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us stock market, stock watch
Begin part 3 of 3
THE PLAYS: Looking at upside this weekend given the selloff and the look that the second leg of the selling is just about over. After the bounce starts we will start putting downside back on the report.
Upside: Still looking at plays to ride the rebound from this second leg of selling. These are in addition to those on the Thursday report.
Play Date: 01/19/2008
AMZN (Amazon.com--$79.76; -0.36; optionable): Internet sales
http://biz.yahoo.com/p/a/amzn.html
EARNINGS: 1-30-08
STATUS: Test 200 day SMA. Yes it is retail, but AMZN was also one of the better performers in 2007, starting with its big gap higher in April on earnings. It peaked in October and has moved in a trading range from 77 to 97 since. It has just come back to the bottom of the range, tapping just over the still rising 200 day SMA (77.55) on the intraday lows last week, showing a series of dojis on the candlestick chart last week. That tells us it is bottoming on this pullback, perfect timing for an upside play with the market rebound as it rides back up in its range. One of the best set ups we see for an upside move in the market rebound from the second leg lower.
Volume: 13.364M Avg Volume: 9.429M
BUY POINT: $81.15 Volume=14M Target=$92.90 Stop=$77.45
POSITION: ZQN DP - Apr. $80c (58 delta) &/or Stock
http://www.investmenthouse.com/ci/amzn.html
Play Date: 01/19/2008
BAX (Baxter Intl.--$63.16; +0.37; optionable): Diversified medical products company
http://biz.yahoo.com/p/b/bax.html
EARNINGS: 1-24-08
STATUS: Test breakout. We like BAX for several reasons. One, it is showing great technical strength, having broken out from a long 8 month base two weeks back, holding the gain in the market selling, working laterally as it waited for the 10 day EMA (62.63) to rise to meet it. Second, it is in a good sector for a defensive market. Third, it has already made the breakout; if it starts to run higher again on continued solid volume that tells us the breakout buyers are not alone in wanting the stock. Thus we are going to watch and see if it can make the next break higher in its breakout move and continue what it already started. If it does then we can move in.
Volume: 5.388M Avg Volume: 3.418M
BUY POINT: $64.31 Volume=5.1M Target=$72.65 Stop=$62.11
POSITION: BAX EZ - May $62.50C (58 delta) &/or Stock
http://www.investmenthouse.com/ci/bax.html
Play Date: 01/19/2008
MBT (Mobile Telesys--$88.78; +3.83; optionable): Russian wireless telecom
http://biz.yahoo.com/p/m/mbt.html
EARNINGS: Third week February
STATUS: Test 90 day SMA. A nice run from September through December, MBT sold back with the market, coming under heavy pressure last week as many leaders were shoved back with the other stocks that were already broken down and mangled. It found support at its 90 day SMA (84.90) and then bounced Friday on very strong volume. Maybe some expiration related trade, but MBT has not shown the same dogged selling, and thus it is in prime position to bounce sharply in a market rebound as it still has a lot of growth potential in the Russian market.
Volume: 3.154M Avg Volume: 1.579M
BUY POINT: $89.65 Volume=2.4M Target=$98.55 Stop=$84.68
POSITION: MBT CR - Mar. $90c (48 delta) &/or Stock
http://www.investmenthouse.com/ci/mbt.html
Play Date: 01/19/2008
RIG (Transocean--$128.41; +2.63; optionable): Offshore drilling
http://biz.yahoo.com/p/r/rig.html
EARNINGS: 2-20-08
STATUS: Test 90 day SMA. Energy was one of the last victims to fall last week, but despite the drubbing, RIG found solid support at the 90 day SMA (124.90) and bounced Friday on rising, above average volume. Indeed, the selling volume on RIG was not the massive distribution seen with other stocks. That sets it up for a rebound to try the 140 level where it peaked in late November and early December, the potential left shoulder of a possible head and shoulders top. That give us plenty of room to make a nice upside play in a more sustained market rebound even if the pattern does form, and we know that the pattern often looks as if it is going to set up but does not complete.
Volume: 9.844M Avg Volume: 8.666M
BUY POINT: $129.04 Volume=10M Target=$138.95 Stop=$126.42
POSITION: RIG EF - May $130c (48 delta) &/or Stock
http://www.investmenthouse.com/ci/rig.html
Play Date: 01/19/2008
VSEA (Varian Semiconductor--$34.20; +2.64; optionable): Chip equipment
http://biz.yahoo.com/p/v/vsea.html
EARNINGS: 1-24-08
STATUS: Yes a chip stock. Quietly last week, chips started to show strength as the rest of the market sharply sold off. VSEA, a former chip leader before peaking to start September 2007, showed some solid action with two strong upside sessions on jumping volume. That indicates it was more than just a bounce back up to resistance in a continuing downtrend. Indeed, we are looking for it to continue higher off this strong volume turn, move through the 50 day EMA at 37.50, and test a band of resistance at 40. Not a huge move but a nice gain in a rebounding market.
Volume: 1.768M Avg Volume: 1.506M
BUY POINT: $34.55 Volume=2M Target=$39.45 Stop=$33.08
POSITION: UES CG - Mar. $35c (48 delta) &/or Stock
http://www.investmenthouse.com/ci/vsea.html
New buy point on a current position:
Play Date: 01/19/2008
HUM (Humana--$84.35; +0.08; optionable): Health care plans
http://biz.yahoo.com/p/h/hum.html
EARNINGS: 2-4-08
STATUS: Test breakout. HUM showed no weakness in the recent market selling. It broke sharply higher to start 2008, moving out of a 9 week ascending base that formed using the 50 day EMA as support. It rallied nicely on that initial surge and last week faded on lower volume to the 10 day EMA (84), showing a high volume doji at that level Friday. Excellent strength, and this is just the kind of play you want to look at in this market, i.e. the first test of a breakout by a leader in a great defensive sector.
Volume: 2.881M Avg Volume: 1.705M
BUY POINT: $85.11 Volume=2.6M Target=$95.95 Stop=$84.21
POSITION: HUM EQ - May $85c (48 delta) &/or Stock
http://www.investmenthouse.com/ci/hum.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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us stock market
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