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stock recommendation, stock option
Begin Part 3 of 3
Best Plays:
1) GDW: Ascending wedge.
2) COHU: Strong move!
3) WOR: Moving up on rising volume.
4) SXT: Breakout!
5) HET: Another breakout.
6) LOGI: Making a good bounce.
7) PH: Ready to move up after the test.
8) FDX: Trying to move higher.
9) IBC: Looks ready for the move higher.
10) UOPX: Ready to break out!
NEW PLAYS:
GDW (Golden West Financial--$64.32; +0.57; optionable): Savings & Loan
http://biz.yahoo.com/p/g/gdw.html
STATUS: Another financial stock that has formed an ascending wedge, this one on the end of a 7.5-month cup base. The wedge has formed at the point in the pattern where usually a handle forms; this is not the best handle we could have, but this wedge is nicely formed and there have been a couple of volume spikes what could presage a breakout. Volume Friday was higher at 875,100 (avg. 786,000) as GDW moved up from its 18 day MVA at 63.28. We look for a breakout over the February highs in the pattern. High relative strength, decent money flow. Target: 70
BUY POINT: 65.10 on volume of 1.06 million or higher. Stop advisory (7%): 60.54
POSITION: May $60 calls to buy (GDW EL).
http://www.investmenthouse.com/ct/gdw.html
MAS (Masco--$28.15; +0.08; optionable): Manufacturing
http://biz.yahoo.com/p/m/mas.html
STATUS: MAS broke out of a 14-month base (the last half of which was a cup with handle that set up the breakout) in late February, and as volume fell back over the last three days, the stock pulled back and is testing the breakout. It is currently holding support at the 28 range, and can test back to the 10 day MVA (27.38) and still remain above the buy point of 27.20. Looking for the move back up and over the February high at 28.98. Volume fell to 1.6 million (avg. 2 million). Money flow is strong, good buying. Target: 34
BUY POINT: Aggressive: 28.70 on volume in the range of 2.5 million. Stop advisory (7%): 26.69
POSITION: Stock and/or July $25 calls to buy (MAS GE).
http://www.investmenthouse.com/ct/mas.html
PZB (Pittston Brinks--$23.05; -0.18; no options): Security Services
http://biz.yahoo.com/p/p/pzb.html
STATUS: A lateral pattern that is an extended handle to a 9-month cup/saucer base with highs near 25. The sideways movement spanned the month of February, and within PZB has thrown a few volume spikes, which signal the potential for an upside move. The stock threw a decent one Thursday but did not move much, which is the characteristic we like to see on such spikes. Friday the stock showed a tight doji on lower volume (2486,000; avg. 135,000). Looking for the breakout over 23.85, the February high. Strong money flow. Target: 29
BUY POINT: 23.95 on rising volume (250,000 or higher). Stop advisory (7%): 22.27
POSITION: Stock and/or
http://www.investmenthouse.com/ct/pzb.html
LTD (The Limited--$18.95; +0.94; optionable): Retail
http://biz.yahoo.com/p/l/ltd.html
STATUS: Still in its 16-month base (highs near 28) but has had a nice uptrend from the September lows below 10. After a nice breakout run off the 18 day MVA in February on a breakout from a cup with handle, LTD ran to the February high near 19 and began forming an ascending wedge from which it made a breakout move Friday. Since volume remained below average (2 million; avg. 2.2 million), though the stock cleared some resistance at 18.55 and 18.65, we are putting a buy point over the highest price in the pattern at 18.98. Looking for volume to ramp up to breakout levels for taking potential positions. Strong money flow, high relative strength. Target: 23
BUY POINT: 19.08 on volume of 3 million or better. Stop advisory (7%): 17.74
POSITION: Stock and/or May $17.50 calls to buy (LTD EW).
