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stock recommendation, stock picking
Begin Part 2 of 2
TEAM TRADES
URS showed one of our favorite patterns: a combination cup with handle breakout followed by an ascending wedge: the cup with handle shakes them out and the ascending wedge builds up pressure for a really strong move higher. We got the first breakout of the cup in December and January. We were then watching for the breakout as the wedge formed and got it back on February 27. It then pulled back to the 18 day MVA last Thursday and bounced on strong volume Friday. Today we got another move higher and were ready to add to positions. 32.55 was the next buy point. Well, it cleared that on the open, running to almost 33. It then peeled down 32.70; they always do after jumping up out of the gates. Volume was decent at 30% of average, but with all of the great volume on the breakout of the cup with handle and then with the wedge, we were just looking for decent volume to get in. We issued the alert, catching on the way back up at 32.80 when the spread was 32.65 by 32.80; we were not going to argue the spread at this point. Turned out fine as the stock roared up to close at 34 on another big volume day. These patterns can lead to very big gains, and we add to the positions when they present themselves while we let them run.
THE PLAYS:
Good Movers: URS
Targets hit Monday: CARS (22.35)
Trailing Stop Advisory: EAT (33.50)
Stop Advisory: BVN (23.11), IPCR (29.30), CHD (29.75)
Watchlist stocks that look good today: ROH, RTN, ESST, GDW, SXT, COTT. Also:
VLY ($35.20; +0.08): Strong volume (no news) and the stock still holding that lateral pattern. Looks ready to move up in the test of the recent 50 day MVA run. Target is 41. Buy point 35.45 for stock and/or June $30 calls to buy (VLY FF). Volume up to 243,100 (avg. 82,000).
WSTC ($29.10; +0.05): Moving laterally after its previous 18 day MVA bounce (the first since the stock bounced from the 50 day in early February), in a test of that move. Showing its fifth consecutive doji, and the pattern is tightening up. Of interest: volume shot up to 319,000 (avg. 126,400), so the stock can try a breakout from here. Buy point is 29.35 for positions with stock and/or July $25 calls to buy (HUD GE).
Best Plays: (We like VLY and WSTC, above, as well).
1) HDWR: Moving up on rising volume.
2) MYG: Getting ready for another run.
3) SLVN: Low volume in a handle.
4) GPC: Still looks good in the handle!
5) BDK: Getting ready for a bounce.
6) SYY: The ascending wedge still looks good.
7) CEY: Still setting up for a covered call.
8) TUES: Picking up some steam.
9) HET: Lower volume and at support in the test.
10) SWK: A good-looking pullback.
NEW PLAYS:
HDWR (Headwaters--$13.15; +0.26; optionable): Metals & Mining
http://biz.yahoo.com/p/h/hdwr.html
STATUS: In an ascending wedge pattern that spans just over 4 months in the stock's 9-month cup base. HDWR traveled up its 200 day MVA to form the bottom to the base (lows from August at 8) and is tightening up now below resistance at 13.50 and the 50 day MVA (12.51) which became most recent support after the stock crossed back over near the first of the year. Looking for a breakout over resistance for taking partial positions; the stock will likely pull back into a handle before clearing the base and additional positions can be entered on a breakout from there. Volume was up Monday to 215,600 (avg. 207,000). Strong money flow. Target: 16.50
BUY POINT: Breakout: 13.60 on volume of 279,000 or higher. Stop Advisory (7%): 12.65
POSITION: Stock and/or May $10 calls to buy (HQK EB).
http://www.investmenthouse.com/ct/hdwr.html
MYG (Maytag--$40.67; +0.64; optionable): Appliances
http://biz.yahoo.com/p/m/myg.html
STATUS: In a flying plateau as it tests the breakout from its recent ascending wedge pattern. It was a super breakout, on big volume that has fallen back nicely on the consolidation (down Monday to 559,800; avg. 394,000). MYG moved up with volume falling lower, but the stock looks ready for a hold at the 40 level. On continued decreasing volume we'll see if MYG continues to keep this sideways movement. The 10 day MVA is just below at 39.18. Huge money flow and buying. Target: 48
BUY POINT: Breakout: 41.05 on volume of 532,000 or higher. Stop Advisory (7%): 38.18
POSITION: Stock and/or July $35 calls to buy (MYG GG).
