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us stock market, trade stock
Begin part 3 of 3
THE PLAYS: Time to start getting ready for the downside in case this rebound has a shorter lifespan
Upside:
Play Date: 01/24/2008
LKQX (LKQ Corp.--$19.78; -0.52; optionable): Wholesale recycled OEM auto parts
http://biz.yahoo.com/p/l/lkqx.html
EARNINGS: Last week of January but unconfirmed by company
STATUS: Test 50 day EMA. Holding up very well in the market selling, coming back to the 90 day SMA and 50 day EMA (19.85) and then moving laterally along that level, waiting for the selling to conclude. Some good upside moves the past week on good volume, but then fading back, unable to hold the footing. Still looks good for the next break higher. Just waiting for volume along with a move that sticks.
Volume: 1.364M Avg Volume: 1.239M
BUY POINT: $21.33 Volume=2M Target=$25.95 Stop=$19.84
POSITION: AUG ED - May $20c (56 delta, low OI) &/or Stock
http://www.investmenthouse.com/ci/lkqx.html
Downside: Again, time to have some plays ready to go for when the market rolls over.
Play Date: 01/24/2008
DIA (Diamonds Trust (DJ30 EFT)--$123.45; +0.75; optionable)
http://biz.yahoo.com/p/d/dia.html
STATUS: Test 10 day EMA. Yes we are in upside positions in DIA and yes we still expect it to continue higher toward 125 and even possibly 127.50, but with the action around the 10 day EMA (123.82) on Thursday (three times tested, fading back each time) we want to be ready in the event the move suddenly runs out of gas and rolls over.
Volume: 20.122M Avg Volume: 17.022M
BUY POINT: $122.65 Volume=26M Target=$113.55 Stop=$123.98
POSITION: DAW OT - Mar. $124p (-45 delta)
http://www.investmenthouse.com/ci/dia.html
Play Date: 01/24/2008
IWM (Ishares Russell 2000 ETF--$68.97; -0.05; optionable)
http://biz.yahoo.com/p/i/iwm.html
STATUS: Put. Similar to DIA, IWM (small cap index) has rebounded up to the 10 day EMA (69.43) with the reversal in the market. Indeed, it was the market leader on the Wednesday reversal. Thursday it showed a doji on the candlestick chart just below some resistance at 70. It could make it up to the 18 day EMA (70.80) or even on up to 72-73 where there is other resistance; if it does, we move the buy point up under it. If it rolls over here we are ready to capitalize on the next decline.
Volume: 113.683M Avg Volume: 99.98M
BUY POINT: $69.33 Volume=15M Target=$65.85 Stop=$70.15
POSITION: IQQ OR - Mar. $70p (-47 delta)
http://www.investmenthouse.com/ci/iwm.html
Play Date: 01/24/2008
NILE (Blue Nile--$56.43; +2.16; optionable): Online diamond sales
http://biz.yahoo.com/p/n/nile.html
EARNINGS: 2-12-08
STATUS: Put. NILE made us a nice chunk of change on its last sharp decline just a couple of weeks back. It has rebounded with the market and the retailers the pat week, rallying to tap the 18 day EMA (57.17) on the Thursday high. Volume, while still strong, has tailed off as it has made this move. Thursday volume fell back to average as it moved up to resistance at the 18 day EMA. This is the resistance that held it in check on the last bounce the second week of January, and before that it tested the 50 day EMA on its bounce. Thus it likely turns down at this resistance once again unless the rest of the market really rallies higher and carries it with it. Looking for a rollover on some rising trade to move into the next downside play.
Volume: 684.683K Avg Volume: 693.578K
BUY POINT: $55.32 Volume=850K Target=$47.45 Stop=$57.31
POSITION: JWU OK - Mar. $55p (-38 delta)
http://www.investmenthouse.com/ci/nile.html
Play Date: 01/24/2008
SDS (UltraShort S&P500 ETF--$63.20; -1.16; optionable)
http://biz.yahoo.com/p/s/sds.html
STATUS: Test 10 day EMA. This is the ETF that moves opposite the SP500 and at twice the pace of SPY. Thus on this rally the past three sessions SDS has come back to test its earlier breakout (a breakout that made us some nice money). With SP500 around its 10 day EMA, if it fails then SDS will be ready to move higher. Thus we are getting ready in the event the market stalls out prematurely on this rebound.
Volume: 29.176M Avg Volume: 20.868M
BUY POINT: $64.45 Volume=30M Target=$72.45 Stop=$62.55
POSITION: SDS CK - Mar. $63 delta (55 delta) &/or Stock
http://www.investmenthouse.com/ci/sds.html
Play Date: 01/24/2008
TWM (ProShares Russell 2000 Ultrashort ETF--$84.90; +0.57; optionable)
http://biz.yahoo.com/p/t/twm.html
STATUS: Test 18 day EMA. Similar to SDS, TWM moves inversely to its index, the Russell 2000, and it moves at a 2:1 ratio. It broke out two weeks back as the small cap index broke down. It has come back on this market rebound, tapping at the 18 day EMA (81.60) on the Thursday intraday low. Looking to pick it off on a further rebound in the event the market stalls out at this test of near resistance.
Volume: 12.453M Avg Volume: 6.621M
BUY POINT: $85.68 Volume=10M Target=$97.95 Stop=$81.54
POSITION: TWM CG - Mar. $85c (54 delta) &/or Stock
http://www.investmenthouse.com/ci/twm.html
Continuing Plays still ready:
BAX
CMED
OMCL
PPDI
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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