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us stock market, stock watch
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
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/cd/beav.html
Play Date: 11/10/2007
HMSY (HMS Holdings--$30.21; +0.22; optionable): Cost containment software for government healthcare programs
http://biz.yahoo.com/p/h/hmsy.html
EARNINGS: Announced 11-1-07
STATUS: Test 18 day EMA. Sharp break higher in early August on earnings, HMSY has rallied well the past month as it cleared an 8 week flat base formed on the heels of that breakout. The November earnings broke it higher again but then last week it was testing in the market selling, coming back to tap the 18 day EMA (28.97) on the Friday low then rebounding. This is giving us a great post-earnings entry point and that is a great time to enter: strong earnings then a test. Looking for the bounce higher on volume to move into this strong leader.
Volume: 233.992K Avg Volume: 279.961K
BUY POINT: $31.04 Volume=375K Target=$32.95 Stop=$28.85
POSITION: QHT CF - Mar. $30c (54 delta, 52 OI) &/or Stock
http://www.investmenthouse.com/cd/hmsy.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/cd/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/cd/slt.html
Play Date: 11/10/2007
TISI (Team, Inc.--$32.46; -0.27; no options): Maintenance and construction services for high pressure piping systems and vessels
http://biz.yahoo.com/p/t/tisi.html
EARNINGS: Announced 10-3-07
STATUS: Test breakout. We exited TISI last week with a modest gain in a precautionary move, but it managed to hold at the 10 day EMA (32.15) on the close. That keeps it in play for a move higher from this short but very nice 4 week base. A top rated stock in terms of fundamentals growth to go along with its good technical pattern. Looking to move right back in as TISI shows us the break higher once more.
Volume: 173.24K Avg Volume: 149.031K
BUY POINT: $33.37 Volume=200K Target=$39.95 Stop=$31.84
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/tisi.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/cd/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/cd/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/cd/mt.html
SUBSCRIBER PORTFOLIO: These are stocks subscribers suggest by vote that we put in a portfolio to track and move into the stocks if they perform well. If you have any suggestions for additions or deletions, email us. We don't cover them all each report, just when something interesting is developing.
AAPL, AKAM, CELG, EDU, GME, GOOG, MA, PCLN, NVDA, VLO
AAPL: Took some big gain off the table last week as AAPL broke its near term trend. It continued to fall and landed at the 50 day EMA on the Friday close. It needed the 50 day EMA test. If the market was in better shape this would be high interesting as a new buy as it comes off this level and resumes its run. We are still going to watch it closely to see if it can resume the move. Remember, it broke out from a new base in late September, and this test of the 50 day EMA after a run up the 18 day EMA is rather typical.
AKAM: Rallied to the 90 day SMA in early October and failed, regrouped and then broke over that level in late October. It has come back to test the move, holding the 90 day on the Thursday and Friday lows. It is digging out of its deep hole and a move over 37.65 here on some strong volume gives it a springboard up to the 200 day SMA at 43.
CELG: Trying to bottom here at 62 support. Good point to go ahead and buy back any calls sold on current stock positions and then see if it can bounce.
EDU: Still testing the 50 day EMA and we will see if it can hold and give us a new play.
GME: Had run too long to make another move and broke down through the 50 day EMA on Friday. If it bounces and fails it is time to sell some calls.
GOOG: Sold our last positions on Wednesday for a huge gain and then it collapsed, closing below the 18 day EMA on Friday. Has to find its bottom.
PCLN: Glad we hung with it on Thursday as Friday was a pretty incredible move on its strong earnings.
NVDA: Good earnings but struggled to hold the 90 day SMA and lost on the session. Needs to hold here.
Good Investing!
Jon L. Johnson and The Daily Staff
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 of 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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