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us stock market, trade stock
Begin part 3 of 3
THE PLAYS: Quite a few plays as we need to look both upside and downside as the new year starts.
Upside:
Play Date: 12/29/2007
BIDU (Baidu.com--$398.87; -10.33; optionable): Chinese internet
http://biz.yahoo.com/p/b/bidu.html
EARNINGS: Third week of January
STATUS: Test breakout. We exited BIDU Friday out of an abundance of caution, not wanting to ride our options back down. We could have done so; the pattern is still solid. It looks as if it is going down to test at least to the 10 day EMA (389.50) before it turns back up. We want to use that test to get back in and then catch a new explosive breakout to start the new year.
Volume: 6.103M Avg Volume: 7.638M
BUY POINT: $391.31 Volume=10M Target=$454.00 Stop=$387.65
POSITION: BPJ BR - Feb. $390c (60 delta)
http://www.investmenthouse.com/ci/bidu.html
Play Date: 12/29/2007
BLK (Blackrock--$219.35; +1.07; optionable): Investment services
http://biz.yahoo.com/p/b/blk.html
EARNINGS: Mid-January
STATUS: Cup w/handle. BLK made us some nice scratch on its last rally from November to December, and now it is setting up to do the same thing again. It used the recent market selling to form a short but very nice 3 week cup with handle. Kind of a stop over to catch its breath and set up for the next run higher. It used the 18 day EMA as support and bounced, spending last week coming back to tap at the 10 day EMA (214.50) on the lows to form the handle. It bounced back up Friday for a gain on rising, above average volume. That tells us it is locked and loaded for the next break higher.
Volume: 522.832K Avg Volume: 445.422K
BUY POINT: $220.78 Volume=668K Target=$253.95 Stop=$214.38
POSITION: BLK DD - Apr. $220c (48 delta, low OI)
http://www.investmenthouse.com/ci/blk.html
Play Date: 12/29/2007
FCX (Freeport McMoran--$104.55; +0.64; optionable): Copper
http://biz.yahoo.com/p/f/fcx.html
EARNINGS: Third week of January
STATUS: Ascending base. Taking another run at FCX as it has recovered and is making a higher low above the 50 day EMA (102.05) in its 9 week base. Metals found support once more with steel leading the way but copper shaping up to follow it higher in the new year. Very nice test to end the week, coming back to the 50 day SMA to test that rebound the prior week. A solid set up for the breakout.
Volume: 4.393M Avg Volume: 11.134M
BUY POINT: $106.88 Volume=15M Target=$122.95 Stop=$102.95
POSITION: FCX BA - Feb. $105c (51 delta) &/or Stock
http://www.investmenthouse.com/ci/fcx.html
Play Date: 12/29/2007
SLB (Schlumberger--$98.80; +1.45; optionable): Oil and gas service company
http://biz.yahoo.com/p/s/slb.html
EARNINGS: 1-18-08
STATUS: Double bottom. After a stellar run through mid-October in 2007 that made us money more than once along the way, SLB has tested back to consolidate to set up the next run higher. It has formed a 10 week double bottom of sorts, using the rising 200 day SMA as support for the two legs. Side-stepped some to end last week, moving laterally right at the hump that is the middle of the pattern. May slide laterally a bit more to form a handle, but we want to be ready to move in when SLB breaks higher from this nice set up.
Volume: 4.545M Avg Volume: 9.092M
BUY POINT: $99.89 Volume=12M Target=$114.95 Stop=$97.92
POSITION: SDB ET - May $100c (53 delta) &/or Stock
http://www.investmenthouse.com/ci/slb.html
Play Date: 12/29/2007
TKC (Turkcell--$27.94; +1.12; optionable): Turkish wireless telecommunications
http://biz.yahoo.com/p/t/tkc.html
EARNINGS: Early February
STATUS: Pennant. A nice three week fade along the 18 day EMA (27.50) has set TKC for the next run higher in its excellent trend higher. It broke out in September and has rallied since. It needed a bit more of a breather after the last run into early December, and this low volume pullback along the 18 day EMA is giving it the foundation it needs to make the next break higher. Very solid.
