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stock recommendation, stock pick
Begin part 2 of 2
THE PLAYS:
Good Movers: SCS hit the buy point in the flying plateau (it tested back to the 50 day MVA after falling out of the pattern, but broke out over the resistance today. Volume was low, however. EAT, previously covered on the 50 day MVA bounce play, headed back up again on strong volume.
Targets hit Wednesday: SLGN (34)
Stop Advisories: ISIL (33, put)
Best Plays:
1) ACDO: Rising volume and a move up in the ascending wedge.
2) SFD: Tight doji in the handle.
3) ESST: Breaking out.
4) COTT: Looks ready with a big volume spike.
5) CHD: Promising
6) PZB: Tight in the pattern with volume rising again.
7) COHU: Can look at selling some covered calls.
8) SXT: Pulling back in the handle.
9) RTN: Trying to move up!
NEW PLAYS:
ACDO (Accredo Health--$53.69; +0.77; optionable): Health Services
http://biz.yahoo.com/p/a/acdo.html
STATUS: Back to ACDO again. The stock broke out off of a bounce from its 18 day MVA at the start of last month, and has been consolidating off the high of 56.50 for a month. Recent support is the 18 day MVA at 52.58, from where ACDO moved up on rising volume Wednesday (374,100; avg. 588,000) in an ascending wedge pattern it's been forming for the last 2 weeks. Looking for another breakout from here on the move off the 18 day MVA. Excellent money flow. Target: 66
BUY POINT: Aggressive: 54.89 on volume of 794,000 or higher. Stop Advisory (7%): 51.05
POSITION: Stock and/or May $50 calls to buy (DZU EJ).
http://www.investmenthouse.com/ct/acdo.html
SFD (Smithfield Foods--$25.00; +0.20; optionable): Food
http://biz.yahoo.com/p/s/sfd.html
STATUS: In a 12-week cup with handle base, highs near 27. The handle has been operating on low, below average volume as we like, after some early volatility in the right side of the cup things are settling down nicely. The stock showed a tight doji at the 10 day MVA on Wednesday, volume rising a bit to 275,800 (avg. 695,000); the 18 day MVA has been main support for the last several days at 24.74. Look for a move up from here for a breakout over the February high near 26. Decent money flow and solid buying.
Target: 31
BUY POINT: Breakout: 26.09 on volume of 1 million or higher. Stop Advisory (7%): 24.26
POSITION: Stock and/or July $22.50 calls to buy (SFD GX).
http://www.investmenthouse.com/ct/sfd.html
ESST (Ess Technology--$24.90; +1.89; optionable): Semiconductor
http://biz.yahoo.com/p/e/esst.html
STATUS: Breaking out of a 7-week double bottom with handle. The stock has moved just above the 5% limit for buying on the breakout, but we can look at taking some partial positions here (might get an early morning test of 24.90) and then after a test, add to on another breakout. Volume was up to 3 million on the move (avg. 1.6 million). Big money flow, high relative strength. Target: 30
BUY POINT: 25 on continued strong volume. Stop Advisory (7%): 23.25
POSITION: Stock and/or July $22.50 calls to buy (SEQ GX).
http://www.investmenthouse.com/ct/esst.html
Short updates on stocks from Tuesday's report:
CEY ($40.22; +0.28): Covered call. Edged higher on lower volume. Getting ready for the pullback.
ITT ($61.85; +0.73): Covered call. Sell point is 61 but after a dip to 60.63 the stock bounced back over that price. Volume was sharply lower so we continue to look for the fall.
COTT ($17.97; +0.04): Opened at the 18 day MVA from where we are looking for another run to commence. Volume spiked up sharply on the small gain, so look for a move up!
IPCR ($31.25; +0.14): A slight move up in the test of the breakout despite volume rose above average levels. Showed a doji on the move; can pull back but expect a hold at support (18 day MVA, 30.65).
BLC ($22.40; +0.31): Broke out of the lateral pattern (high at 22.95) but sold back. It held above the consolidation with volume slightly lower. Look for support at the 22 range on a continued fall.
