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yahoo stock, top stock pick
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: PETM, MNTG, MYGN
Stop Advisories: CDIS (22.35 on put buys at 21.45), CURE (19.95)
Stocks/Indexes from the Wednesday report:
FRK: Still tight in the pennant with volume falling back sharply below average.
PETM: Broke out of the ascending wedge on even stronger volume! Remains a buy on the move up to 11.79.
MNTG: Retraced all of yesterday's move up after it opened higher, trying to break out of the pennant. Volume continued rising, but the stock sold back; no news on the failure. Holding at the 18 day MVA but a test of the 50 day MVA at 15 is not unlikely.
NYCB: The share buyback did not break it out; the stock tried by moving to a new high on the bounce from the 18 day MVA but sold back on rising volume toward the 18 day MVA. Will look for it to hold there if the selling slows down tomorrow.
RPM: Looking for a bounce from the 18 day MVA but on rising volume closed just a few cents below the support. Will want to see a quick move back over.
Continued plays:
Covered call:
FRED: Blasted up Wednesday but pulled back to 33.08 to close on Thursday. Volume was lower and below average. Will look for a pullback to the 10 day MVA (31.66) for exit points if it looks like it can bounce (buy point was 31.88).
Other plays:
KLAC: Chips didn't have as good a day today. Back below the 18 day MVA but on lower volume. Can test 55 (50 day MVA).
MYGN: Gapped below the new buy point at 38, hitting our initial target at 35 on the move. It bounced slightly and may try to move back up to the 38-40 range, where we can look at playing it back down again.
NBTY: Making a good move up in the handle (6-month cup with handle) with volume rising.
TIER: Thursday continued the drop back below the 50 day MVA which occurred three days ago (TIER moved above that resistance Friday). Volume was higher on the move; if TIER breaks support at 18, we will look at playing the short again for the drop to 16. Buy point 17.90 on volume of 265,000 or higher.
Best Plays:
1) ACE: Nice test of the breakout.
2) LLL: Ready for a pullback.
3) BUD: Good news can break it out.
New:
ACE (Ace Ltd--$41.82; -0.68; optionable): Insurance
http://biz.yahoo.com/p/a/ace.html
STATUS: The stock broke out of a 3.5-month flat base pattern just 6 days ago, and now is testing that breakout in an orderly manner. Price and volume are pulling back in a gradual fashion, price holding now above the 10 day MVA support (41.52) and volume is at a low 956,000 (avg. 2.47 million). A look at the chart says it all. Looking for a move back up form the 10 day MVA; we would like to see this support hold since it is above the high in the pattern (November top at 40.75). The 18 day MVA is at 40.57. Showing excellent money flow and buying. Target: 51
BUY POINT: 42.85 (hit 42.75 twice) on volume of 3 million or higher. Stop advisory (7%): 39.85
POSITION: Stock and/or May $35 calls to buy (ACE EG).
http://www.investmenthouse.com/cd/ace.html
Update:
BBX (Bankatlantic--$11.00; -0.09; optionable): Savings & Loan
http://biz.yahoo.com/p/b/bbx.html
STATUS: We covered the stock in its cup with handle pattern back on January 19, from which BBX broke out to run to the January high at 11.23 (the cup was inside a larger 21-week base at the time). After a pullback off that high and a test of the 18 day MVA (currently at 10.72), BBX bounced back up near the breakout high but pulled back again, forming a pennant/ascending wedge pattern (it is posting higher lows but the highs, while gradually lower with each peak, are generally at the same level as in a typical ascending wedge pattern). For a new breakout, we look for a strong move over the breakout high on good volume. Volume has been on the rise the last three days with the stock bouncing from the support, though BBX posted the slight loss Thursday on higher volume at 1912,00 (avg. 226,000). It held the 10 day MVA however, bouncing back up into a doji BBX shows excellent money flow and high relative strength. Target: 14
BUY POINT: Breakout: 11.33 on volume of 305,000 or higher. Stop advisory (7%): 10.54
POSITION: Stock and/or May $10 calls to buy (BBX EB).
