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us stock market, stock recommendation
Begin part 3 of 3
THE PLAYS: Still some excellent upside for a market relief bounce along with some downside to be ready if the market finds no strength.
Upside:
Play Date: 11/10/2007
ATK (Alliant Techsystems--$114.47; -1.99; optionable): Aerospace/defense
http://biz.yahoo.com/p/a/atk.html
EARNINGS: Announced 11-1-07
STATUS: Breakout test. Nice strong surge on high volume to start November as ATK produced some solid earnings. The move cleared a 12 week ascending base with solid strength, and though it sold back to end the week in the market dump lower it held the breakout with a nice close at the 18 day EMA on Friday. Basically used the market selling to test the breakout move and that places it in good position to continue higher as the selling eases as the market rebounds in a relief rally. No relief move for ATK, however; it is in a great pattern with a strong breakout.
Volume: 252.751K Avg Volume: 327.533K
BUY POINT: $115.89 Volume=495K Target=$132.95 Stop=$113.57
POSITION: ATK BC - Feb. $115c (49 delta, 137 OI)
http://www.investmenthouse.com/ci/atk.html
Play Date: 11/10/2007
BEAV (BE Aerospace--$47.39; -0.29; optionable): Aerospace/defense
http://biz.yahoo.com/p/b/beav.html
EARNINGS: Announced 10-30-07
STATUS: Breakout test. BEAV is another aerospace stock that broke higher in late October and ran higher into early last week, then gave up some ground to end the week in the market selling. We took some gain off the table as it made the test, and now that it has come back to the 18 day EMA it lookss as of the test is over. It came back to test the 18 day EMA on the Friday low (46.93) on lower, average volume and held. It also held the breakout from its 14 week cup with handle base. That puts it in excellent position to bounce back this week with some vigor, continuing its breakout as the market likely gives us a relief bounce. Aerospace is holding up very well in the selling, a good defensive sector so to speak. Looking for a bounce back up through the 10 day EMA (47.95) to give us a new entry point for this stock.
Volume: 893.87K Avg Volume: 1.016M
BUY POINT: $48.18 Volume=1.2M Target=$55.95 Stop=$46.78
POSITION: BQV DI - Apr. $45c (66 delta, 171 OI) &/or Stock
http://www.investmenthouse.com/ci/beav.html
Play Date: 11/10/2007
BTU (Peabody Energy--$55.87; +1.22; optionable): Worldwide coal operations
http://biz.yahoo.com/p/b/btu.html
EARNINGS: Announced 11-6-07
STATUS: Test 50 day EMA. BTU Broke out from a nice 24 week cup with handle base in the last half of October, looking supoer as it surged higher on strong volume. It peaked near 59 and started a modest test to the 10 day EMA. Looked great, but then gapped lower to start this month as it spun off a subsidiary & that was taken out of the stock. It sold back to the 50 day EMA but has bounced back, clearing the 10 day EMA last week, testing that move, then starting back up on Friday as the market sold off. Excellent relative strength and looking to move into BTU as it continues higher with this move.
Volume: 6.975M Avg Volume: 4.599M
BUY POINT: $56.25 Volume=6M Target=$64.95 Stop=$53.68
POSITION: BTU CK - Mar. $55c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/btu.html
Play Date: 11/10/2007
MA (MasterCard--$193.00; +1.56; optionable): Credit services
http://biz.yahoo.com/p/m/ma.html
EARNINGS: Announced 10-31-07
STATUS: Breakout test. When most of the credit service companies are struggling, MA is taking bags of money to the bank. We were looking to move in to end October and missed our opportunity; it announced strong earnings and gapped sharply higher, clearing an excellent 18 week cup with handle base. Big surge that took it to a psychological level at 200 on the move. It stalled there Wednesday, and in the Thursday and Friday selling it came back to test the 10 day EMA (185) on the session lows each session. Friday it rebounded to post a modest gain. May do some more lateral testing here before it is ready to make the break, but this stock has been so strong we want to be ready to move in as it resumes its breakout run.