New from Monday:
CHD (Church & Dwight--$31.08; +0.30; no options): Cleaning Products
http://biz.yahoo.com/p/c/chd.html
STATUS: Tapped support at the 18 day MVA on the low of 30.63, then bounced, reaching a high of 31.50 though the stock pulled back to close. Volume shot above average to 167,000 (avg. 134,000), so look for CHD to pick back up and continue the move. Would have liked to see it hold the high, though, since that price cleared the recent lateral pullback consolidation. Money flow remains at excellent levels. Target: 38
BUY POINT: Aggressive: 31.55 on volume of 180,000 or higher. Stop advisory (7%): 29.34
POSITION: Stock.
http://www.investmenthouse.com/ct/chd.html
TUES (Tuesday Morning--$22.15; +0.45; no options): Discount retail
http://biz.yahoo.com/p/t/tues.html
STATUS: Gapped higher on Tuesday (over the buy point of 21.10) and looked ready to pull back, but delayed that action as it inched higher today. Volume fell back sharply to 313,700 (avg. 141,000) so we will look for that pullback to test 20-21. TUES broke out of a cup with handle on Monday, so after the pullback (test of the breakout) we can look at getting into another run up. Excellent money flow and buying. Target: 25.50 (initial).
BUY POINT: After a test of 20-21 and a bounce from there.
POSITION: Stock.
http://www.investmenthouse.com/ct/tues.html
CTX (Centex--$62.16; +2.26; optionable): Materials & Construction
http://biz.yahoo.com/p/c/ctx.html
STATUS: Broke out of the 2-month rolling pattern on Monday, but volume fell back Tuesday with the stock, showing a doji on the move. CTX took off again Wednesday, however, taking out the Monday breakout high at 61.93 even with volume falling again (1.27 million; avg. 941,000). Will need to pick up volume again to support the move. Remains a buy on the breakout up to 63 if it does can. Excellent money flow, high relative strength. Target: Initial is 68 as the amplitude of the rolls up and down is $8.
BUY POINT: Holding positions taken on the buy point at 60.12.
POSITION: Stock and/or July $60 calls to buy (CTX GL).
http://www.investmenthouse.com/ct/ctx.html
New from the weekend:
GDW (Golden West Financial--$65.00; -0.18; optionable): Savings & Loan
http://biz.yahoo.com/p/g/gdw.html
STATUS: Weak breakout in the ascending wedge; after tapping 66.60 on Tuesday's high on that move, pulled back intraday and again on Wednesday, showing a tight doji above the 10 day MVA (64.39). Volume was higher at 677,600 (avg. 786,000), though still low and below average. The stock appears to be forming a handle to the 7.5-month cup base now, so new buy point for a breakout is over 66.60. Target: 70 (initial; former high); after that 67
BUY POINT: A hold for positions taken at 65.10. New buy point for breakout: 66.70 on volume of 1.2 million or higher. Stop Advisory (7%): 62.03
POSITION: May $60 calls to buy (GDW EL)
http://www.investmenthouse.com/ct/gdw.html
MAS (Masco--$28.80; +0.67; optionable): Manufacturing
http://biz.yahoo.com/p/m/mas.html
STATUS: Made a nice move up Monday in the test of the breakout and looked ready to start another leg up, but MAS fell back the next day despite strong volume. It decided to bounce Wednesday when volume, of course, fell back below average, so the price/volume action the last 2 days isn't the greatest. However, the stock is holding the 28 support and volume can ramp back up to break it out (down to 1.6 million; avg. 2 million). Excellent money flow. Target: 34
BUY POINT: A hold for current positions taken at 28.70 (aggressive buy point). New buy point over 28.98 on continued rising volume.
POSITION: Stock and/or July $25 calls to buy (MAS GE).
http://www.investmenthouse.com/ct/mas.html
PZB (Pittston Brinks--$23.10; -0.04; no options): Security Services
http://biz.yahoo.com/p/p/pzb.html
STATUS: Showing a tight doji in the month-long lateral pattern that is an extended handle to a 9-month cup/saucer base. Volume has been high the last week, and rose again Wednesday to 218,900 (avg. 135,000). Looking for a breakout on the strong volume; the stock has thrown 2 decent volume spikes in the pattern. Excellent money flow. Target: 29
BUY POINT: 23.95 on rising volume (250,000 or higher). Stop advisory (7%): 22.27
POSITION: Stock.
