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stock watch, stock recommendation
Begin Part 2 of 2
THE PLAYS:
Good Movers: URS made a solid breakout move today, as did ATVI! VLY and ITT surged (as did ITG but it closed with a high volume doji on the second day of its breakout). EAT keeps on gaining, breaking to a new all-time closing high Wednesday on a strong surge in volume, breaking out of a flying 'w' pattern. FULT blasted off in its breakout from the cup with handle! Others include FDX, WSTC, CBSH, UTX
Targets hit Wednesday: OEX (570)
Stop Advisories: SMTC (33, put), BOBJ (38, put)
Best Plays:
1) SOX: Heading lower.
2) IDTI: Ditto, and broke support on strong volume.
3) CBSH: Making its move.
4) WSTC: Up on rising volume in the handle.
5) IBC: A low-volume pullback to support.
6) ATVI: Still a buy!
7) VRTS: Heading down from here.
8) CACI: Broke recent support on rising volume (put).
9) RTN: Breaking out!
10) URS: Ditto!
NEW PLAYS:
Indexes: Looking for downside.
OEX (Standard & Poors--$563.09; +0.42; optionable):
STATUS: Hit upper resistance at the 50 day MVA, which the index has failed to break the last few times it has tried since mid-January. Volume was higher Wednesday at 1.37 million (avg. 1.3 million) on an attempt to hold a move above the resistance (which is at 568.68) but the index churned on the move, closing with a doji above the 18 day MVA (561.26). We will look for a break of that support for taking more aggressive positions in addition to those taken today; breakdown in the pattern is below lower support at the 549 range, but for now that is our initial target. We sent out a mid-day alert out on the index, taking profits on the upside play and to an aggressive put.
BUY POINT: Aggressive: 560.50 on continued rising volume.
POSITION: April $570 puts to buy (OEB PN).
SOX (Phili Semi--$527.18; -7.48; optionable):
STATUS: In a descending triangle. For the third day tried to move over the 200 day MVA (which is at 546.86; intraday high was 547.70) but failed and closed below its 50 day MVA (537.98). We are looking for a fall to most recent potential support at 500 (the February low; represents the bottom of the triangle). The index hit 499.13 three times at the January lows as well. The SOX has trended down since early that month when it peaked at 606.88 after the nice fall uptrend off the October lows (346).
BUY POINT: Aggressive: 527.
POSITION: April $530 puts to buy (SJX PF).
MANU (Manugistics--$15.91; -0.19; optionable): Software
http://biz.yahoo.com/p/m/manu.html
STATUS: The stock has trended down since late December, and Wednesday opened just under its short term down trendline. It moved over the resistance to a high at 17.15 but could not hold the move, instead heading back below it and the 50 day MVA (16.31). Volume was rising, above average to 3.68 million (avg. 3.2 million). We are looking for a continued move down from here for taking aggressive positions; target is 12 near the December lows. Will watch the February lows at 14 on the way down, for possible support.
BUY POINT: Aggressive: 15.65 (10 day MVA is at 15.77) on continue rising volume.
POSITION: July $22.50 puts to buy (ZUQ SR).
http://www.investmenthouse.com/ct/manu.html
Continued new plays:
IDTI (Integrated Device Tech--$27.10; -1.58; optionable):
http://biz.yahoo.com/p/i/idti.html
STATUS: Broke just below its up trendline (Sept/Dec/Jan lows) on heavier selling as volume rose to 4.7 million (avg. 3.2 million). The stock has been trending lower despite a few attempts at breaking back over the 200 day MVA (currently at 30.42) since November. Looking for a move down to the December low at 23 for an initial target.
BUY POINT: 26.90 on continued strong volume.
POSITION: May $35 puts to buy (ITQ QG)
http://www.investmenthouse.com/ct/idti.html
BMS (Bemis--$56.13; -0.07; optionable): Packaging
http://biz.yahoo.com/p/b/bms.html
STATUS: Looking for a pullback from a previous breakout. The 18 day MVA is currently at 53.16, and after showing a churning doji on higher volume (after the stock broke out of a cup with handle and test), we look for a pullback to that support. The 18 day MVA is just above the December high at 52.47. Volume was strong at 370,700 (avg. 225,000).
BUY POINT: 55.95 on continued strong volume.
