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Begin part 2 of 2
THE PLAYS:
Reading the Plays: Please note that when we reference the 10, 18, and 50 day moving averages (MVA), those are exponential moving averages (EMA). The 200 day moving average is always simple (SMA). We will note when we reference a particular MVA differently, e.g., a simple 50 day MVA. Please click on the Yahoo and chart links for company and charting information. A "prior high" refers to the high at the start of a base.
For conserving space on listings of stop losses, the symbol (7%) indicates that the stop is 7% below the buy point.
Good movers: SRCL made a very solid move off of Tuesday's doji! GAP hit the buy point just after lunch and on the huge volume looks ready to continue the breakout from its ascending wedge. LYTS broke out of the ascending wedge, HARB continued its breakout (is a buy up to 20.35 and closed at 19.99) after Tuesday's lower volume, though volume wasn't much stronger today.
Targets hit: QQQ put (initial at 34)
Stocks/Indexes from the Tuesday report:
GAP: Huge volume as the stock broke out of the ascending wedge, but the move was small. However, we are looking for more tomorrow!
PCX: Holding the 10 day MVA in the handle to its cup. A small move up on a sharp rise in volume; still below average but could build from here.
QSFT: Held with a doji as volume fell back below average (an abrupt decline). Can try a test of the 10 day MVA (at a short term down trendline) before breaking lower again.
MYGN: Holding with a doji after Tuesday's strong selling. New buy point is 38 for the put play.
SRCL: Nice move up on earnings (out last night)!
Continued plays:
Covered call:
FRED: Blasted up and went the other way. Buy point was 31.88; we will see if we get a pullback in order to exit positions. The stock closed Wednesday at 34.
Other plays:
CDIS: Put play from Valentine's Day. Just moved over the 200 day MVA but still has the 50 day MVA and its short term down trendline, the latter below which CDIS barely closed. Still holding positions taken at 21.45 and 20.
GYMB: Still in the handle of its cup, tapping the 50 day MVA and moving back over the 18 day MVA (see the 2-09 report).
ICBC: Good move up from the 18 day MVA. We covered the stock 2-05 when it was testing the flat base breakout. It moved higher but on weak volume and today just beat the new February high it gained after the test. Stronger volume, too!
IXX: Still in a tight pattern above the short term moving averages in a test of the breakout from its trading range.
KLAC: Looking good on a move up from the 18 day MVA on strong volume. KLAC recently broke out of and ascending wedge and is testing the move; breakout high is 62.29.
ORB: After hitting a stop advisory (5.58) last week, ORB is back over the 18 day MVA and showing stronger volume Wednesday on a bounce from that support. It bounced from the 50 day MVA early this month and may be gearing up for another good move.
PRIA: Still looks good in the ascending wedge as it held the up trendline noted in last night's report. See the 2-13 report.
SNS: Higher volume and a move off of its 10 day MVA in the test of breakout consolidation (2-06 report).
Best Plays:
1) FRK: In a tight pennant.
2) PETM: Looks ready for a breakout.
3) MNTG: Almost at the buy point!
4) RPM: Preparing to bounce.
New:
FRK (Florida Rock Ind--$39.63; +0.08; no options): Materials & Construction: Cement
http://biz.yahoo.com/p/f/frk.html
STATUS: The stock is in a pennant pattern that formed after a breakout from a cup with handle in late January/early February. Volume is falling off in the pattern, but was up strongly Wednesday with the stock showing a tight doji in the tail of the pennant (114,500; avg. 86,000). We are looking for another breakout over the upper resistance at 40.48, hit twice in the pattern. Money flow and relative strength are high. Target: 49
BUY POINT: 40.58 on volume of 116,000 or higher. Stop advisory (7%): 37.74
POSITION: Stock.
http://www.investmenthouse.com/cd/frk.html
PETM (Petsmart--$10.88; +0.41; optionable): Specialty Retail
http://biz.yahoo.com/p/p/petm.html
STATUS: After a nice uptrend from the September low of 5.65, PETM peaked at the January high at 11.13 and formed an ascending wedge as it consolidates for another move up. The 50 day MVA has been supporting the stock, and after tapping back through it Tuesday but bouncing back up on strong volume, PETM was back over the 18 day MVA (10.56) Wednesday. Volume continued to soar to huge levels, reaching 2.9 million (avg. 1.1 million), which can break the stock out from the pattern. Upper resistance is at the 11 range. PETM bounced 4 times from the 18 day MVA after its last move off the 50 day MVA. Money flow and buying are strong. Target: 13.50
BUY POINT: 11.23 on continued strong volume (no news to explain the explosion in volume today). Stop advisory (7%): 10.44
POSITION: Stock and/or July $7.50 calls to buy (QPT GU; low open interests).
http://www.investmenthouse.com/cd/petm.html
MNTG (Mtr Gaming Group--$17.00; optionable): Leisure
http://biz.yahoo.com/p/m/mntg.html
STATUS: Ready to break out of a pennant it formed above the 50 day MVA (15.07) after a breakout from a 5.5-month cup with handle. The pennant began to develop in early January after the stock tried to break out after testing the cup with handle breakout run. It has hit the 50 day MVA twice in the pattern, and Wednesday launched from the 18 day MVA (15.75) on a strong surge of volume (837,600; avg. 497,000) on no specific news. Looking for a breakout over the pattern's high price at 17.16. Looks good with strong money flow and high relative strength both ahead of price. Target: 21
BUY POINT: 17.26 on continued strong volume (min. breakout volume met at 671,000).
