|
|
us stock market, trade stock
Begin part 3 of 3
NOTE: This corrects the option ticker in the DIA play and the option strike price in the IP play.
THE PLAYS:
Upside:
Play Date: 11/17/2007
EDU (New Oriental Education & Tech--$75.54; +3.14; optionable): Education & training services, China
http://biz.yahoo.com/p/e/edu.html
EARNINGS: Announced 10-15-07
STATUS: Test 50 day EMA. One of the high fliers that surged in October, making us some money and then tanking and hurting one of our positions. It broke out in late September from a 12 week cup with handle base, surged over 90, and then was hit in the November selling. It came back to the 50 day MA this past week, selling hard to that level Monday, but then rebounding sharply only to slide back in the late week downside action. All the while it held the 50 day on the low and that is a key support point. Friday it tapped that level and then rallied for a nice gain on rising volume. Want to see it continue that rally and break through the 18 day EMA (76.95) on stronger trade to show us the buyers are back and it is going to try and run toward that prior high.
Volume: 544.25K Avg Volume: 480.588K
BUY POINT: $77.11 Volume=721K Target=$91.95 Stop=$74.88
POSITION: EDU AO - Jan. $75c (57 delta, 461 OI) &/or Stock
http://www.investmenthouse.com/cd/edu.html
Play Date: 11/17/2007
GOOG (Google--$633.63; +3.98; optionable): Internet search, etc.
http://biz.yahoo.com/p/g/goog.html
EARNINGS: Announced 10-18-07
STATUS: Test 50 day EMA. Another one of the high fliers that broke its strong, strong uptrend along the 10 day EMA a couple of weeks back and flopped to the 50 day EMA. This comes after the September break higher from a 10 week cup base. The breakout and run higher up the 10 day EMA is normal action. The test of the 50 day EMA after 5 rotations up the 10 day EMA following the breakout is normal action. A strong stock will regroup at the 50 day EMA and then continue higher. Friday GOOG tested the 50 day SMA on the intraday low and then rebounded for a gain on the best volume since Monday. Now the expiration trade skewed the volume so we have to basically exclude that. We like, however, the hold at this key level, and if the market was in better shape this would be a no brainer. As it is, we want to see GOOG hold the line here and then post a strong volume break higher to show us the buyers are moving back in. We will move in as well and see if it can click off another run to 700 or the prior high near 735. We are using options given the price, though the options are not what you would call cheap. Nonetheless we can make some big money on them as we did last time with the 480% return or $16,970 per contract. That is what you classify as a good outcome.
Volume: 9.044M Avg Volume: 5.704M
BUY POINT: $639.11 Volume=8.6M Target=$699.75 Stop=$627.55
POSITION: GOO AH - Jan. $640c (53 delta)
http://www.investmenthouse.com/cd/goog.html
Play Date: 11/17/2007
GSOL (Global Sources Ltd.--$28.15; +1.63; no options): B2B internet services, China
http://biz.yahoo.com/p/g/gsol.html
EARNINGS: announced 11-15-07
STATUS: Test 50 day MA. Another stock that broke out in October and surged higher only to sell back in the November leader selloff. A very nice 13 week cup with handle base and strong breakout sent GSOL to 38. It tested and tried to continue the move but was sold hard for a week through last Monday. It bottomed at the 50 day SMA (26.26) last week, holding it on four sessions. It announced earnings that were solid but the market mood was not good and it fell again to the 50 day EMA on Thursday, only to sell again Friday but then rebounded for a solid gain. Money flow is solid and has turned back up sharply ahead of price. Looking for more strong volume as GSOL continues the break higher, and want to see it above the 18 day EMA (29.40) to show it means business. There is some resistance at 30, and if you want to be really cautious you can wait for a high volume move through that level. If we see strong volume as it makes the break through the 18 day, however, we are willing to start some positions and then add when it blows through 30.
Volume: 537.807K Avg Volume: 336.015K
BUY POINT: $29.55 Volume=500K Target=$36.45 Stop=$27.75
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/gsol.html
Play Date: 11/17/2007
TYL (Tyler Technologies--$15.85; +0.57; optionable): Software for local governments: financial, courts & justice, property appraisal and tax, etc.
http://biz.yahoo.com/p/t/tyl.html
EARNINGS: Announced 10-24-07
STATUS: Breakout test. This company brings new meaning to the phrase 'good enough for government work.' With the democrats' upsurge in the polls, many companies deriving their revenue providing government's services are performing well, especially those involved in taxation. The republicans have been profligate in their spending habits (after 7 years of spending that alienated the conservatives in the party, the Bush administration has rediscovered the GOP heritage of controlling spending) but the democrats are still associated with raising taxes and increasing spending because of their belief in social programs. The proposed tax change is no real benefit to the economy, it just places the pea under a different shell; in the end corporations will still charge higher prices than warranted for goods because our effective corporate tax rate won't fall given that the deductions associated with business costs will be eliminated under the plan. Thus the tax code will not be any simpler, and that means companies such as TYL, even with their local ties and not federal, will get more business. It broke higher after earnings, clearing a 6 week double bottom in late October. This is part of a bigger 12 month base on base pattern. It broke out and in the recent market selling it has worked laterally on lower, below average volume in a tight range above the 18 day EMA (15.38). It held its own in the selling and we are looking for it to make the break higher this week.
