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us stock market, trade stock
Begin part 3 of 3
THE PLAYS:
Upside:
Play Date: 11/14/2007
CFW (Cyberguard--$7.85; +0.15; optionable): Oil and gas drilling
http://biz.yahoo.com/p/c/cfw.html
EARNINGS: Announced 11-8-07
STATUS: Cup with handle. CFW is working on a 4 week handle to a large 22 month base. It used the 50 day EMA (7.37) as support in the handle, as good as any point to use. On Wednesday it moved higher and unlike most stocks, it held onto its gain for the session. Volume was still below average, but money flow is strong and we are looking for some more trade as CFW continues higher and shows us a break from this pattern.
Volume: 225.8K Avg Volume: 241.568K
BUY POINT: $8.05 Volume=362K Target=$9.98 Stop=$7.49
POSITION: CFW DU - Apr. $7.50c (57 delta, 111 OI) &/or Stock
http://www.investmenthouse.com/cd/cfw.html
Play Date: 11/14/2007
WMGI (Wright Medical--$28.91; -0.18; optionable): Medical appliances
http://biz.yahoo.com/p/w/wmgi.html
EARNINGS: Announced 11-1-07
STATUS: Breakout test. WMGI blasted higher on strong volume after its earnings report, clearing the mid-2005 peak on the move as it builds higher in its 3.5 year base. Strong surge on that move and a nice, orderly lower volume test this past week to near support at the 10 day EMA (29.02). Strong money flow is surging higher ahead of price, and after this support we are looking for WMGI to hold and then make the break higher to continue the run. That is when we move in.
Volume: 239.693K Avg Volume: 306.055K
BUY POINT: $29.55 Volume=400K Target=$33.98 Stop=$28.48
POSITION: QWM BF - Feb. $30c (48 delta, 108 OI) &/or Stock
http://www.investmenthouse.com/cd/wmgi.html
Downside:
Play Date: 11/14/2007
CAT (Caterpillar--$70.03; -1.04; optionable): Heavy equipment
http://biz.yahoo.com/p/c/cat.html
EARNINGS: Announced 10-19-07
STATUS: Head and shoulders. CAT broke lower last week from a 9 week top, crashing through the 200 day SMA (74.04) as it did. It held at the gap higher point in April of this year, but after gapping higher Wednesday and testing the 10 day EMA (71.97) it rolled over and started back down on rising, above average volume. After the breakdown from the pattern, this failed test at the 10 day EMA indicates there is more downside to come. Looking to step in as it continues lower. A move to the target lands a 38%ish gain. That is a pretty conservative target, and if it is selling fast at that point we will let it continue down toward 65.
Volume: 7.505M Avg Volume: 6.191M
BUY POINT: $69.55 Volume=7.5M Target=$66.11 Stop=$71.21
POSITION: CAT MN - Jan. $70p (-44 delta)
http://www.investmenthouse.com/cd/cat.html
Play Date: 11/14/2007
IWM (Ishares Russell 2000--$78.16; -0.30; optionable): Russell 2000 ETF
http://biz.yahoo.com/p/i/iwm.html
STATUS: Head and shoulders. The small caps rallied back from the break lower last week when it broke down from a 7 week top. It bounced off 76 and on Wednesday gapped higher to tested the 18 day EMA on the high and then faded back to negative on the session. Failed bounce after the breakdown indicates there is more downside to come. A move to the target lands a 45%ish gain.
Volume: 76.347M Avg Volume: 92.419M
BUY POINT: $77.92 Volume=95M Target=$75.05 Stop=$78.57
POSITION: IOW XZ - Dec. $78p (-45 delta)
http://www.investmenthouse.com/cd/iwm.html
Play Date: 11/14/2007
MS (Morgan Stanley--$55.61; -0.25; optionable): Investment brokerage
http://biz.yahoo.com/p/m/ms.html
EARNINGS: Mid-December
STATUS: Put. After 2.5 months of trying to recover after the August selling, MS collapsed to start November. It has rebounded the past week, gapping higher on Wednesday toward the 18 day EMA (58.43) but as with all stocks it rolled over and closed slightly lower. The rebound was on low volume. Looking for MS to continue back down and when it does we are looking to move in and play the downside. A move to the target lands a 41%ish gain.
Volume: 15.194M Avg Volume: 12.76M
BUY POINT: $54.96 Volume=14M Target=$51.00 Stop=$56.51
POSITION: MS MK - Jan. $55p (-41 delta)
http://www.investmenthouse.com/cd/ms.html
Play Date: 11/14/2007
QQQQ (Nasdaq 100 Trust--$50.09; -0.65; optionable)
http://biz.yahoo.com/p/q/qqqq.html
STATUS: Put. The large cap leadership crumbled last week in a major break of support and the uptrend. When the break came it was dramatic. It broke below the July peak, then rebounded starting Tuesday with the rest of the market. It also gapped higher on Wednesday with the rest of the market but then rolled over to close lower on rising volume in the Q's. Looking for a test of the 200 day SMA (47.66) on this next leg of selling. A move to that point lands a 46%ish gain.
Volume: 263.285M Avg Volume: 148.618M
BUY POINT: $49.88 Volume=200M Target=$47.85 Stop=$50.32
POSITION: UXX XX - Dec. $50p (-44 delta)
http://www.investmenthouse.com/cd/qqqq.html
Play Date: 11/14/2007
TXN (Texas Instruments--$31.07; -0.78; optionable): Semiconductors
http://biz.yahoo.com/p/t/txn.html
EARNINGS: Announced 10-22-07
STATUS: Put. One of the big disappointments in this earnings season, TXN gapped sharply lower on its earnings, breaking down from a head and shoulders base of sorts. It rebounded to fill the gap in late October, then has slipped lower this month. Tried to hold at the late October lows, but after gapping higher to the 10 day EMA (31.91) Wednesday it rolled back over on rising, above average volume, closing at a new low for the month. Looks ready to roll lower and we are ready to move in as it does. A move to the target lands a 42%ish gain.
Volume: 17.895M Avg Volume: 15.002M
BUY POINT: $30.93 Volume=18M Target=$29.12 Stop=$31.22
POSITION: TXN MZ - Jan. $32.50p (-56 delta)
http://www.investmenthouse.com/cd/txn.html
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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