http://www.investmenthouse.com/ct/ltd.html
COHU (Cohu Inc--$24.67; +1.63; optionable):
http://biz.yahoo.com/p/c/cohu.html
STATUS: COHU roared out of a 7.5-month base in late February (the stock formed a reverse head and shoulders-type pattern August through December within the larger base) after correcting back below all its moving averages. The breakout move was launched from the 200 day and 50 day MVAs, taking COHU to the February highs near 25. After testing the breakout on a pullback to the 10 day MVA (23.09), it lunged back up in a high volume move off of the support. Looking for the stock to continue the move; after the rally Friday we may get a test of the 24 level before COHU resumes the breakout. A strong move, however, and may keep blasting up if the market cooperates (volume 367,900; avg. 98,200). Strong money flow, high relative strength. Target: 30
BUY POINT: 24.80 on continued strong volume. Stop advisory (7%): 23.06
POSITION: Stock and/or May $22.50 calls to buy (QCH EX; 63 open interests).
http://www.investmenthouse.com/ct/cohu.html
WOR (Worthington Industries--$15.10; +0.39; optionable): Steel, Iron
http://biz.yahoo.com/p/w/wor.html
STATUS: This stock has had a nice uptrend from the December lows around 6.50, just after mid-way making the September dive but recovering nicely to a new high in December (14.84). From there, WOR has formed a shallow base, and for the last week has tested its 50 day MVA (14.41), slightly higher support after the stock on the January and February lows found lower support at its up trendline (connects with December lows as well). Friday it opened at the 18 day MVA and rose on higher volume (210,900; avg. 198,000). We are looking for a breakout on continued strong volume. Money flow and relative strength look good! Target: 18
BUY POINT: Breakout: 15.30 on volume of 267,300 or higher. Stop advisory (7%): 14.23
POSITION: Stock and/or June $12.50 calls to buy (WOR FV).
http://www.investmenthouse.com/ct/wor.html
SXT (Sensient Technologies--$21.93; +0.64; optionable): Food
http://biz.yahoo.com/p/s/sxt.html
STATUS: In a year-long double bottom with handle base. SXT corrected back a bit too far in the handle (below the 200 day MVA in February) but flew back up to move over the handle high in the pattern (December high at 21.15) for the breakout. However, that move was cut short and the stock tested on low volume for three days, forming a short handle to a more recent 8-week cup. Making a breakout move Friday on decent volume, the stock remains a buy up to 22.72 (270,900; avg. 211,000). Money flow and buying are excellent. Target: 26
BUY POINT: 22 on continued strong volume. May get a slight pullback Monday after the strong move, before the stock resumes the breakout. A buy up to 22.72. Stop advisory (7%): 20.46
POSITION: Stock and/or July $20 calls to buy (SXT GD).
http://www.investmenthouse.com/ct/sxt.html
HET (Harrah's--$42.19; +1.75; optionable): Resorts, Casinos
http://biz.yahoo.com/p/h/het.html
STATUS: HET had a very nice run from the September lows near 23 to the January high at 41.40. It corrected back to the 50 day MVA in early February and moved back up toward that high, completing a 6-week v-bottomed cup with handle from which it broke out Friday on strong volume (1.76 million; avg. 811,400). It remains a buy on the move up to 43.16. HET has excellent money flow, high relative strength, and good buying. Target: 49
BUY POINT: 42.30 on continued strong volume. Stop advisory (7%): 39.34
POSITION: Stock and/or May $40 calls to buy (HET EH).
http://www.investmenthouse.com/ct/het.html
CARS (Capital Automotive--$21.73; +0.26; no options)
http://biz.yahoo.com/p/c/cars.html
STATUS: Not the first time we have looked at CARS (it formed another ascending wedge last summer). Breaking out of another (5-week) ascending wedge pattern on good volume (221,400; avg. 159,000). The stock just cleared resistance at 21.70 but is just off the buy point; however, we look for it to make that price from here. The pattern formed at the top of an outstanding uptrend off the November and December lows near 12.50. Money flow is excellent. Target: 26
BUY POINT: 21.80 on volume of 215,000 or higher. Stop advisory (7%): 20.27
POSITION: Stock.