http://www.investmenthouse.com/ct/pzb.html
LTD (The Limited--$17.93; +0.18; optionable): Retail
http://biz.yahoo.com/p/l/ltd.html
STATUS: Fell below the 18 day MVA on Tuesday, which had been most recent support in the ascending wedge pattern, Wednesday closing a cent below that former support. Volume was lower at 2.1 million (avg. 2.3 million). LTD is holding (on the opening price of 17.60) at an up trendline that connects December and January lows, so that level may help bump the stock back over the 18 day MVA on stronger volume. Still a decent pattern though the selling has cause a bit of trouble on the support break. Target: 23
BUY POINT: Aggressive: Over 18 on a strong rise in volume. Breakout: 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
Swapping to a covered call:
COHU (Cohu Inc--$28.62; +0.318; optionable): Semiconductor
http://biz.yahoo.com/p/c/cohu.html
STATUS: Continued Monday's ballistic breakout (occurred after the test of the breakout from a 7.5-month base) but the move is losing steam, evidenced by the smaller gain (closed with a hanging man doji) on stronger and huge volume (397,000; avg. 98,000). Looking for a pullback to test the 10 day MVA range at 25.46 (near the February high). We can look at selling some covered calls for the move, buying those back when COHU hits the support. Upside Target: 30
SELL POINT: 28, for a fall to the 25.50 range.
POSITION: April $25 calls to sell (QCH DE).
http://www.investmenthouse.com/ct/cohu.html
WOR (Worthington Industries--$15.25; -0.22; optionable): Steel, Iron
http://biz.yahoo.com/p/w/wor.html
STATUS: Pulling back the last two days, volume decreasing (321,000; avg. 198,000), after breaking out of the 3-month shallow cup base. It was a short breakout, and WOR today fell below the buy point of 15.30 in the test, but it bounced back from the 10 day MVA on the decreasing volume once again. Will look for a continued hold at that range for a move back up and another breakout, and maybe this one will pack more punch. High money flow. Target: 18.50
BUY POINT: A hold for positions taken on the breakout. New buy point: 15.60 on rising volume (325,000 or higher). Stop Advisory (7%): 14.51
POSITION: Stock and/or June $12.50 calls to buy (WOR FV).
http://www.investmenthouse.com/ct/wor.html
SXT (Sensient Technologies--$21.50; +0.02; optionable): Food
http://biz.yahoo.com/p/s/sxt.html
STATUS: Continues to form a new handle to the year-long double bottom with handle base. SXT pulled back for the third day, and Wednesday volume fell back below average to 198,000 (avg. 211,000); the stock tapped the 10 day MVA on the low of 21.25 and showed a tighter hammer doji (looser on Tuesday). SXT can continue to move gradually lower in the handle as volume keeps falling, and it would likely help a breakout for it to do so, making the handle more proportionate to the double bottom base. Money flow and buying are excellent. Target: 26
BUY POINT: 22.15 on volume of 317,000 or higher. Stop Advisory (7%): 20.60
POSITION: Stock and/or July $20 calls to buy (SXT GD).
http://www.investmenthouse.com/ct/sxt.html
HET (Harrah's--$42.03; -1.18; optionable): Resorts, Casinos
http://biz.yahoo.com/p/h/het.html
STATUS: Gave the nice breakout Friday and Monday, and now has pulled back to test the move, showing Wednesday a hammer doji off a test of the 10 day MVA (41.34). Volume was lower at 1.5 million (avg. 811,500) but was higher on Tuesday's reversal session. That is not a good sign. The hammer can mean a move back up, but that doesn't mean it will come tomorrow. Volume is still high and HET may need another day or two of consolidation. Will look at adding to positions (taken at the buy point of 42.30) on a move back up. High relative strength and strong buying. Target: 49.
