|
|
us stock market, top stock pick
Begin part 2 of 2
THE PLAYS:
Good movers: CA (put) continued to fall Friday (almost three points). ITT has given a great run, moving even higher Friday. PH broke out of the ascending wedge on huge volume! Looking for more upside. STJ (positions taken at 78.66) broke out nicely on Friday. Will look for a pullback before adding to (or new) positions.
Targets hit Wednesday: ROIL (17.50); JNPR (put)
Stop Advisories: USAI (27.25 for buys at 29.30), SY (16.83), WTW (34)
The following were removed from the report; the ones that still look good are on a watchlist:
CYMI ($35.93; -0.35): Were looking for a bounce from the 18 day MVA but the stock traded below that support the last two days. Found support at 35 so will see if it gets back over.
KLAC ($55.85; -0.58): Did not follow through on the high-volume move up from the 18 day MVA Wednesday, instead breaking that support until it tapped the 50 day MVA on Friday's low. Will watch for a move back over the 18 day.
ESRX ($53.78; -0.04): Climbed for three days from the bottom of its handle (in the 5-month cup base) but volume didn't support a strong breakout. New positions over Thursday's high (54.68) but for now looking for a test of the 52.50 range.
ATH (56.35; +0.80): Bounced from the up trendline Thursday but lower volume held it for a smaller bounce from the 10 day MVA. Still looks decent as it hit the aggressive buy point at 56.75 but volume was not on track. February high is 58.84.
LMT ($54.22; -0.98): Made a couple of nice bounces from the 10 day MVA last week but Thursday did not follow through, unable to hold a new high at 56.99. Closed above the 10 day MVA after tapping near the 18 day MVA Friday, with volume slipping lower.
Will look for another day or two of consolidation ahead of another bounce.
RJR ($65.01; +0.74): We still have time to wait for RJR to pull back. Buy point was 62.40 for the covered call sale play; the stock was up on lower volume Friday which can mean fall back down if volume keeps decreasing.
EAT ($32.96; +0.41): Bounced from the 50 day MVA on strong volume Wednesday but volume faded next two days though EAT cleared the previous week's closing high (32.75). Holding positions taken at the 32.25 buy point.
OSIS ($21.54; +0.52): Now at the 50 day MVA after we were looking for a bounce from the 18 day MVA. Volume still below average in the pullback, so OSIS can bounce back up from here. Will look for a move over 22.50 (18 day MVA).
ITT ($58.50; +0.52): Continues to run on the breakout, but volume was lower Friday. Will pull back to test soon.
BRKS ($42.77; -1.61): Broke down in the ascending wedge and now doing the same in a triple top pattern. It broke the 200 day MVA Friday, but if the SOX makes a quick rebound, BRKS may try to get back over the broken support. We'll see what it does here before looking at downside positions.
SLGN ($30.00; +0.79): Got the breakout from the flying plateau and now the stock is just beyond 5% of the buy point. Look for a test of the breakout (buy point was 27.75).
KROL ($17.23; -1.12): Broke down in the ascending wedge.
FULT ($22.99; +0.21): Still in the handle but volume is low Friday on a bounce from the 18 day MVA. Keeping the buy point of 23.25 for a breakout from the 6.5-month cup with handle. Target is 28.
Puts:
NVDA ($49.92; -2.58): The low of 49.25 almost tapped the 200 day MVA, but on higher volume the stock slowed down a bit on the selling. On a continued move down to and hold at the 200 day MVA, good position for taking profits.
EMLX ($35.40; +0.39): Showed a doji at the initial target level at 35. Can bounce back up to the 40 range before meeting resistance again (that is the 50 day MVA).
LEH ($55.44; -0.41): Showing a hammer doji after holding the 55 range the previous three days as well. Volume holding at lower levels. Can move back up to test the 10 day MVA (58). Buy point was 57.90 for the put.
C ($42.40; -0.40): Hit our buy point at 43.85 on Tuesday, and is currently holding above some support at 42. Stronger volume Friday and a move off the low; holding current positions until we see if C will turn back down from a possible test of the 44 range.