http://www.investmenthouse.com/ct/cars.html
Trades on less than 100,000 average daily volume:
LOGI (Logitech Intl--$43.96; +2.29; no options): Peripherals
http://biz.yahoo.com/p/l/logi.html
STATUS: Has been trending up all the way from the September low (near 17) to the recent February high (43.95). The stock grabbed that high after a couple of 18 day MVA bounces that were set up by a correction to the 50 day MVA in January. The stock has made another correction back near that support, which helped set up Friday's strong bounce from the 18 day MVA (41.85). Volume was solid at 61,200 (avg. 46,000). We look for another series of bounces but first the stock looks ready to add to this move. Outstanding money flow and buying, relative strength breaking out. Target: 53
BUY POINT: 44.25 on continued strong volume. Stop advisory (7%): 41.15
POSITION: Stock.
http://www.investmenthouse.com/ct/logi.html
CONTINUED PLAYS:
Covered Call:
BMS (Bemis--$56.78; -0.18; optionable): Packaging
http://biz.yahoo.com/p/b/bms.html
STATUS: Has edged higher (our sell point for the covered call play is 55.95, which BMS has not hit yet) since we wrote the play last Wednesday. However, both Thursday and Friday the stock was giving signs that it can move back down, trying to move higher on decreasing volume, then actually pulling back on even lower volume Friday (though the move was small). Has potential support at 56, so our buy point remains just below that. Volume down to 291,900 (avg. 217,100).
CALL SELL POINT: 55.95 on continued strong volume.
POSITION: April $50 calls to sell (BMS DJ)
http://www.investmenthouse.com/ct/bms.html
TEST OF BREAKOUT: Some of these stocks are moving back on low volume to test the breakout. We often take profits on option plays when they start to pullback on the breakout move and then get back in when the stock bounces up off of the breakout point. This second move is where some of the biggest gains are made.
PH (Parker Hannifin--$50.20; +0.38; optionable): Manufacturing:
http://biz.yahoo.com/p/p/ph.html
STATUS: Testing the breakout from the ascending wedge, while holding support at the 10 day MVA (49.59). Volume was strong Friday, surging to 870,200 (avg. 604,000), and with that and the move up, PH looks ready to head back up for another leg. Strong money flow and buying. Target: 59. February high reached on the breakout is at 51.43.
BUY POINT: Aggressive: 50.45 on continued strong volume. Stop advisory (7%): 46.92
POSITION: Stock and/or May $45 calls to buy (PH EI).
http://www.investmenthouse.com/ct/ph.html
SWK (Stanley Works--$50.14; -0.29; optionable): Tools
http://biz.yahoo.com/p/s/swk.html
STATUS: Made a nice breakout from the 7-week cup with handle, and now is testing the move, pulling back from the breakout high of 51.03 on decreased volume (469,500; avg. 427,100). Showing a tight doji both Thursday and Friday on the low volume, SWK can potentially hold support at 49.90, a price hit twice in the last 4 days. May just be taking a short breather here, but if it does make a more extended pullback, support in the range of the 10 day MVA (48.33). Strong money flow and excellent buying. Target: 57
BUY POINT: Holding positions taken on the breakout. From here: 51.10 on volume of 550,000 or higher. Stop advisory (7%): 47.52.
POSITION: Stock and/or July $45 calls to buy (SWK GI).
http://www.investmenthouse.com/ct/swk.html
VLY (Valley National--$34.90; +0.22; optionable): Regional Banks
http://biz.yahoo.com/p/v/vly.html
STATUS: Made the good run off the 50 day and 18 day MVAs but the last 2 days volume fell off abruptly (to 31,800 Friday; avg. 74,000). The stock held on the low at 34.50, a level of some support on the breakout, so can head up from here if volume comes in the next day or two. After the move up off the 50 day MVA following a strong run up the 18 day MVA, we expect that pattern of holding the 18 day MVA to resume. Strong money flow. Target: 41
BUY POINT: New buy point: 35.05 on volume of 100,000 or better. Stop advisory (7%): 32.60
POSITION: Stock and/or June $30 calls to buy (VLY FF; 50 open interests).
http://www.investmenthouse.com/ct/vly.html
ROH (Rohm & Haas--$39.25; +0.84; optionable): Chemicals
http://biz.yahoo.com/p/r/roh.html
STATUS: Moved up Friday after testing the breakout from the year-long flat base/trading range pattern. The stock had pulled back to support (10 day MVA, 38.38) and bounced after a lower tap at some other price support at the 38 level. Volume remained above average at 1.2 million (avg. 921,000), but we want to see it ramp back up to support the stock's bounce. ROH did pull off its high at 39.80, but it held above the previous February closing price at 39.09. Strong money flow and high relative strength.
