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us stock market, trade stock
Begin part 2 of 3
THE PLAYS:
Upside:
Play Date: 02/23/2008
ADM (Archer Daniels Midland--$44.58; -0.84; optionable): Corn
http://biz.yahoo.com/p/a/adm.html
EARNINGS: 5-7-08
STATUS: Double bottom w/handle. Nice set up here as it sold back on Friday to tap at the 18 day EMA (43.83) on lower, below average volume, then bouncing modestly to hold near support. This is forming the handle to a 7 week double bottom using the 50 day EMA and the 90 day SMA on the lows as support. Part of a much larger 22 month double bottom with handle, and this pattern is the last part of that larger base. Large base, large run on the breakout. Part of the corn craze (a.k.a. ethanol insanity), so there is a continuing demand for its products. After this pullback looking for a new strong breakout to give us the entry point.
Volume: 6.133M Avg Volume: 6.679M
BUY POINT: $46.15 Volume=10M Target=$53.95 Stop=$43.94
POSITION: ADM FI - June $45c (59 delta) &/or Stock
http://www.investmenthouse.com/ci/adm.html
Play Date: 02/23/2008
EAC (Encore Acquisition--$35.51; +0.52; optionable): Independent oil and gas
http://biz.yahoo.com/p/e/eac.html
EARNINGS: Announced 2-13-08
STATUS: Double bottom w/handle. Pretty common pattern in this up and down market. Currently working on a handle to its 15 week base, tapping the 10 day EMA (34.54) on the Friday low and then bouncing positive on the close. Got a bit wild in the January selling, but that was par for the course. It recovered and rallied to the October peak at 36 and then started to form this handle. Just going to be patient and let it make the break higher and show us it is time to enter. Interestingly, this current pattern is acting as the handle to a much larger 29 month cup with handle pattern. Big base, big run.
Volume: 734.337K Avg Volume: 583.453K
BUY POINT: $36.85 Volume=875K Target=$42.95 Stop=$34.27
POSITION: EAC FG - June $35c (59 delta, 201 OI) &/or Stock
http://www.investmenthouse.com/cd/eac.html
Play Date: 02/23/2008
RIG (Transocean--$137.96; -0.22; optionable): Offshore oil and gas drilling services
http://biz.yahoo.com/p/r/rig.html
EARNINGS: 5-7-08
STATUS: Cup w/handle. Surged higher Wednesday on strong volume, breaking over the 'hump' in its 8 week double bottom base. It then started to test, coming back modestly Thursday and Friday, tapping at support at 135 on the Friday low before rebounding to close. Nice lower volume as it tests. May come back and snug up a bit more near 135 before continuing, but then looking for a nice strong volume as it renews its breakout.
Volume: 6.696M Avg Volume: 8.596M
BUY POINT: $140.48 Volume=11M Target=$161.85 Stop=$135.11
POSITION: RIG EH - May $140c (52 delta) &/or Stock
http://www.investmenthouse.com/ci/rig.html
Play Date: 02/23/2008
TKC (Turkcell--$24.62; +0.36; optionable): Turkish wireless telecom
http://biz.yahoo.com/p/t/tkc.html
EARNINGS: 2-27-08
STATUS: Double bottom w/handle. It has been awhile but TKC is setting up for us once more. Earnings are coming this week, and we like how TKC is setting up ahead of those. It has formed a double bottom with handle just over the 200 day SMA, using that key level as support for the two bottoms. Nice surge up to the 90 day SMA (24.87) two weeks back and then a lateral, low volume move to form the handle, shaking out some more sellers. Big volume spike Thursday; that is a 'get ready' spike, telling us to prepare for the breakout. Want to see it make the move to start the play, but if it has not before earnings we will take a chance with some positions on Tuesday 2-27.
Volume: 825.862K Avg Volume: 1.474M
BUY POINT: $25.04 Volume=2.2M Target=$29.95 Stop=$23.45
POSITION: TKC GE - July $25c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/tkc.html
Play Date: 02/23/2008
TRA (Terra Industries--$47.75; -0.40; optionable): Agricultural chemicals
http://biz.yahoo.com/p/t/tra.html
EARNINGS: Announced 2-7-08
STATUS: Double bottom w/handle. After a breakout and run higher starting last October, TRA has formed the current 8 week pattern in the market up and down selling, using the 90 day SMA as support for the two bottoms. Nice surge on volume this month, particularly the start of last week, and then a nice lower, below average volume test of the 10 day EMA to end the week. Indeed, Friday it tapped the 10 day on the low (46.40) and rebounded for a modest lost. May take another day or two to finish the handle, but like this set up from this solid leader in a solid sector.
Volume: 3.487M Avg Volume: 3.829M
BUY POINT: $50.65 Volume=5.7M Target=$60.85 Stop=$47.10
POSITION: TRA FJ - June $50c (52 delta) &/or Stock
http://www.investmenthouse.com/ci/tra.html
Downside:
Play Date: 02/23/2008
ALB (Albemarle Corp.--$38.20; -1.05; optionable): Chemicals
http://biz.yahoo.com/p/a/alb.html
EARNINGS: Announced 1-28-08
STATUS: Put. ALB has just formed the right shoulder to a large 8 month head and shoulders top. It plunged lower in January, recovering off that low and into this month, coming up just under the 200 day SMA (40.86) the past week. It never made it that high before rolling over. Friday it undercut the 50 day EMA (39.06) on the strongest volume in two weeks. It managed to bounce off some support at 38. Looking for it to undercut that again on continued solid trade to give us the entry point. A move to the target lands us a 44%ish gain.
Volume: 1.584M Avg Volume: 1.122M
BUY POINT: $37.74 Volume=1.2M Target=$34.72 Stop=$38.69
POSITION: ALB PH - Apr. $40p (-50 delta)
http://www.investmenthouse.com/ci/alb.html
Continuing play that is moving:
Play Date: 02/22/2008
SGR (Shaw Group--$64.53; +1.48; optionable): Heavy construction services
http://biz.yahoo.com/p/s/sgr.html
EARNINGS: Announced 1-9-08
STATUS: Cup. Gapped higher Friday on strong volume, then traded up and down; down most of the session then a surge back up in the lat recovery to close at the session high. If it can continue we will step in. To recap: SGR is bouncing higher off the 200 day SMA, working on the right side of a 16 week cup base. Moved higher the past two sessions, closing over the 90 day SMA (62.52) Thursday. If it can pick up some more trade we will look at a partial position on a further move higher. Then it will likely form a handle, and when it breaks higher from that we can add positions. If it rallies up near 70 before doing so we can even take some interim gain before it forms the handle.
Volume: 2.015M Avg Volume: 1.803M
BUY POINT: On a continued move from here (orig. $63.88) Volume=2.5M Target=$74.95 Stop=$61.54
POSITION: SGR GL - July $60c (65 delta) &/or Stock
http://www.investmenthouse.com/ci/sgr.html
Good Investing!
Jon L. Johnson and The Daily Staff
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 of 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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