SMTC ($29.11; -0.27): Held with a tight, star doji Friday after Thursday's fall back from the 10 day MVA. Will watch for another test of that resistance level; buy point for adding to positions (as of Tuesday) was 31.75. Target remains 27.
CLS ($32.64; -0.43): Gave us a nice drop from the initial buy point at 37.50 and Friday showed a doji on lower volume; may be slowing down on the selling. Can move back up to test 34-35 or even the 10 day MVA at 36.50; a good place here to take some profits, or can ride a test back up (June puts).
LLTC ($37.04; +0.69): Broke down from the descending wedge and held Friday at some possible support at 36 though it closed well off of its intraday high (38.10). May try a test of the 38-39 before continuing the downside. Holding positions taken at 38.50.
Best Plays:
1) OEX: Looking for a bounce.
2) CBSH: Testing the breakout.
3) VLY: A breakout here can start another uptrend.
4) WSTC: Another low-volume test to support.
5) IBC: Ready to break out.
6) UTX: Nice wedge.
7) ROK: Strong volume on a bounce.
8) AZR: Trying for a breakout.
9) ENZN: Can move up for a quick upside play here.
10) Puts: BOBJ; ADVS
NEW PLAYS: More upside plays this weekend as we anticipate a market bounce.
Index: Looking for a bounce.
OEX (Standard & Poors--$554.04; +5.45; optionable):
STATUS: Holding support at the 549-550 range (target on recent put play) and at this point we are looking for a quick and aggressive bounce play, for a move up to the 50 day MVA (569.38), maybe even 575. With continued solid price/volume action (up Friday to 1.39 million; avg. 1.3 million) the index can give us a good move. Target: 570 (initial); 575.
BUY POINT: Aggressive: 557 (just above the 10 day MVA) on continued rising volume.
POSITION: April $540 or $550 calls to buy (OEB DH or DJ).
CBSH (Commerce Banc--$40.92; +0.12; no options): Regional Banks
http://biz.yahoo.com/p/c/cbsh.html
STATUS: Smaller banks are doing well as the bigger names founder with Enron-it is. CGSH is one in a good pattern. It is pulling back to test the breakout at support, the 18 day MVA (40.55), on lower volume after the stock broke out of a 9-week ascending wedge inside a 23-week cup/saucer base. Volume was down Friday to 68,500 (avg. 131,000), good for the hold at support as CBSH holds above the highs at the start of the larger base (40.64 at the August high). Looking for a strong move back up. The stock shows strong money flow and high relative strength. Target is 49
BUY POINT: Aggressive: 41.15 on volume of 93,000 or higher. Stop advisory (7%): 38.27
POSITION: Stock
http://www.investmenthouse.com/ct/cbsh.html
VLY (Valley National--$33.96; +0.48; optionable): Regional Banks
http://biz.yahoo.com/p/v/vly.html
STATUS: The stock made a super uptrend from the October lows that had found support at the 200 and 50 day MVAs (the 50 day had just crossed over the 200 day MVA before the 2.5-month run started). It made two bounces from the 18 day MVA on the run, and has now tested back to the 50 day MVA simple (33.19), from where VLY bounced on Wednesday. Overall the pattern is a 14-month cup with handle, and it is now in the handle. Volume was low that day, but began rising Thursday and broke out to strong levels Friday (226,800; avg. 68,000), then stock finding support at the 18 day MVA for the gain. We are looking for a continue bounce and move over the early February (handle) high at 34.30 to kick off another good run. Target: 41
BUY POINT: Over 34.40 on continued strong volume. Stop advisory (7%): 31.99
POSITION: Stock and/or June $30 calls to buy (VLY FF; 50 open interests).
http://www.investmenthouse.com/ct/vly.html
WSTC (West Corp--$27.03; -0.07; optionable): Business Services
http://biz.yahoo.com/p/w/wstc.html
STATUS: In an 8-month cup with handle base (highs near 28), and pulling back to support in the handle. Volume is falling steadily, down Friday to 53,900 (avg. 120,200), as the stock tapped support at the 18 day MVA on the intraday low of 26.86. WSTC broke out of an ascending wedge earlier this month, just prior to forming this handle, and the stock did close just below the buy point in the wedge (27.10). Still, we look for the 18 day MVA to support WSTC for a move up to breakout. Strong money flow and high relative strength. Target is 34.