Stop advisory (7%): 16.05
POSITION: Stock and/or July $15 calls to buy (QCM GC).
http://www.investmenthouse.com/cd/mntg.html
Update:
NYCB (New York Community--$28.74; +0.65; optionable): Savings & Loan
http://biz.yahoo.com/p/n/nycb.html
STATUS: Last covered 2-07 in the now 25-week cup base. The stock hit our earlier buy point in the handle for the breakout (27.95) 2-11 but pulled back again to the 18 day MVA on Wednesday's intraday low at 27.70; after bouncing from the 18 day MVA on the handle breakout, NYCB bounced again today from that support, but volume was lower at 268,500 (avg. 681,000). We are looking for a continued move up with volume surging; another push for the stock can be the after hours news that the company authorized a share buyback. NYCB has high relative strength, and money flow at decent levels and trending higher. Our target: 34.
BUY POINT: 28.95 on volume of 1 million or higher. Stop advisory (7%): 26.92
POSITION: Stock and/or July $25 calls to buy (NQK GE).
http://www.investmenthouse.com/cd/nycb.html
RPM (Rpm Inc--$16.11; +0.18; optionable): Materials & Constr: Building Materials
http://biz.yahoo.com/p/r/rpm.html
STATUS: We covered RPM February 2 when the stock looked ready to bounce from the 18 day MVA after a mid-January move off of the 50 day MVA. It made the move, running to the February high at 16.85, and now has pulled back to the 18 day MVA again (15.80), tapping that support Tuesday on low volume. Wednesday volume shot up near average (469,600; avg. 506,000; no news) as RPM bounced slightly from the support. Looks ready to commence another move up! Money flow strong and relative strength still high. Target: 20
BUY POINT: Aggressive: 16.35 on volume in the range of 685,000. Stop advisory (7%): 15.21
POSITION: Stock and/or May $15 calls to buy (RPM EC).
http://www.investmenthouse.com/cd/rpm.html
PORTFOLIOS: Each report, we look at these to see which is in a buy position. We don't cover them all each time, just the ones that look ready to pick up a few shares.
THE LEADERS: NVDA, DGX, FRX, LLL, KRON, MIK, BMET, APPB, IGT.
NVDA ($56.35; +2.80): Bounced back up from 52.60 on lighter volume; we are looking for a move up to the 60 range, resistance. If the stock cannot break back over that and hold at 61, we will look at taking profits. NVDA sold hard the previous 2 sessions on news of SEC investigations into the company's numbers.
IGT ($65.92; +1.13): The last two days has found the stock back over its 50 day MVA (63.75). Volume remains low and below average, but the stock can hold here.
FRX 80.35; +2.10): After the heavy selling and break of the 50 day MVA on the efficacy test news, FRX caught support at 78 and was back over the 50 day MVA Wednesday. Volume was lower so we will look for a hold at the support.
UP & COMERS PORTFOLIOS: BBBY, SRCL
BBBY ($34.02; +0.54): Holding up at the 18 day MVA after a 2-day pullback, which occurred on below average volume. Getting ready to move back up in the flat base pattern (nearly three month long).
SRCL ($62.41; +3.41): Super move up in the cup base, as the stock gained on the earnings report that was out last night after the bell. The stock closed just under the December high (62.85) at the start of its 8-week base, but if the market allows, this is a strong enough move to break out over that resistance.
MEMBER PORTFOLIO: CSCO, SEBL, EMLX, BRCM, HDI, BRCD, BUD, AMGN, WMT, ORCL, HB, NOC
ORCL ($15.51; +0.72): Bounced back up to the 50 day MVA after opening at the up trendline the stock just undercut in Tuesday's action. Volume was lighter so ORCL maybe able to hold; that trendline has supported the stock's lows since early October. However, it really needs to get back over the 50 day MVA (15.74).
HDI ($51.91; +1.45): HDI tapped on the low of 49.25 that trendline we noted in last night's report (connecting the Jan/Nov and now February closing lows) and bounced back up near the 50 day MVA on strong volume. As with ORCL, trendlines are important support and resistance levels, just like moving averages and other price support. Would be super if the strong volume can break the stock back over the 50 day.
WMT ($60.02; +0.73): With its earnings in line yesterday, WMT held the 18 day MVA as it has since mid-January, opening there and moving up on decreasing but still strong volume. The stock can make another 18 day bounce play (it has made 2 since bouncing from the 50 day in January). February high is 60.72, but can take aggressive positions on the bounce over 60.20, the intraday high, stock and/or June $55 calls to buy.
HB ($60.29; +0.90): Nice little bounce from the 10 day MVA on strong volume, which can break the stock even higher. Aggressive buy points at 60.50 on continued strong volume. The February high is out there at 61.75.
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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