POSITION: April $50 calls to sell (BMS DJ)
http://www.investmenthouse.com/ct/bms.html
From Monday:
SWK (Stanley Works--$50.78; +0.71; optionable): Tools
http://biz.yahoo.com/p/s/swk.html
STATUS: Continued the breakout from the 7-week cup with handle within the 7-month ascending wedge pattern, volume really flying high at 1.34 million Wednesday (avg. 418,000). The stock broke out nicely Tuesday after sealing a deal with Home Depot, but even as it moved higher today, the move was smaller on the bigger volume. That suggests a test of the breakout in the near future (next day or so). After the pullback we can look at adding to positions for another breakout (is beyond our 5% limit for buying on breakouts). Outstanding money flow and high relative strength. Target: 57
BUY POINT: Pullback: Will assess after a test of the buy point (47.30) or higher.
http://www.investmenthouse.com/ct/swk.html
CMX (Caremark--$17.75; -0.05; optionable): Health Services
http://biz.yahoo.com/p/c/cmx.html
STATUS: Not able to break out at this point after moving up in the handle to its 7-month cup. Volume was higher Wednesday (1.3 million; avg. 1.6 million) but the stock bounced from the 10 day MVA (tested on the low of 17.40. Still, after it could not break out here, is likely to consolidate further before trying again. Relative strength maintaining the high levels. Target is 23.
BUY POINT: Breakout: 18.10 on volume of 2.4 million or higher. Stop advisory (7%):
16.83
POSITION: Stock and/or June $15 calls to buy (CMX FC).
http://www.investmenthouse.com/ct/cmx.html
New plays from the weekend:
CBSH (Commerce Banc--$41.69; +0.59; no options): Regional Banks
http://biz.yahoo.com/p/c/cbsh.html
STATUS: Nice move up today in the test of the breakout (from the 9-week ascending wedge which is inside the bigger 23-week cup base). Volume was strong at 197,200 (avg. 132,100) and on this solid move CBSH looks ready to try for the breakout fro this test. Strong money flow and high relatives strength. Target: 49.
BUY POINT: Holding positions taken at 41.15. New buy points can be taken from here, on average or higher volume, over 41.80 (today's intraday high).
POSITION: Stock
http://www.investmenthouse.com/ct/cbsh.html
VLY (Valley National--$34.80; +0.35; optionable): Regional Banks
http://biz.yahoo.com/p/v/vly.html
STATUS: Still running from the move off the 50 day and 18 day MVAs (the stock started the move 6 days ago. Volume surged again after taking a rest on Tuesday (up today to 127,300; avg. 72,000), so the stock can continue the move, though it's likely to enter a test in the next couple of days. On that move, the first likely support in the previous February high at 34.30. Excellent money flow. Target: 41
BUY POINT: Holding current positions.
POSITION: Stock and/or June $30 calls to buy (VLY FF; 50 open interests).
http://www.investmenthouse.com/ct/vly.html
WSTC (West Corp--$27.90; +0.45; optionable): Business Services
http://biz.yahoo.com/p/w/wstc.html
STATUS: Started its move up in the handle Tuesday though volume was a bit lower; however, volume surged back up Wednesday (200,000; avg. 124,000) and the stock posted the near half-point gain. We like the action, as it points to a potential breakout from the 8-month cup! Super money flow and high relative strength. Handle high is 28.10, a dime below our buy point. Target: 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--$25.47; +0.09; optionable): Food
http://biz.yahoo.com/p/i/ibc.html
STATUS: Still pulling back after it did not make the breakout move expected after Friday's solid move up in the pattern. The pullback has been made on steadily decreasing volume, however, the kind of price/volume action we prefer as it is healthy. IBC held at the 10 day MVA (tested on the intraday low at 25.36) on the lower volume, 64,400 (avg. 130,000). We are going to look for a move up from here on strong volume after continued hold at the support for another day or two. Strong money flow. Target: 31.25
BUY POINT: New buy point: 26.35 on volume of 173,000 or higher. Stop advisory (7%): 24.51
POSITION: Stock and/or July $22.50 calls to buy (IBC GX; low open interests).
http://www.investmenthouse.com/ct/ibc.html
FDX (Fedex Corp--$58.12; +0.93; optionable): Delivery Services
http://biz.yahoo.com/p/f/fdx.html
STATUS: Continued the breakout from the 6.5-week ascending wedge and remains a buy up to 58.91. Volume has been low on the breakout, but was higher Wednesday, a good sign, at 1.48 million (avg. 1.7 million). Tuesday the company announced first-quarter earnings are expected to be at the high end of expectations, news that helped the stock today. Money flow and relative strength moving higher. Target: 67
BUY POINT: Holding current positions.