http://www.investmenthouse.com/ct/myg.html
SLVN (Sylvan Learning--$25.85; -0.17; optionable): Education & Training
http://biz.yahoo.com/p/s/slvn.html
STATUS: SLVN is in a 7-month cup and now pulling back in a handle that for now has support at the 10 day MVA (25.70), lower support at the 18 day MVA/down trendline (August/January highs). While the stock has pulled back below the January highs (26 range), volume is falling off nicely in the handle, down Monday to 86,000 (avg. 449,000) with SLVN showing a tight doji above the 10 day. Looking for a move up and breakout over 27. Target: 32
BUY POINT: 27.05 on volume of 674,000 or higher. Stop Advisory (7%): 25.16
POSITION: Stock and/or May $22.50 calls to buy (NQV EX).
http://www.investmenthouse.com/ct/slvn.html
New from the weekend:
Breakouts:
FCS (Fairchild Semiconductor--$28.72; -1.63; optionable): Integrated Circuits
http://biz.yahoo.com/p/f/fcs.html
STATUS: Looked good Friday on a breakout move from its 8-week cup with handle (in a 22-month base), but the stock sold back Monday on high volume (3.1 million; avg. 1.38 million) on news of a stock offering. It tapped the 10 day MVA on the low of 28.35 before bouncing back up to close, so if it can hold there and consolidate on lower volume, it can try again to break out from a new handle. Target for a breakout is 36.
BUY POINT: 30.55 on on volume of 2 million or higher. Stop Advisory (7%): 28.41.
POSITION: Stock and/or May $25 calls to buy (FCS EE).
http://www.investmenthouse.com/ct/fcs.html
EXPE (Expedia--$64.00; +1.49; optionable): Internet Software
http://biz.yahoo.com/p/e/expe.html
STATUS: Volume was lower Monday but still above average; not bad but not powering higher. However, volume was lower on the Nasdaq so we will see if the action picks up again tomorrow. EXPE broke out of a flying 'w' pattern early this month, and tested back to the 10 day MVA by Friday, from where it popped up on strong volume that day. Good money flow, high relative strength. Target: 71
BUY POINT: A hold for positions taken at 62.60.
POSITION: Stock and/or July $55 calls to buy (UED GK).
http://www.investmenthouse.com/ct/expe.html
NATI (National Instruments--$41.95; -0.67; optionable): Computer Peripherals
http://biz.yahoo.com/p/n/nati.html
STATUS: Broke out of a double bottom with handle on Friday, but did not follow through Monday as volume fell back sharply below average (136,600; avg. 159,000). NATI did hold above the January closing high (41.85 at the start of the double bottom) on the low volume, so if it the support holds, the stock can move back up to continue the move. NATI fell to a low of 40.40 before rebounding to close with a loose doji, a good recovery intraday. Strong money flow. Target: 50
BUY POINT: 42.72 on continued rising volume. Stop Advisory (7%): 39.73.
POSITION: Stock and/or June $35 calls to buy (SJQ FG).
http://www.investmenthouse.com/ct/nati.html
Basing stocks:
GPC (Genuine Parts--$37.07; -0.03; optionable): Auto Parts Wholesale
http://biz.yahoo.com/p/g/gpc.html
STATUS: Still looks good as it pulls back in the handle to its 10-week cup with handle base. Volume fell even further below average to 141,400 (avg. 357,000) with GPC continuing to hold the 10 day MVA as support in the handle (36.90). Looking for the breakout and at a target at 45. Strong money flow.
BUY POINT: 37.71 on volume of 536,000 or higher. Stop Advisory (7%): 35.07
POSITION: Stock and/or May $30 calls to buy (GPC EF; low open interests).
http://www.investmenthouse.com/ct/gpc.html
FMKT (Freemarkets--$26.51; +1.12; optionable): Internet Software
http://biz.yahoo.com/p/f/fmkt.html
STATUS: Hit the buy point (26.22) for a breakout from the 8-week cup with handle, but as was the case with many stocks today, volume was lower (1 million; avg. 1.4 million), not on track for the breakout. FMKT cleared Friday's intraday high on the move, and closed just cents off its high, so is ready to go. Looking for renewed strength to continue the stock on the breakout. Excellent money flow, good buying. Target: 31
BUY POINT: A hold for positions, if taken, at 26.22. New positions from here: Over 26.60 on volume of 2 million or higher. Stop Advisory (7%): 24.83
POSITION: Stock and/or July $22.50 or $25 calls to buy ((FAQ GX or GE). Check for deltas.