BUY POINT: A hold for positions taken at 42.30. New buy point (aggressive): 42.50 on volume in the range of 1.5 million. Stop Advisory (7%): 39.53
POSITION: Stock and/or May $40 calls to buy (HET EH).
http://www.investmenthouse.com/ct/het.html
CARS (Capital Automotive--$22.06; +0.11; no options): REIT
http://biz.yahoo.com/p/c/cars.html
STATUS: Broke out of the 5-week ascending wedge Monday, and has inched higher since then, but showing little strength on the run. Volume shot higher Wednesday to 325,000 (avg. 159,000) but the stock just didn't move much (churning) and showed a hanging man doji. Looks like it has lost the momentum and can pull back in a test. CARS has already made 4 bounces from the 18 day MVA since December, so may enter a bigger correction, perhaps to the 50 day MVA at 20.82. Target: 26
BUY POINT: A hold for positions taken at 21.80 as long as it holds above support. 18 day MVA is at 21.45. New buy point: After the pullback and hold at 21.80 or higher.
POSITION: Stock.
http://www.investmenthouse.com/ct/cars.html
Trades on less than 100,000 average daily volume:
LOGI (Logitech Intl--$43.35; -1.13; no options): Peripherals
http://biz.yahoo.com/p/l/logi.html
STATUS: Made the nice breakout move off of the 18 day MVA then Tuesday started a pullback. The stock held above the 10 day MVA today as volume continued to fall, showing a tight doji above the support. It looks like it can hold support here, though we would have preferred the stock to hang above the buy point of 44.25. Can look at taking aggressive positions on a move back over that. Target: 51
BUY POINT: Aggressive: 44.25 on a strong rise in volume. Stop Advisory (7%): 41.15
POSITION: Stock.
http://www.investmenthouse.com/ct/logi.html
CONTINUED PLAYS:
Covered Call:
BMS (Bemis--$57.26; -0.36; optionable): Packaging
http://biz.yahoo.com/p/b/bms.html
STATUS: Pulled back from the new high the stock hit Tuesday (58.24), showing a doji on lower volume. We might see a drop of a couple of points if this hammer doji doesn't hold it up, and on a move below the intraday low of 57.12, will continue to look for a pullback to test the 18 day MVA at the 55 range (54.95 today) for the covered call play. Getting a little tight, but nimble traders can take advantage.
SELL POINT: 57 for the fall to 55.
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--$54.42; +1.92; optionable): Manufacturing:
http://biz.yahoo.com/p/p/ph.html
STATUS: Making a great move. Monday PH blasted up from a test of the breakout (PH broke out of an ascending wedge late February), and after a pullback Tuesday it turned back up again today, making a new high on increased volume (990,200; average 604,000). A bit beyond where we would chase it, but are riding current positions. Target: 59.
http://www.investmenthouse.com/ct/ph.html
SWK (Stanley Works--$50.59; -0.41; optionable): Tools
http://biz.yahoo.com/p/s/swk.html
STATUS: SWK has bee quite impressive, breaking out with a big gapping move toward the end of February, and then after a rest shooting up again Monday with a big volume spike. It dropped the last two sessions and finds itself back in the short consolidation range the set up Monday's move, but today the pattern was a doji with volume back up at 556,400 (average 427,100). The pattern suggests another attempt to make a run, and we can look at new or additional positions on a move over 51.40, still targeting 57. Excellent buying.
BUY POINT: Bounce: 51.50 on increased volume. Stop: 48.50.
POSITION: Stock and/or July $45 calls to buy (SWK GI).
http://www.investmenthouse.com/ct/swk.html
VLY (Valley National--$35.11; -0.24; optionable): Regional Banks
http://biz.yahoo.com/p/v/vly.html
STATUS: Has made a steady run the last two weeks off of the 50 day MVA (then 33, now 33.52). We were looking for a pullback after the high-volume doji on Monday, but VLY surged up again yesterday, although volume was not strong, and it gapped back for a doji today on volume that again was above the average (86,500; average 74,100). If we get the pullback this time, we are looking for the short-term MVA's to hold support, with the 10 day at 34.67, although it could go to the 18 day at 34.33. Still targeting 41, and we can look at new positions on a hold of support and move up. Strong money flow.
BUY POINT: New buy point: On a hold of the 34.30 range, a bounce over 34.75 on continued strong volume.