Volume: 795.123K Avg Volume: 1.405M
BUY POINT: $28.22 Volume=2M Target=$33.95 Stop=$26.65
POSITION: TKC DE - Apr. $25c (74 delta) &/or Stock
http://www.investmenthouse.com/ci/tkc.html
New buy points on current positions:
Play Date: 12/29/2007
GOOG (Google--$702.53; +1.79; optionable): Internet search
http://biz.yahoo.com/p/g/goog.html
EARNINGS: 1-31-08
STATUS: Ascending base. Well it is that time again, time to get ready to buy some more Google. It has already made us some great money in 2007, and we currently have some positions remaining from the last buys. We are holding those and looking to add more positions because what we see setting up: a 7 week ascending base making higher lows up the 50 day EMA (670). It spent last week making a higher low at the 10 day EMA (697); a higher low such as this often is the prelude to a new breakout from this type of pattern. It is close to making the break so we want to be ready when it shows that strong surge.
Volume: 2.563M Avg Volume: 6.444M
BUY POINT: $711.05 Volume=8M Target=$785.00 Stop=$695.65
POSITION: GOQ CB - Mar. $710c (52 delta)
http://www.investmenthouse.com/ci/goog.html
Play Date: 12/29/2007
HOLX (Hologic--$69.65; -0.17; optionable): Medical appliances
http://biz.yahoo.com/p/h/holx.html
EARNINGS: 1-30-08
STATUS: Breakout test. After rallying from mid-December as it cleared the 9 week base, HOLX started to come back and test to end last week. After dropping with the market Thursday, HOLX tapped at the 10 day EMA (68.70) on the Friday low and rebounded to close flat. It may come back to snug up a bit more to the 10 day EMA before it bounces, but this set up is so nice we want to be ready now in the event it turns right back up from here.
Volume: 819.44K Avg Volume: 2.995M
BUY POINT: $70.42 Volume=3.2M Target=$80.95 Stop=$68.48
POSITION: QHX CN - Mar. $70c (55 delta) &/or Stock
http://www.investmenthouse.com/ci/holx.html
Downside:
Play Date: 12/29/2007
JAKK (Jakks Pacific--$23.70; -0.51; optionable): Toys and games
http://biz.yahoo.com/p/j/jakk.html
EARNINGS: Third week of January
STATUS: Put. JAKK is breaking the bottom out of an attempted lateral consolidation. Looks as if it is going to seek the September lows near 22. A move to that level lands a 48%ish gain. Using January options so we are looking for a quick move lower.
Volume: 260.871K Avg Volume: 393.711K
BUY POINT: $23.54 Volume=400K Target=$22.00 Stop=$24.05
POSITION: UFF ME - Jan. $25p (-60 delta)
http://www.investmenthouse.com/ci/jakk.html
Play Date: 12/29/2007
MDY (S&P 400 Mid-Cap ETF--$156.51; -0.31; optionable)
http://biz.yahoo.com/p/m/mdy.html
STATUS: Put. The mid-caps rebounded with the market on this last rally through Christmas, but in the days after it rolled over on rising trade (though it was still well below average). It also rolled over at the 200 day SMA; a failure at that key resistance point means the big money was unloading these stocks, anticipating even more downside. As with the small caps, mid-caps have close ties to the economy, and the data keeps disappointing investors. Thus we are looking for more downside here. A move to the target lands a 35%ish gain.
Volume: 3.36M Avg Volume: 5.337M
BUY POINT: $156.11 Volume=5.5M Target=$152.00 Stop=$157.24
POSITION: MDY NA - Feb. $157p (-47 delta)
http://www.investmenthouse.com/ci/mdy.html
Play Date: 12/29/2007
SMH (Semiconductor Holders ETF--$32.63; -0.11; optionable)
http://biz.yahoo.com/p/s/smh.html
STATUS: Put. After a rebound up to the 50 day EMA in early December, SMH looks to be resuming its downtrend. It trended lower down the 10 day EMA (now at 32.89) after gapping lower in October, and this recent bounce to the 50 day EMA is where it came up for some air. It faded, tried to bounce again, but then rolled over last week, making a lower high. That often presages further downside in a trend. Thus we are looking to move in as it continues the fade. A move to the target lands a 58%ish gain.
Volume: 4.11M Avg Volume: 8.928M
BUY POINT: $32.44 Volume=9M Target=$31.00 Stop=$32.98
POSITION: SMH NZ - Feb. $32.50p (-44 delta)
http://www.investmenthouse.com/ci/smh.html
Good Investing!
Jon L. Johnson and your IH Alerts Team
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 in 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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