Target: 47.
BUY POINT: Holding current positions. New buy point: 39.85 on volume of 1.3 million or higher. Stop advisory (7%): 37.06
POSITION: Stock and/or July $35 calls to buy (ROH GG).
http://www.investmenthouse.com/ct/roh.html
FDX (Fedex Corp--$58.45; +0.59; optionable): Delivery Services
http://biz.yahoo.com/p/f/fdx.html
STATUS: Testing the breakout from the 6.5-week ascending wedge pattern. After a one-day pullback on lower volume (and showing a tombstone doji, too, which is bearish), FDX held at 57.61 (opening price) and was up over a half-point on a nice rise in volume (2 million; avg. 1.7 million). It looks like it wants to move up from here. It wasn't a huge move, but may just be getting started. Good money flow and buying. Target: 67
BUY POINT: Holding current positions taken on the breakout. New buy point from here: 59 on continued strong volume (2.5 million and higher). Stop advisory (7%): 54.87
POSITION: Stock and/or July $55 calls to buy (FDX GK).
http://www.investmenthouse.com/ct/fdx.html
BASING/TRADING RANGES:
RTN (Raytheon--$39.15; +0.46; optionable): Aerospace/Defense
http://biz.yahoo.com/p/r/rtn.html
STATUS: Made the buy point for the breakout from the pennant (38.90) on Wednesday, but hasn't been able to move higher from there; it made it to 40 Friday but pulled back with a tight doji. The pattern is now more like a flat base with the Wednesday move up. Volume was just higher (3 million; avg. 2.2 million). We will look for more consolidation in the pattern above the short term MVAs (10 day, 38.35; 18 day, 37.79) and continue to look for a breakout. Excellent money flow. Target: 45
BUY POINT: Breakout: 40.10 on volume of 3 million or higher. Stop advisory (7%): 37.29
POSITION: Stock and/or May $35 calls to buy (RTN EG).
http://www.investmenthouse.com/ct/rtn.html
WSTC (West Corp--$28.40; +0.27; optionable): Business Services
http://biz.yahoo.com/p/w/wstc.html
STATUS: Trying to muster the breakout from its 8-month cup with handle pattern. The stock tested the 18 day MVA on the low Friday (27.40), then bounced up to clear the buy point of 28.20 in the handle. Volume, however, was even further below average, so that will have to pile in to make this a solid breakout (67,700; avg. 126,500). Money flow and buying remain strong. Target: 34
BUY POINT: Holding positions taken at 28.20; new entry points over the intraday high of 28.40 on volume 190,000 or higher. Stop advisory (7%): 26.46
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--$25.15; -0.08; optionable): Food
http://biz.yahoo.com/p/i/ibc.html
STATUS: Tightening up in the rolling pattern (moving between 26 and, roughly, 23). IBC continued its pullback to support, the 18 day MVA (25.12), and while volume was low the previous three days, it spiked up to average levels Friday (131,500). On the loss that isn't the best price/volume action, but the stock held the support. Looking for a bounce back up and breakout over the highs at the 26 range. Strong money flow. Target: 31.25.
BUY POINT: Aggressive: Over 25.50 on continued strong volume. Breakout: 26.35 on volume of 180,000 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
UOPX (University of Phoenix Online--$38.03; +1.35; optionable): Internet Software
http://biz.yahoo.com/p/j/jci.html
STATUS: Still looks great in the 9-week cup with handle base that is inside the 7.5-month cup. Friday the stock moved up from support at 36 (the 10 day MVA, tapped on the low), and volume was big, blasting above average to 302,700 (avg. 124,000; no news). Looking for the breakout over handle high at 38.50. High relative strength. Target: 46
BUY POINT: Breakout: 38.60 on volume of 203,000 or higher. Stop advisory (7%): 35.90
POSITION: Stock and/or June $30 calls to buy (UBY FF).
http://www.investmenthouse.com/ct/uopx.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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stock recommendation
stock option
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