BUY POINT: Breakout: 28.20 on volume of 181,000 or higher. Stop advisory (7%): 26.23
POSITION: Stock and/or July $22.50 calls to buy (HUD GX; 1 open interest).
http://www.investmenthouse.com/ct/wstc.html
IBC (Interstate Bakeries--$25.97; +0.81; optionable): Food
http://biz.yahoo.com/p/i/ibc.html
STATUS: Closed just above resistance in the stock's flat, rolling pattern (the stock has been moving between 25.95 and 23 since mid-September) on strong volume of 227,600 (avg. 124,100). The buy point for a breakout from this pattern is 26.05 so we are looking for this strong move to carry through the breakout. On that move, IBC remains a buy up to 27.35 before it hits our 5% limit for buying on breakouts. Money flow is breaking higher. Target: 31.25
BUY POINT: Breakout: 26.05 on continued strong volume (minimum breakout volume was met at 168,000). Stop advisory (7%): 24.23
POSITION: Stock and/or July $22.50 calls to buy (IBC GX).
http://www.investmenthouse.com/ct/ibc.html
FDX (Fedex Corp--$55.14; +0.44; optionable): Delivery Services
http://biz.yahoo.com/p/f/fdx.html
STATUS: In an ascending wedge pattern. FDX broke out of a cup with handle pattern mid-December, and has formed the wedge after the first successful test of the breakout to support at the 18 day MVA. Currently, that is the support in the tail of the ascending wedge at 54.07. Volume has been below average for the last week or so, falling lower again Friday to 865,500 (avg. 1.67 million). Look for a breakout over upper resistance at 56; the actual high in the pattern is at 56.85. Money flow and relative strength high. Target: 67
BUY POINT: 56.10 on volume of 2.25 million or higher. Stop advisory (7%): 52.17
POSITION: Stock and/or July $50 calls to buy (FDX GJ).
http://www.investmenthouse.com/ct/fdx.html
UTX (United Tech--$69.70; +0.55; optionable): Conglomerates
http://biz.yahoo.com/p/u/utx.html
STATUS: In a small ascending wedge that the stock formed after it moved over the 200 day MVA at the end of January (the stock is in a bigger, 9.5 month base). The pattern is supported by the 18 day MVA (68.25) on the lows in the pattern, and that support is squeezing the pattern into resistance at the 70 range. Breakout is over that level on stronger volume, which on Friday was down to 2.37 million (average levels). Relative strength is ahead of price (bullish). Target: 84
BUY POINT: 70.15 on volume of 3 million or higher. Stop advisory (7%): 65.24
POSITION: Stock and/or May $65 calls to buy (UTX EM).
http://www.investmenthouse.com/ct/utx.html
ROH (Rohm & Haas--$38.64; +0.56; optionable): Chemicals
http://biz.yahoo.com/p/r/roh.html
STATUS: Near the highs in a yearlong flat base/trading range that is part of a bigger 23-month base. ROH moved up from support at 38, upper resistance in a short and tight consolidation that was squeezed between the 10 day MVA (37.57) and the support at 38. It popped out of the consolidation with volume spiking up to 1.4 million (avg. 890,000), and looks ready to add to the move here. Still has the Thursday high at 39.04, but we look for continued strong volume to break the stock out over that. Strong money flown ad high relative strength. Target: 47
BUY POINT: 39.14 on continued strong volume (min. breakout volume met at 1.2 million). Remains a buy on the breakout up to 41.10. Stop advisory (7%): 36.40
POSITION: Stock and/or July $35 calls to buy (ROH GG).