POSITION: Stock and/or June $30 calls to buy (VLY FF; 50 open interests).
http://www.investmenthouse.com/ct/vly.html
ROH (Rohm & Haas--$39.61; +0.11; optionable): Chemicals
http://biz.yahoo.com/p/r/roh.html
STATUS: Pulled back immediately after its bit bounce up Friday and Monday, bit again is showing signs that it will hold support. Since its breakout from a flat base, ROH has been trending up steadily along the 10 day MVA (39.05), and today ROH showed a doji over that support, with volume shooting back up to 1.14 million (average 920,700). The high volume doji over support indicates a hold and continued move. We are targeting 47 with current positions, and looking for new positions on a bounce if it can continue to hold.
BUY POINT: Over 40 on continued strong volume. Stop advisory: 38.
POSITION: Stock and/or July $35 calls to buy (ROH GG).
http://www.investmenthouse.com/ct/roh.html
FDX (Fedex Corp--$60.00; -0.89; optionable): Delivery Services
http://biz.yahoo.com/p/f/fdx.html
STATUS: FDX made a nice move Monday, and since has edged back to test. A high volume doji signaled the possible retreat, but today's selling back was slight on diminished volume (1.73 million; average 1.7 million). Still targeting 67 with existing positions taken on the breakout from the recent wedge. We can eye new positions if FDX shows a continued light pullback that holds the recent highs 58.50-59 (10 day MVA at 58.42).
BUY POINT: On a light volume test of 58.50-59, a move back over 60 on increased volume. Stop advisory (7%): 55.89.
POSITION: Stock and/or July $55 calls to buy (FDX GK).
http://www.investmenthouse.com/ct/fdx.html
BASING/TRADING RANGES:
RTN (Raytheon--$39.55; +1.25; optionable): Aerospace/Defense
http://biz.yahoo.com/p/r/rtn.html
STATUS: Still trying to move after the initial thrust out of its pennant pattern failed. Last Friday RTN reached up to 40 but pulled back, again holding support at its 18 ay MVA (38.09). Today RTN continued to show life, bouncing up but volume was down at 2.42 million (average 2.24 million). This is the scenario we were looking at after the failed move last Friday, so we will see if it RTN can generate more strength and 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--$29.05; -0.09; optionable): Business Services
http://biz.yahoo.com/p/w/wstc.html
STATUS: Made the breakout Monday but has slowed the last two sessions, today showing a second consecutive loose doji as volume picked up a bit (184,400; average 126,500). Looking like a pullback to test the move, but the breakout move had a lot of volume, so we will look for a test to hold support at the recent high at 28.10 (10 day MVA at 28.27). It is right at the left side high of the 8-month cup with handle pattern (29.18), so after a test we will look for a move back over that level with strength behind it. Money flow and buying are strong. Target: 34
BUY POINT: Test: After holding 28 on a pullback, a move back over 29.18 on volume of 150,000 or better. Stop advisory (7%): 27.23
POSITION: Stock and/or July $25 calls to buy (HUD GE).
http://www.investmenthouse.com/ct/wstc.html
IBC (Interstate Bakeries--$24.60; -0.04; optionable): Food
http://biz.yahoo.com/p/i/ibc.html
STATUS: Not good, as IBC has skidded back steadily. Volume has not been very low, but the steady selling took it back through its 50 day MVA (24.69), and IBC closed just below that level after hitting down to 24.25 intraday. Maybe shaking out the last sellers. It will need to make a quick recovery over the 50 day to still be considered, and then any new positions will be aggressive on a strong bounce following that recovery. We will see. The highs in the rolling pattern are at 26.
BUY POINT: Aggressive: After recovering and holding over the 50 day, a move over 25 (short-term MVA's) on above average volume.
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--$38.35; -2.53; optionable): Internet Software
http://biz.yahoo.com/p/j/jci.html
STATUS: Definitely not good. The breakout from the 9-week cup with handle did not last, as UOPX gapped up and reversed off of Monday's 'tombstone' doji, and today it continued back on strong volume (763,400; average 123,700). However, it closed near the recent pattern high (38.50) and tapped its 10 day MVA at its low of 37.54. A strong fall, so we will have to see it hold to believe it can come back for another move. Not riding a move down.
BUY POINT: Will have to hold here and settle down on lower volume. Then the aggressive can look at a move over 39 on strong volume. Stop: 36.
POSITION: Stock and/or June $35 calls to buy (UBY FG).
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 pick
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