse.com/ct/ca.html
C (Citigroup--$44.13; -1.42; optionable): Banks
http://biz.yahoo.com/p/c/c.html
STATUS: C sold hard below the 200 day MVA at 48.25 and gave a weak bounce up to resistance at 46 (the 10 day MVA is right there at 45.39) over the last several days; volume was low except for Wednesday when it spiked above average but the stock was still unable to hold a move over the resistance. Volume surged back above average again Friday but at much stronger levels (20 million; avg. 12.4 million), and C made the drop, closing just above the intraday low at 43.99. The stock hit 44 four times since September, and on a move below that we look for a fall to 38. C fell below its 50 day MVA in late January for a drop to the 44 level, the current support. The February low is 43.15 for less aggressive entry points.
BUY POINT: Aggressive: 43.85 on continued strong volume.
POSITION: June $55 puts to buy (C RK)
http://www.investmenthouse.com/ct/c.html
CONTINUED PLAYS:
Continued Puts:
SMTC (Semtech--$31.96; -1.19; optionable): Semiconductor
http://biz.yahoo.com/p/s/smtc.html
STATUS: So good we are running it again. SMTC hit our buy point for the current put play on Friday (31.90) after it opened just above the 18 day MVA (33.03) but dropped through that and the 10 day MVA (32.45). Volume was lower at 672,400 (avg. 1.3 million) but the stock closed below possible support around 32. We are looking for a continued move down, watching as price approaches the February lows around 30, but our target remains 27.
BUY POINT: For new plays and add to's: 31.75 on rising volume.
POSITION: June $45 puts to buy (QTU RI)
http://www.investmenthouse.com/ct/smtc.html
CLS (Celestica--$37.90; -1.10; optionable): Hardware: Peripherals
http://biz.yahoo.com/p/c/cls.html
STATUS: Closer to the buy point of 37.50 as volume cranked up to 2.7 million (avg. 2.2 million). CLS is in a 10-week descending wedge pattern and gapped down Friday. It showed a loose doji on the drop, bouncing up a bit from a low of 37.55, but we look for the stronger volume to break it out. May test back up closer to 39 before hitting the buy point. Target: 30
BUY POINT: 37.50 on volume of 3 million or higher.
POSITION: June $55 puts to buy (CLS RK). Deltas unavailable.
http://www.investmenthouse.com/ct/cls.html
LLTC (Linear Tech--$39.45; -0.26; optionable): Semiconductor
http://biz.yahoo.com/p/l/lltc.html
STATUS: LLTC is in a 7-week descending wedge pattern with lower support at the 39 range. Closing highs in the pattern are connected by a down trendline that the stock tapped Thursday, but Friday it was the lower 50 day MVA (40.62) that pushed the stock back down through the 18 day MVA (40.26). Volume was low at 3.1 million (avg. 5.3 million), but we look for rising volume for the breakdown. Target 31.
BUY POINT: Breakdown: 38.50 on volume in the range of 7 million.
POSITION: March or August $45 puts to buy (LLQ OI of TI).
http://www.investmenthouse.com/ct/lltc.html
MOVING AVERAGE BOUNCE PLAYS:
OSIS (Osi Pharmaceuticals--$22.82; -0.27; optionable): Semiconductor Equip
http://biz.yahoo.com/p/o/osis.html
STATUS: Has been in a nice uptrend since breaking out of a 9-month flat base last fall (mid-September), and is now testing a recent 6-week cup with handle breakout that formed at the top. As OSIS consolidates above the 18 day MVA (22.47), volume continues to fall, and was at a low 268,100 by Friday; average is 816,000. The tight doji combined with low volume and support point to a move up, a move we are looking for soon. Good money flow and excellent buying. Target: 27.50
BUY POINT: Aggressive: Over 24 on volume of 362,000 or higher. Stop advisory (7%): 22.55
POSITION: Stock and/or July $20 calls to buy (UOJ GD).
http://www.investmenthouse.com/ct/osis.html
TEST OF BREAKOUT:
RTN (Raytheon--$38.58; +0.71; optionable): Aerospace/Defense
http://biz.yahoo.com/p/r/rtn.html
STATUS: Making a good move up in the pennant the stock formed as a test of the breakout of the 50 day MVA from the flat base pattern (end of January). Volume was strongly up at 3.2 million (avg. 2.2 million) on Friday's move, so we are looking for another breakout here. Money flow and relative strength continue at high levels. Target: 45.