http://www.investmenthouse.com/ct/roh.html
ROK (Rockwell--$19.00; +0.54; optionable): Conglomerates
http://biz.yahoo.com/p/r/rok.html
STATUS: ROK broke out of a 9.5-month cup with handle base, then immediately started to form an ascending wedge/pennant pattern as a test. The pattern is using the 50 day MVA as support on its recent low (near 18), and the 18 day MVA (18.55), from where the stock moved up Friday on good volume (633,400; avg. 541,000). We are looking for a good breakout over the high in the pattern, from February at 19.42. Strong money flow, high relative strength. Target: 23.50
BUY POINT: 19.44 on volume of 730,000 or higher. Stop advisory (7%): 18.09
POSITION: Stock and/or July $17.50 calls to buy (ROK GW).
http://www.investmenthouse.com/ct/rok.html
AZR (Aztar--$19.40; +0.43; optionable): Resorts & Casinos
http://biz.yahoo.com/p/a/azr.html
STATUS: AZR is in an ascending wedge that is finding support at the 50 day and 18 day MVAs (at 18.28 and 18.99, respectively). The pattern formed off of the breakout of a 17-month flat base (when the stock ran to a high in January at 19.65 to commence the ascending wedge. The pattern has seen overall lower volume, but that surged Friday to 167,300 (avg. 118,400) with the stock bouncing off the 50 day MVA on the low (18.40). Looking for a continued bounce that will break AZR from the wedge. Relative strength high. Target: 24
BUY POINT: Breakout: 19.97 on volume of 160,000 or higher. Stop advisory (7%): 18.57
POSITION: Stock and/or May $17.50 calls to buy (AZR EW).
http://www.investmenthouse.com/ct/azr.html
Back on:
ATVI (Activision--$26.71; +1.08): Software
http://biz.yahoo.com/p/a/atvi.html
STATUS: Still in the ascending wedge (part of a 9-month base) and last week was holding at the 50 day MVA (25.52), support from which ATVI bounced on higher volume Friday (948,700; avg. 2.1 million). The ascending wedge began forming back in early November, and as it tightens up we continue to anticipate breakout. The up trendline supporting the pattern is at 25. Still, ATVI appears ready for now to hold the 50 day MVA. Like the strong money flow and high relative strength. Target: 34
BUY POINT: Holding positions taken at 26.30. New aggressive buy point at 27.10 on volume of 2 million or higher. Breakout: 28.64 on volume of 2.8 million or higher. Stop: 26.64 (7%)
POSITION: Stock and/or May $22.50 calls to buy (AQV EX)
http://www.investmenthouse.com/ct/atvi.html
A bounce play for aggressive players:
ENZN (Enzon--$43.99; -0.01; optionable): Biotech
http://biz.yahoo.com/p/e/enzn.html
STATUS: ENZN has been beaten down for almost 4 months as it bounces up and down in its downtrending channel. After testing near its September low (at 42.77) on the Friday low of 41.78, the stock rebounded to close with a hammer doji at the bottom channel line after a 7-day fall from the 50 day MVA (back up at 51.70). Volume was higher on the move at 2.2 million (avg. 1.2 million). The doji along with the strong volume suggests a move back up, and we are looking for a move up to the 50 range, near the January lows and the down trendline. An aggressive play, and we will watch the 18 day MVA, which for now is at 48.28.
BUY POINT: Aggressive: 44.70 on continued strong volume. Stop advisory (7%): 41.57
POSITION: Stock and/or May $40 calls to buy (QYZ EH).
http://www.investmenthouse.com/ct/enzn.html
New Puts:
VRTS (Veritas--$34.32; +1.63; optionable): Software
http://biz.yahoo.com/p/v/vrts.html
STATUS: VRTS found support this week near 32.50 and on Friday made a short bounce back up to the 35 range. We are looking for a move up, in a market bounce, toward the stock's short term down trendline (connects the January and February closing highs) at the 37.50 range. On a failure to move back over the resistance, will consider put buys for a move back down to 30 for an initial target. Volume was lower Friday at 10.4 million (avg. 12 million).
BUY POINT: Aggressive: 37 on the "kiss good-bye"; after a test of the down trendline at 37.50 on above average volume.