Volume: 4.338M Avg Volume: 3.697M
BUY POINT: $194.22 Volume=5M Target=$219.95 Stop=$189.89
POSITION: MAL AS - Jan. $195c (54 delta) &/or Stock
http://www.investmenthouse.com/ci/ma.html
Play Date: 11/10/2007
SLT (Sterlite Industries--$23.61; -1.14; optionable): Copper
http://biz.yahoo.com/p/s/slt.html
EARNINGS: 11-21-07
STATUS: Test 18 day EMA. We closed out our position on SLT to end the week, taking a modest gain off the table as a precaution given the high market volatility. It held the 18 day EMA (23.48) on the close, and with that we are going right back to look at another play on this strong stock. It was a new issue in June and it broke out of its first ever base in mid-October. This is a very nice test of that breakout and we are ready to move right back in if it can show us another strong break higher. A top-rated stock in terms of fundamentals growth rates to match its solid pattern. Ready to move in as it makes a strong, higher volume rebound.
Volume: 2.699M Avg Volume: 1.714M
BUY POINT: $24.31 Volume=2.8M Target=$29.38 Stop=$23.24
POSITION: SLT CX - Mar. $22.50c (65 delta) &/or Stock
http://www.investmenthouse.com/ci/slt.html
Downside: Not all stocks are sold out after last week.
Play Date: 11/10/2007
AMZN (Amazon.com--$78.89; -4.69; optionable): Online retail
http://biz.yahoo.com/p/a/amzn.html
EARNINGS: Announced 10-23-07
STATUS: Put. Earnings were great in later October and AMZN gapped higher. It gapped lower the next session, indicating that, after a long, strong run higher in 2007, it had lost its drive. Moreover, retail is in the doghouse as more and more anticipate a dreary holiday sales season. That may or may not be the case, but AMZN is in trouble and heading lower, gapping below the 90 day SMA (83.36) where it held three times on the week. It cracked some significant support and closed at the session low. Ready to move in and ride it lower as it continues the breakdown from a 9 week broad umbrella top. A move to the initial target lands a 38%ish gain. If it is heading lower hard at that target we will let some of the position ride lower.
Volume: 11.621M Avg Volume: 8.105M
BUY POINT: $78.67 Volume=12M Target=$74.05 Stop=$80.05
POSITION: ZQN XP - Dec. $80p (-45 delta)
http://www.investmenthouse.com/ci/amzn.html
Play Date: 11/10/2007
CMI (Cummins--$120.56; -4.30; optionable): Large engines
http://biz.yahoo.com/p/c/cmi.html
EARNINGS: 10-25-07
STATUS: Put. CMI is breaking lower in what appears to be the right shoulder of a 13 week head and shoulders base. It imploded on earnings in late October but rebounded through midweek last week. It could not hold up, however, gapping lower Friday. It rallied to test the 90 day SMA (122.04) that it breached on the gap, but it faded back. Looking to move in as CMI continues lower as it has a lot more downside to it. A move to the target lands a 38%ish gain, and it has room to sell lower down near 110 where it bottomed in October and in early September. If it is selling hard at the target point we let at least some positions continue lower.
Volume: 1.752M Avg Volume: 1.992M
BUY POINT: $119.97 Volume=2M Target=$113.55 Stop=$122.12
POSITION: CDM XD - Dec. $120p (-48 delta)
http://www.investmenthouse.com/ci/cmi.html
Play Date: 11/10/2007
MT (Arcelor Mittal--$73.01; -3.71; optionable): Steel and iron
http://biz.yahoo.com/p/m/mt.html
EARNINGS: Mid-November but no specified date yet
STATUS: Put. MT worked laterally to the last week of October and then shot higher. Looked super. Then it gapped lower to test, then it gapped and broke down to the 50 day EMA (74.34) to start November. It held at that level all last week, trying to make the break, but making some false starts along the way. It gapped higher Thursday but then rolled over. Friday it gapped lower and just kept on going. It broke below the 50 day and sold on high volume, closing near the session low. Plenty of downside to give us a nice gain near 38% to the initial target.
Volume: 4.808M Avg Volume: 2.479M
BUY POINT: $72.89 Volume=2.6M Target=$68.38 Stop=$73.39
POSITION: MT XO - Dec. $75p (-48 delta)
http://www.investmenthouse.com/ci/mt.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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