POSITION: Stock and/or July $50 calls to buy (FDX GJ).
http://www.investmenthouse.com/ct/fdx.html
UTX (United Tech--$72.95; +1.15; optionable): Conglomerates
http://biz.yahoo.com/p/u/utx.html
STATUS: Broke out of the 3-week ascending wedge (buy point was 70.15); the stock hit the buy point on Monday but closed just under that price. Tuesday on strong volume it surged back up, then continued the breakout Wednesday, moving to a high of 73.90 before pulling back down with volume somewhat lower (3.5 million; avg. 2.4 million). The stock remains a buy on the breakout up to 73.66 as noted earlier, so we will see if stronger volume can push it back up again toward that goal, before the breakout test ensues. Target: 84.
BUY POINT: A buy on the breakout up to 73.66.
POSITION: Stock and/or May $65 calls to buy (UTX EM).
http://www.investmenthouse.com/ct/utx.html
ROH (Rohm & Haas--$38.83; +0.20; optionable): Chemicals
http://biz.yahoo.com/p/r/roh.html
STATUS: Pulling back these last 2 sessions after breaking out of the year-long flat base/trading range pattern. The stock hit a high at 39.31 on the breakout (which wasn't the strongest), then immediately pulled back Tuesday. It is to ROH's credit that the strong volume that day did not force it back down to 38, resistance it took out on the breakout. It held, as well, above Tuesday's closing price for the slight bounce. Looking for another move up with volume surging, after this short test. Money flow strong, and relative strength is high. Target: 47.
BUY POINT: Holding current positions. New buy point: 39.50 on volume of 1.2 million or higher. Stop advisory (7%): 36.74
POSITION: Stock and/or July $35 calls to buy (ROH GG).
http://www.investmenthouse.com/ct/roh.html
ROK (Rockwell--$19.60; +0.35; optionable): Conglomerates
http://biz.yahoo.com/p/r/rok.html
STATUS: Testing the breakout from the ascending wedge/pennant pattern that formed as a test of the 9.5-month cup with handle breakout. Volume was higher at 693,300 (avg. 535,000) and the stock made a move to the high at 20, but closed back down with a doji. We would like to see it hold above the buy point (19.44) on this test, and on that move will plot a new buy point above today's high. Strong money flow and high relative strength. Target: 23.50
BUY POINT: Holding current positions. New buy point: 20.05 on continued strong volume. Stop advisory (7%): 18.65
POSITION: Stock and/or July $17.50 calls to buy (ROK GW; 48 open interests).
http://www.investmenthouse.com/ct/rok.html
AZR (Aztar--$21.40; +0.80; optionable): Resorts & Casinos
http://biz.yahoo.com/p/a/azr.html
STATUS: Extended the breakout from its 7-week ascending wedge pattern, gapping up and showing a spinning top on very strong volume (354,400; avg. 123,000) as the buyers and sellers battled it out. The stock was a buy on the breakout up to 21, and so we will look for a pullback before adding to positions (buy point was 19.97, for a test, the stock can fall back to that price, or higher). Money flow strong and relative strength high. Target: 24
BUY POINT: Holding current positions. New buy point: After a test of the 20 range and bounce.
POSITION: Stock and/or May $17.50 calls to buy (AZR EW).
http://www.investmenthouse.com/ct/azr.html
ATVI (Activision--$29.05; +1.76): Software
http://biz.yahoo.com/p/a/atvi.html
STATUS: Broke out! Has made a great run up from the 50 day (25.78), moving back up in its ascending wedge. Volume has been weak on the move, ATVI blasted up today with a big infusion of volume (4.95 million; average 2.01 million). It pulled back from its intraday high of 29.83, so we will see if it can hold up over the prior highs at 28-28.74. On this move, a buy up to 29.97, and targeting 34.
BUY POINT: Still a buy up to 29.97 on continued strong volume. Stop: 27.02-27.87 (7%)
POSITION: Stock and/or May $25 calls to buy (AQV EE)
http://www.investmenthouse.com/ct/atvi.html
ENZN (Enzon--$46.29; +1.24; optionable): Biotech
http://biz.yahoo.com/p/e/enzn.html
STATUS: ENZN hit our aggressive buy point Tuesday for a quick move up, and then gapped up today and continued up to hit 47.94 (its downtrend from early January; the downtrend actually extend back to late October). From there ENZN pulled back to close, moving on big volume (2.19 million; average 1.23 million), closing with a 'tombstone' doji. The gap up to the high volume tombstone could spell a dip back, so with the aggressive upside positions we need to be ready to exit. Target is 50.