Volume: 236.7K Avg Volume: 355.742K
BUY POINT: $16.08 Volume=534K Target=$19.38 Stop=$14.95
POSITION: TYL DC - Apr. $15c (69 delta, 37 OI) &/or Stock
http://www.investmenthouse.com/cd/tyl.html
Play Date: 11/17/2007
WFR (Memc Electronic--$71.42; +0.61; optionable): Semiconductors for solar panels, etc.
http://biz.yahoo.com/p/w/wfr.html
EARNINGS: Announced 10-25-07
STATUS: Test breakout. Taking another run at WFR. It broke out of a nicely formed 8 month base in late October on its strong earnings and rallied over 80. It reversed the past week in the market selling, undercutting the 18 day EMA (70.02) one session, but then rebounding Tuesday to recover that level and work laterally the rest of the week, closing out the move with some low volume Tuesday through Friday. Nice recovery and hold at near support at the 10 day EMA on the Friday close. Looking for the break higher from here on strong volume to show us the buyers are back in and we are going to be ready to be one of them when we see the big boys back in there.
Volume: 3.546M Avg Volume: 4.4M
BUY POINT: $72.92 Volume=6.6M Target=$83.95 Stop=$69.89
POSITION: WFR DN - Apr. $70c (61 delta) &/or Stock
http://www.investmenthouse.com/cd/wfr.html
Downside:
Play Date: 11/17/2007
AMR (AMR Corp.--$22.47; -0.68; optionable): Airlines
http://biz.yahoo.com/p/a/amr.html
EARNINGS: Announced 10-17-07
STATUS: Put. AMR made us a nice 46% gain to the downside in early November as it sold off from a 50 day EMA (23.47) test. It bounced back up over the past week to test that key level again as oil prices dipped back from the near $100 level that was pushing jet fuel prices higher. Even as prices backed off last week, however, AMR could not hold that key level despite a couple of intraday attempts to do so. It fell back and faded below the 10 day EMA on the Friday close. Money flow has turned down once more. Looking to ride AMR on its next leg lower and pick up another 45% to 50% if it will give it to us.
Volume: 7.508M Avg Volume: 7.462M
BUY POINT: $22.32 Volume=9M Target=$20.21 Stop=$23.05
POSITION: AMR MX - Dec. $22.50p (-61 delta)
http://www.investmenthouse.com/cd/amr.html
Play Date: 11/17/2007
DIA (Diamonds Trust (DJ30)--$131.44; +0.35; optionable)
http://biz.yahoo.com/p/d/dia.html
STATUS: Put. Struggling below the 200 day SMA (132.30) as the Dow trades above and below that level this past week. It recovered it on Tuesday only to give it back on Thursday. The inability to hold above this key level tells of big money selling out of some Dow stocks. Looking for more weakness in the Dow, and if it comes we are looking to play it on the next leg lower. A move to the target lands a 39%ish gain.
Volume: 22.489M Avg Volume: 14.74M
BUY POINT: $131.28 Volume=20M Target=$128.05 Stop=$132.38
POSITION: DAW XB- Dec. $132p (-46 delta)
http://www.investmenthouse.com/cd/dia.html
Play Date: 11/17/2007
IP (International Paper--$34.11; +0.56; optionable): Paper products
http://biz.yahoo.com/p/i/ip.html
EARNINGS: Announced 11-2-07
STATUS: Put. IP failed to impress with its earnings, and that killed off a late October attempt to move up past the 200 day SMA. It rolled lower, then tried to bounce early last week, making it back up to the 18 day EMA (34.84) intraday before stumbling and falling back, Thursday as well. Friday it managed a rebound move but on very low, below average volume; pure relief move with no substance. Looking for it to roll over and start the selling again though it may try to bounce up to the 10 day EMA (34.47) before it does. If so we will move up the buy point and move in as it rolls back over. A move to the target lands a 40%ish gain.
Volume: 2.935M Avg Volume: 3.273M
BUY POINT: $33.95 Volume=3.4M Target=$32.15 Stop=$34.55
POSITION: IP MG - Jan. $35p (-48 delta)
http://www.investmenthouse.com/cd/ip.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: Held the 50 day EMA on the close of the week, and that keeps AAPL in the hunt with some of the other large cap techs for a bounce higher.
CELG: Rebounded last week off the 200 day SMA test but stalled below the 90 day SMA. Key point CELG on this particular bounce, but overall it looks as if it is going to continue basing. If it stalls here you can sell some $65 strike call options, let it fall to 62ish, and if it starts to hold then buy them back.
MA: Still looks super to break higher after that nice Friday action.
PCLN: Just moving higher, closing at a new closing high on Friday.
NVDA: At an important stage as it broke support at the 90 day SMA last week and is bouncing to test. If it fails, 30 becomes a very important support point. If it fails it would be worth selling some calls and buying them back at 30ish.
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.
|
us stock market
trade stock
|
