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us stock market, trade stock
Begin part 3 of 3
THE PLAYS:
Upside: Way too many good patterns to ignore. All of these stocks are at the top of the market in terms of earnings growth rates.
Play Date: 12/15/2007
GME (Gamestop--$58.21; +0.66; optionable): Electronic game stores
http://biz.yahoo.com/p/g/gme.html
EARNINGS: Announced 11-20-07
STATUS: Test breakout. GME gave us some great gains this year on a couple of prior runs. After it peaked in September we have patiently waited for it to consolidate and set up again. It dipped in the November selling, but formed a double bottom at the 90 day SMA and shot higher to start December. It has come back to test that move last week, holding at the 50 day SMA on Thursday and Friday. Good upside volume as it held and posted a gain Friday. Looking for continued solid trade as it resumes the move higher into the Christmas season.
Volume: 3.551M Avg Volume: 3.108M
BUY POINT: $59.32 Volume=4M Target=$70.95 Stop=$56.77
POSITION: GME DL - Apr. $60c (49 delta) &/or Stock
http://www.investmenthouse.com/cd/gme.html
Play Date: 12/15/2007
GTI (Graftech Intl.--$18.09; -0.36; optionable): Industrial electrical equipment
http://biz.yahoo.com/p/g/gti.html
EARNINGS: Early January 2008
STATUS: Cup w/handle. Classic action as GTI formed a 6 week cup starting in late October, surging on strong volume in early December to form the right side of the base. Then the Fed-related market selling hit, but as with most of the strong stocks GIT turned it to use, testing back on low volume to the 10 day EMA (17.88), forming the handle to the pattern, the dip after approaching the old high where the sellers who bought at that peak sell out, glad to get out even. After they are gone, however, the sellers are out of the stock and then demand takes over. That is when you see the high volume breakout. May take a few more sessions, but looks ripe to make the move.
Volume: 1.329M Avg Volume: 1.455M
BUY POINT: $19.04 Volume=2M Target=$22.95 Stop=$17.71
POSITION: GTI CW - Mar. $17.50c (58 delta) &/or Stock
http://www.investmenthouse.com/cd/gti.html
Play Date: 12/15/2007
HOLX (Hologic--$65.20; +0.66; optionable): Medical appliances (Mammogram machines)
http://biz.yahoo.com/p/h/holx.html
EARNINGS: 1-30-08
STATUS: Flat/Pennant. HOLX is moving laterally along the 50 day EMA (63.46) the past 5 weeks, trading in a narrowing range above that key level. It gapped lower in early November after a strong September to October run, but it caught itself and this leader is setting up for the next move higher. Going to be patient, let it finish its lateral move, and then step in as it shows us the next break higher on strong volume and heads toward a new all-time high.
Volume: 1.981M Avg Volume: 2.888M
BUY POINT: $66.04 Volume=3.6M Target=$75.95 Stop=$64.22
POSITION: QHX CM - Mar. $65c (57 delta) &/or Stock
http://www.investmenthouse.com/cd/holx.html
Play Date: 12/15/2007
MDR (McDermott Intl.--$57.54; -0.63; optionable): Heavy construction services
http://biz.yahoo.com/p/m/mdr.html
EARNINGS: Early February 2008
STATUS: Cup w/handle. MDR split in early September but kept on moving higher to 62.50 in mid and late October. It needed to base after that and then turned lower, forming the current 7 week cup with handle. Nice surge to start December, then it formed the handle last week as the market sold. Instead of selling back much, however, MDR worked laterally above the 10 day EMA (55.95) and the 50 day SMA (55.76). Like how it did not sell off, just moved sideways, refusing to give up any ground. That is a sign of strength. Good volume spikes on the upside sessions last week, showing the buyers are in the majority. Looking to move in when volume spikes again and MDR makes the break higher, moving toward a new all-time high where there is no resistance.
Volume: 1.267M Avg Volume: 2.281M
BUY POINT: $59.24 Volume=3.4M Target=$69.32 Stop=$55.69
POSITION: MDR BY - Feb. $57.50c (54 delta) &/or Stock
http://www.investmenthouse.com/cd/mdr.html
Play Date: 12/15/2007
LIFC (Lifecell--$44.77; -1.61; optionable): Biotechnology
http://biz.yahoo.com/p/l/lifc.html
EARNINGS: Third week of January 2008
STATUS: Breakout test. This is another stock that made us some money earlier this year. It consolidated that run with a 6 week base spanning late October to early December. It blasted higher two weeks back and rallied to 48. It used the Fed-selling to test the move, coming back on lower, below average volume. It found support Thursday and Friday at the 10 day EMA (44.71) and the late October high that marks the high in the base. A leader that will be in the hunt for a new high after this test of its last breakout. Strong.
Volume: 475.932K Avg Volume: 614.245K
BUY POINT: $45.48 Volume=750K Target=$53.45 Stop=$44.57
POSITION: QKL CI - Mar. $45c (51 delta) &/or Stock
http://www.investmenthouse.com/cd/lifc.html
Play Date: 12/15/2007
SOHU (Sohu.com--$56.02; +0.42; optionable): Chinese internet advertising, search, etc.
http://biz.yahoo.com/p/s/sohu.html
EARNINGS: Late January 2008
STATUS: Cup w/handle. SOHU shook us out last week when it dipped lower through the 18 day EMA on Tuesday. It then recovered and worked laterally at the 18 day EMA (55.31) to close out the week. Great recovery that basically turned a pig's ear into a potential silk purse, i.e. working to form a handle to what has shaped up as a 6 week base that used the 50 day EMA on the lows as support and now the 18 day EMA for the handle. Looking to move in as SOHU breaks higher on strong volume. It made us some great money the two prior plays before the last, so we are looking to return to the strong green with SOHU.
Volume: 790.307K Avg Volume: 1.745M
BUY POINT: $56.78 Volume=2.6M Target=$69.95 Stop=$54.22
POSITION: UZK CK - Mar. $55c (60 delta) &/or Stock
http://www.investmenthouse.com/cd/sohu.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: Showed its strength in the selling, holding near support.
CELG: Gapped lower on threats of another company's drug. Held after that gap lower and we hear the other drug is not as effective as CELG's. Market has not decided that yet, however.
EDU: Sold back in the general market sell off but held the 18 day EMA.
NVDA: This may be the week for NVDA. If it sets up more we will put on a play.
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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