http://www.investmenthouse.com/cd/bbx.html
Put:
CALP (Caliper Tech--$12.76; -0.28; optionable): Scientific & Technical Instruments
http://biz.yahoo.com/p/c/calp.html
STATUS: In a head and shoulders pattern, with the peak in the right shoulder finding resistance a week ago at the 50 day MVA (now at 14). CALP had been at the January high (18.69), the head of the pattern, but was pounded back down below the 50 day late that month; the right shoulder was the attempt to get back above that level. Has been beaten quite a bit, but if the stock breaks below 12 it can fall to 8 to complete the pattern. Head and shoulders patterns usually break down as far as they have risen; above the shoulders (14) the head peak is at that 18 range. Now the neckline, level below which we look for breakdown, is just under 13 (February low is 12.38), but the stock has potentially good support at 12.05 (hit 5 times since September), so our breakdown buy point is just under that. Target: 8 is initial
BUY POINT: 11.90 on rising volume (Thursday's volume was 160,200; average is 242,000). Stop advisory (7%): 14.75
POSITION: July $17.50 puts to buy (DQQ SW).
http://www.investmenthouse.com/cd/calp.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.
Covered Call:
LLL (L-3 Communication--$111.90; +0.25; optionable): Telecom
http://biz.yahoo.com/p/l/lll.html
STATUS: After moving off of support at 105 (the current 18 day MVA), LLL stretched to a high of 114.40 Thursday but closed well off of its high, showing a doji on rising, strong volume 1.13 million; avg. 539,000). That signals some type of top. This is a leading stock, but that doesn't mean it does not need a pullback every now and then. LLL since breaking out of the 3-month cup/saucer with handle has run over 10 points. We are going to look for a test back to the 18 day MVA for taking potential positions with covered calls on long-term holdings. The March $105 calls are selling at the close Thursday at $9.10 (with a delta of 0.78). For a move down to the support, they can drop in value to about $4.50. At that point we can buy back the calls and put the difference in the account.
BUY POINT: 110.90 on continued rising volume.
POSITION: March $105 calls to sell (LLL CA) on the move down. Buy back upon a hold at support.
http://www.investmenthouse.com/cd/lll.html
NVDA ($52.50; -3.85): Halted the bouncing action of Wednesday when the stock closed back above 56. Selling since it reversed.
KRON ($43.21; -1.98): Continuing to head lower instead of holding at the 45 level as it did the last 2 days. Volume was even lower below average but we got the slide. Selling.
BMET ($31.56; -0.51): Breached the 18 day MVA on rising volume (above average and strong, just up from Wednesday's volume). Can test 31 at the 50 day MVA. BMET is in a handle-type formation to its 3-month cup.
UP & COMERS PORTFOLIOS: BBBY, SRCL
SRCL ($61.48; -0.93): After Wednesday's super move up near the highs in the 8-week base, the stock took a breather with a slight pullback, showing a doji on lower volume. Can form a handle at this point.
MEMBER PORTFOLIO: CSCO, SEBL, EMLX, BRCM, HDI, BRCD, BUD, AMGN, WMT, ORCL, HB, NOC
BUD (Anheuser-Busch--$48.56; +0.30; optionable): Beer
http://biz.yahoo.com/p/b/bud.html
STATUS: The brewer raised its growth target for 2002 earnings per share to 12 percent on Thursday, reported after the bell. Testing the breakout from the ascending wedge, BUD has been consolidating above the short term moving averages since earlier this month. Volume broke above average in regular trading today (2.8 million; avg. 2 million), as the stock moved off the 10 day MVA (48.08) and moved over some recent highs. Looking for another breakout after the test with this positive news as a catalyst.
Target: 59
BUY POINT: 49 on continued strong volume. Stop advisory (7%): 45.57
POSITION: Stock and/or June $45 calls to buy (BUD FI).
http://www.investmenthouse.com/cd/bud.html
BRCM ($32.50; -2.07): Continues the downtrend. The stock was a put play 2-13 and we continue to ride it down. Initial target is 32, and today's low was 32.17.
CSC) ($15.11; -1.58): Took a hit after news from Ciena and Intel Wednesday, though CSCO has been trending downward since December, and broke the 200 day MVA earlier this month. Long-term holders can consider selling calls (July $12.50) for a move down to the September and October lows near 11.
NOC ($117.80; +2.75): Popped up again Thursday, from a 2-day lateral move, on volume that was slightly lower. It was a quick test of the breakout, and we want to see volume surge back in.
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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yahoo stock
top stock pick
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