POSITION: May $50 puts to buy (VIV QJ).
http://www.investmenthouse.com/ct/vrts.html
ADVS (Advent--$44.90; -1.84; optionable): Software
http://biz.yahoo.com/p/a/advs.html
STATUS: The stock broke its 50 day MVA on Tuesday, falling out of a 2.5 month rolling pattern above that support, hesitated for a day, then hit new lows the last 2 days of the week. Friday volume was higher at 829,900 (avg. 495,000) with ADVS just undercutting the previous February low at 45.10. On a continued move down from here, the stock can fall to the 37 to 38 range (November lows), but we will take 39.
BUY POINT: 44.30 on continued strong volume.
POSITION: May $55 puts to buy (UIV QK).
http://www.investmenthouse.com/ct/advs.html
BOBJ (Business Objects--$36.17; -1.03; optionable): Software
http://biz.yahoo.com/p/b/bobj.html
STATUS: Broke the 50 day MVA (36.88) after forming a kind of head and shoulders (the left shoulder is not so clear-cut), moving just below the low in the left shoulder (36.53) on the move. Volume was strong at 1.2 million (avg. 625,000). On a continued move down, BOBJ can fall to 32 for an initial target; the 200 day MVA at 30 below that. BOBJ may try to test the 50 day MVA before heading back down, and that is where we will try to pick it up.
BUY POINT: Below 36 on continued strong volume.
POSITION: July $45 puts to buy (BBQ SH). Check for deltas.
http://www.investmenthouse.com/ct/bobj.html
CONTINUED PLAYS:
Continued Puts:
CACI (Caci Intl--$34.72; +0.55; optionable): Technical Services
http://biz.yahoo.com/p/c/caci.html
STATUS: The stock remains at the neckline at the completed right shoulder of the head and shoulders pattern. Volume continues to fall below average (by Friday was at 187,000; avg. 526,000). Previous buy point was 33.99, but the pattern has not broken down yet, so can look at some new entry points from here. Target is 30.
BUY POINT: Holding current positions taken at 33.99. From here, 33.50 on rising volume (600,000 or higher).
POSITION: June $45 puts to buy (KFQ RI).
http://www.investmenthouse.com/ct/caci.html
MOVING AVERAGE BOUNCE PLAYS:
None this weekend.
TEST OF BREAKOUT:
RTN (Raytheon--$37.86; -0.06; optionable): Aerospace/Defense
http://biz.yahoo.com/p/r/rtn.html
STATUS: Holding the pennant pattern that formed as a test of the breakout (RTN made a nice run off the 50 day MVA at the end of January). Volume rose again Friday, 3.4 million (avg. 2.1 million) with the stock showing a doji above the 10 day MVA (37.77) off a test near the 18 day MVA (intraday low at 37.46; 18 day MVA 37.15). We do not like higher volume pullbacks, but with the hold at support, will continue to look for a breakout over the February high. Target: 45. Money flow remains strong.
BUY POINT: Has hit the aggressive buy point at 37.75 (riding those positions). For breakout: 39 on volume of 2.8 million or higher. Stop advisory (7%): 36.27
POSITION: Stock and/or May $35 calls to buy (RTN EG).
http://www.investmenthouse.com/ct/rtn.html
WEDGES, PENNANTS, and FLYING PLATEAUS (AND FLAGS): These are some of our favorite patterns as the moves can be explosive. In this market, however, we need to see the move on the breakout on strong volume.
URS (Urs Corp--$29.35; -0.10; no options): Diversified Services
http://biz.yahoo.com/p/u/urs.html
STATUS: Still holding the 5-week ascending wedge pattern, which has tightened into a lateral movement above the 18 day MVA (29.25) over the last several days and showing a tight doji on rising volume Friday (98,800; avg. 91,454). Patience is a good thing, but we don't want to see the pattern break down here. The ascending wedge formed as a test of the breakout from a cup with handle, a favorite combination of patterns that can lead to good breakouts. Money flow and relative strength remain high. Target: 35
BUY POINT: Breakout: 30.30 on volume of 124,000 or higher. Stop: 28.28 (7%)
POSITION: Stock.
http://www.investmenthouse.com/ct/urs.html
BASING/TRADING RANGES:
None this weekend.
Good Investing!
Jon L. Johnson and your Technical Traders Report 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.
|
us stock market
top stock pick
|