BUY POINT: Holding current positions.
http://www.investmenthouse.com/ct/enzn.html
New Puts (from the weekend):
VRTS (Veritas--$35.45; -2.31; optionable): Software
http://biz.yahoo.com/p/v/vrts.html
STATUS: Made the low volume bounce over the last three sessions, but VRTS turned back down today, falling back on big volume (20.1 million; average 12 million). The move took VRTS back down through its down trendline from early January, (35.50), and we are targeting 30 on a continued drop.
BUY POINT: Still riding positions taken on the prior drop. New positions: a move through 35 in a weak market and continued strong volume.
POSITION: May $50 puts to buy (VIV QJ).
http://www.investmenthouse.com/ct/vrts.html
ADVS (Advent--$49.40; +1.43; optionable): Software
http://biz.yahoo.com/p/a/advs.html
STATUS: Has gained strength on the bounce, which started after a strong fall to 45 last week. Today ADVS reached up to 51.43 (50 day & 200 day MVA's at 50.41 and 51.91), but pulled way back off of that high. Volume picked up to a strong 775,500 (average 505,400), so we could see the anticipated drop back now, especially with Nasdaq weakness. We can look at a put play on a fall back, carefully watching the recent low (44.41), but targeting 39.
BUY POINT: A drop back through 48.50 on continued strong volume.
POSITION: May $60 puts to buy (UIV QL).
http://www.investmenthouse.com/ct/advs.html
BOBJ (Business Objects--$37.40; +0.15; optionable): Software
http://biz.yahoo.com/p/b/bobj.html
STATUS: After breaking the 50 day MVA (36.89), BOBJ hit the put buy point Monday, but pulled back up to close with a doji. Off of that pattern it bounced, managing to move back over the 50 day. Volume has been weaker on the bounce, today up to 630,600 (average 634,800) as it tried a move over the 18 day MVA (37.94), but pulled back to close. It tapped off a stop advisory, but we will see what it does from here. The 36 range has been some steady support outside of last week's drop. If it gives it up again, we can still try a put play with new positions or any remaining positions from the prior drop. The target is 32 initially, with the 200 day MVA at 30 below that.
BUY POINT: For new positions, a drop through 36 on increased volume.
POSITION: July $45 puts to buy (BBQ SI).
http://www.investmenthouse.com/ct/bobj.html
CONTINUED PLAYS:
Continued Puts:
CACI (Caci Intl--$33.54; -1.76; optionable): Technical Services
http://biz.yahoo.com/p/c/caci.html
STATUS: Got the beginning of a breakdown today from the head and shoulders, as CACI tested toward the 50 day MVA (36.21) but dropped back through the buy point (33.50). Volume was still unimpressive on the move, however, coming in at 275,100 (average 529,000). Continuing to ride positions and looking for more volume on the drop down to the target of 30.
BUY POINT: Holding current positions taken at 33.99 and today. From here, can still get in a move down on rising volume (600,000 or higher).
POSITION: June $42.50 puts to buy (KFQ RA).
http://www.investmenthouse.com/ct/caci.html
TEST OF BREAKOUT:
RTN (Raytheon--$39.15; +1.50; optionable): Aerospace/Defense
http://biz.yahoo.com/p/r/rtn.html
STATUS: Broke out! RTN made the move we were looking for today, bouncing up from the short term MVA's (10 day at 38.06) and breaking out of the pennant pattern. A strong move, with volume up to 3.46 million (average 2.2 million). The recent high from its last run (an intraday spike) is just ahead at 39.25, but RTN is a buy on this move up to 40.85. Target: 45.
BUY POINT: Still a buy up to 40.85 on the move, with continued strong volume. Stop advisory (7%): 36.41-38.
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--$31.29; +1.34; no options): Diversified Services
http://biz.yahoo.com/p/u/urs.html
STATUS: Another nice breakout move! We have been watching URS as it moved in an ascending wedge pattern over the 18 day MVA (29.57), and today it took off. Volume was solid breakout volume at 189,500 (average 94,300), and this one is still a buy up to 31.71. Target: 35
BUY POINT: Still a buy up to 31.71 on strong volume. Stop: 29.10-29.50 (7%).
POSITION: Stock.
http://www.investmenthouse.com/ct/urs.html
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.
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