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Begin Part 2 of 2
TEAM TRADES
OSSI: We jumped on OSSI when it moved off of the 50 day MVA in late January, getting a nice but brief pop on it before it sold back over February and came back to rest at the 50 day MVA once again. We were looking for a bounce again, and Monday saw it move up from a doji right on the 50 day MVA with a nice volume gain. We were ready for it today when it continued that move. Now there was some resistance at 24.20, and in an ideal world we wanted it to clear that resistance on stronger volume. The stock started out like a ball of fire, rallying up to 24 in the first half hour, but we were not chasing as we thought the overall market would have to come back after any move higher. Right after the release of the ISM services, OSSI, started back, falling to 23. It found support there and then rallied over the next hour to our buy point at 25.25. Volume was good. It then pulled back to test the move again, but held at 23.80 and started back up. It stopped again at 24.20, backed down, made a higher low and started back up. Looked like an ascending wedge forming intraday. It broke back over 24.25 and we jumped in with a stock purchase. The breakout did not hold and it spend the next 2.5 hours edging back down. It made an abrupt drop to 23, but in the last half hour bounced back up to close at 23.50. After hours some higher trades came in near 24; we will see what happens. Volume was very good on the session. The one regret we had is that we did not move in sooner on the bounce off of the 50 day MVA. We saw the good bounce start Monday and could have come in a bit earlier.
THE PLAYS:
Good movers: OSIS moved off its 18 day MVA on strong volume and looks ready to start the leg up. A hold from here after hitting the buy point today at 24.25 (new buy point over 24.28, the intraday high, on continued rising volume).
Stop Advisories: ENZN (41.50), HD (48.42)
Continued Plays:
LOGI (Logitech--$44.48; -1.42; no options): Peripherals
http://biz.yahoo.com/p/l/logi.html
STATUS: Pulling back on lower volume as it tests the recent run off the 50 day MVA that started a week ago. The stock is holding above the February high (43.95) and showing a doji (hammer, which can signal a move back up) on the pullback. On a continued hold at this range and then move back up, can look at taking new positions, or adding-to for those taken at the weekend buy point (44.25). Volume was lower at 67,900 (avg. 46,000). Excellent money flow and buying. Target: 53
BUY POINT: Aggressive: 45 (breakout high was 46.04) on rising volume. Stop: 41.85
POSITION: Stock.
http://www.investmenthouse.com/ct/logi.html
Previously covered stocks that look ready for a play:
COTT (Cott Corp--$17.93; -0.07; optionable): Food
http://biz.yahoo.com/p/c/cott.html
STATUS: Broke out of a 2-month cup base in late January, tested and broke out again, and now has tested again and is holding the 18 day MVA (tapped on the low of 17.75). Showing a tight doji on the slight loss, volume started to rise Tuesday (162,800; avg. 325,000), still below average but with the hold at support can give a move back up from here. May decide to consolidate for another day or two depending upon the market, but we are looking for a good bounce from the 18 day. The stock tried to do the same last week, but after some selling on the 25th it's needed more time. Good money flow. Target: 22
BUY POINT: Aggressive: 18.50 on volume of 188,000 or higher. Stop Advisory (7%): 17.21
POSITION: Stock and/or July $15 or $17.50 calls to buy (CQ GC or GW).
http://www.investmenthouse.com/ct/cott.html
New:
Covered Calls: On a couple of previous upside plays:
ITT (Itt Industries--$61.12; -1.29; optionable): Manufacturing
http://biz.yahoo.com/p/i/itt.html
STATUS: Has had quite a run after the test of the breakout (covered recently), chalking up 8-points. The stock pulled off the top of it Tuesday with volume decreasing to 662,600 (avg. 365,409), and we are looking for it to make a pullback to the 18 day MVA at the 58 range for a potential covered call play on stockholdings. Upon hitting support, the calls can be bought back at a lower value.
SELL POINT: Aggressive: 61 on rising volume. Potential support at 60.
POSITION: April $55 calls to sell (ITT DK). At the close of trading were selling for $6.20. On the 3-point move can drop in value to about $3.25 (delta 0.99).
http://www.investmenthouse.com/ct/itt.html
CEY (Certegy--$39.94; +0.07; optionable): Software
http://biz.yahoo.com/p/c/cey.html
STATUS: Had a super breakout run from the flat base, and is topping out now on the move, showing some churning on the slight move up but on surging volume (538,000; avg. 209,409). Looking for a turn down and fall to the 37 range for a pick-up of a couple of points on a potential covered call sale play. Again, a hold at the support, our target of the 18 day MVA, would be the point to buy back the calls at a lower price.
SELL POINT: 39.75 on continued rising volume (preferably).
POSITION: April $35 calls to sell (CEY DG). Selling at the close at $5.10; for the fall to support they can fall in value to around $2.60 (delta 1.00).
http://www.investmenthouse.com/ct/cey.html
New:
BLC (Belo Corp--$22.09; -0.09; optionable): Media: Publishing
http://biz.yahoo.com/p/b/blc.html
STATUS: Moving in a flying plateau above support (the 10 day MVA at 21.76), a consolidation that developed after an impressive breakout run (including a mid-February test of the breakout that spanned three quick days) from a 16-month rolling range. Volume is on the rise again after falling off immediately after the second breakout after the test (slightly lower Tuesday at 445,800; avg. 253,000). The company reported this evening that earnings should come in higher than expectations. Looking for a breakout from this new pattern, and the news can help. Huge money flow and buying. Target: 26
BUY POINT: 22.50, volume of 600,000 or higher. Stop Advisory (7%): 20.93
POSITION: Stock and/or July $20 calls to buy (BLC GD).
http://www.investmenthouse.com/ct/blc.html
IPCR (Ipc Holdings--$31.11; +0.45; optionable): Insurance
http://biz.yahoo.com/p/i/ipcr.html
STATUS: The stock has been in a super uptrend since the first of the year 2000 and has made a nice-looking pullback to support (18 day MVA, 21.21) after breaking out of a six and a half week saucer base at the top of the uptrend. From the moving average Tuesday, BLC moved higher with volume on the rise (159,400; avg. 348,090); looking for a breakout after this test. Outstanding money flow and buying. Target: 37.
BUY POINT: Aggressive: 31.50 (resistance possible at 31.30) on volume of 400,000 or higher. Stop Advisory (7%): 29.30
POSITION: Stock and/or June $30 calls to buy (QHE FF; low open interests).
http://www.investmenthouse.com/ct/ipcr.html
For a review of frequently asked questions, please use the link below:
http://www.investmenthouse.com/1questions.htm
Good Investing!
Jon L. Johnson and the Technical Traders 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 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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