BUY POINT: Has hit the aggressive buy point at 37.75 (riding those positions). For breakout: 39 on continued strong volume (minimum for breakout met at 3 million). Stop advisory (7%): 36.27
POSITION: Stock and/or May or August $35 calls to buy (RTN EG or HG). Deltas unavailable.
http://www.investmenthouse.com/ct/rtn.html
ITT (Itt Industries--$55.33; +1.33; optionable): Manufacturing
http://biz.yahoo.com/p/i/itt.html
STATUS: Leaping higher after testing support at the 10 day MVA (53.74) in the test of the breakout from its 11-week flat base pattern. The stock cleared the previous February high by a dime on the move, as volume fell back just slightly to 589,600 (avg. 329,136). Looking for more upside, with a target at 64. ITT has strong money flow and relative strength.
BUY POINT: Hit the aggressive buy point at 54.10; riding those positions here. Stop advisory (7%): 50.31. New positions at 55.50 on rising volume.
POSITION: Stock and/or July $45 or $50 calls to buy (ITT GI low open interests, or GJ). Deltas unavailable.
http://www.investmenthouse.com/ct/itt.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.
BRKS (Brooks Automation--$46.73; -1.16; optionable): Semiconductor
http://biz.yahoo.com/p/b/brks.html
STATUS: BRKS remains in the ascending wedge it formed at the middle right side of its 9.5-month base (highs near 65). The pattern is supported by the 50 day MVA on the lows. Wednesday the stock was up on strong volume and looked ready to head out of the wedge as the chips rallied, but the last two days of the week pulled back on decreasing volume (by Friday 773,300; avg. 638,000). Still high, but the stock tapped on the intraday low the short term up trendline that specifically supports the lows in the pattern. We'd like to see it hold there to keep the pattern in fine form, and with that in mind will look for a move back up from the range of the low. Initial target is 60. High money flow and relative strength.
BUY POINT: Breakout: 49.51 on volume of 933,000 or better. Stop: 46.04 (7%)
POSITION: Stock and/or April (aggressive) $45 or July $40 calls to buy (BQE DI or GH). Deltas unavailable.
http://www.investmenthouse.com/ct/brks.html
SLGN (Silgan Holdings--$27.75; -0.24; no options): Packaging
http://biz.yahoo.com/p/s/slgn.html
STATUS: Tight in the flying plateau pattern (9 days long) that formed after a big run off of the 200 day MVA. The pattern is holding above the 10 day MVA, which the stock tapped on the low of 27.51 (the previous dip in the wedge tapped the same support 6 days ago). Volume has been high in the pattern, but on Friday's doji fell back down below average to 134,400 (avg. 184,500). We continue to look for the breakout. Target: 34.
BUY POINT: Hit the aggressive buy point of 27.75 (holding those positions for now). Breakout: 28.43 on volume of 250,000 or higher. Stop advisory (7%): 26.44
POSITION: Stock.
http://www.investmenthouse.com/ct/slgn.html
URS (Urs Corp--$29.40; +0.05; no options): Diversified Services
http://biz.yahoo.com/p/u/urs.html
STATUS: Holding that 5-week ascending wedge which has tightened into a short flat base the last 7 days. Volume has been below average throughout that time as well, lower again Friday to 61,700 (avg. 106,000). The stock opened below the 18 day MVA (29.20, which has held the pattern up since mid-January) but moved back over the support. We are looking for the breakout on strong volume. The ascending wedge formed after a breakout from a cup with handle, a favorite pattern combination. High relative strength and strong money flow. Target is 36.
BUY POINT: Breakout: 30.30 on volume of 143,000 or higher. Stop: 28.28 (7%)
POSITION: Stock.
http://www.investmenthouse.com/ct/urs.html
KROL (Kroll--$18.46; +0.17; optionable): Diversified Services
http://biz.yahoo.com/p/k/krol.html
STATUS: Holding the ascending wedge that formed after a breakout from an 8-week pennant. Volume is still well below average (66,400; avg. 238,000) with the stock holding at the 18 day MVA, which has supported the pattern since it started forming mid-January (4 weeks ago). KROL opened at 18.16, which is just above the November high at 18, another positive in the pattern. Money flow and buying remains at excellent levels. Target: 23
BUY POINT: 19.34 on volume of 335,000 or higher. Stop: 18 (7%)
POSITION: Stock and/or June $17.50 calls to buy (KRQ FW; low open interests). Deltas unavailable.
http://www.investmenthouse.com/ct/krol.html
BASING/TRADING RANGES:
None for the weekend.
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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stock recommendation
stock investment information
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