http://www.investmenthouse.com/ct/fmkt.html
Moving average bounces:
BDK (Black & Decker--$46.48; -0.03; optionable): Small Tools
http://biz.yahoo.com/p/b/bkd.html
STATUS: Broke out of a year-long cup base in February and is testing the move on a pullback to the 18 day MVA (45.63). Volume fell again Monday (942,600; avg. 712,200) with the stock showing another small pullback and another tight doji. Continue to look for a bounce from here. High money flow. Target: 57
BUY POINT: Aggressive: 47.50 on volume of 1.3 million or higher. Stop Advisory (7%): 44.18
POSITION: Stock and/or May $40 calls to buy (BDK EH).
http://www.investmenthouse.com/ct/bdk.html
ADSK (Autodesk--$45.74; +1.74; optionable): Technical Software
http://biz.yahoo.com/p/a/adsk.html
STATUS: ADSK made the move we wanted, bouncing from the 10 day MVA Monday for the gain, but volume wasn't behind the move as it continued to fall, today below average to 800,900 (avg. 777,454). We were looking for another day or two of consolidation, but if volume can surge back in the stock looks ready to try for this month's high at 47.37. Support can emerge at the 45 range if it has to pull back (the stock fell off the intraday high at 46.40). Money flow and buying look good.
Target is 51.
BUY POINT: A hold for positions taken at 45.
POSITION: Stock and/or July $40 calls to buy (ADQ GH).
http://www.investmenthouse.com/ct/adsk.html
SYY (Sysco--$29.99; -0.02; optionable): Food Wholesale
http://biz.yahoo.com/p/s/syy.html
STATUS: In a 10-month cup base with ascending wedge handle, resistance at the 30 range. The pattern continues to tighten up nicely above support of the 18 day MVA (29.49), showing a tight doji as volume fell back Monday to 1.7 million; average is 2 million). Friday SYY moved up from the support on strong, above average volume and though it did not follow through today, that action did nothing to disturb the pattern. Strong money flow. Target: 37
BUY POINT: Breakout: 30.45 on continued strong volume. Stop Advisory (7%): 28.32
POSITION: Stock and/or May $27.50 calls to buy (SYY EY).
http://www.investmenthouse.com/cd/syy.html
Breakout
URS (Urs Corp--$33.98; +1.50; no options): Technical Services
http://biz.yahoo.com/p/u/urs.html
STATUS: URS followed through on Friday's strong move on the good earnings report; volume was strong that day but higher Monday at 375,300; avg. 97,000), pushing the stock again on the Friday bounce from the 18 day MVA. URS broke out of its ascending wedge at the end of February and tested the move back to the 18 day (31) on low volume. Strong money flow and buying. Our target is 38.50.
BUY POINT: A hold for positions taken at 32.55
POSITION: Stock.
http://www.investmenthouse.com/ct/urs.html
Puts:
CACI (Caci Intl--$37.45; +2.40; optionable): Technical Services
http://biz.yahoo.com/p/c/caci.html
STATUS: Well, CACI again refused to breakdown, reversing on good news that outweighed last week's bad news (a business deal and upgrade today versus the secondary offering last week). Volume was down from Friday's selling but strong (1.14 million; average 512,000), and we will have to see how it sets up to look at it again for a downside play.
http://www.investmenthouse.com/ct/caci.html
PLCM (Polycom--$27.15; +0.41; optionable): Telecom
http://biz.yahoo.com/p/p/plcm.html
STATUS: PLCM is in a downtrend since early December, and late last week again turned down from that resistance, with coincides with the 50 day MVA (29.60). After Friday's strong tumble PLCM tapped through the put buy point today (low of 26.20), but volume was not what we wanted (2.5 million; average 3.03 million) and the stock made a run at its 200 day MVA (28.40), pulling back from there to close. Still looking for a drop as the move up was weak and it could not hold. The downtrend is still in place, and we are targeting 21.50.
BUY POINT: For new or additional aggressive positions: Below 26.20 on increased volume. Watching 22.50 range for possible support on the way down.
POSITION: July $40 puts to buy (QHD SH).
http://www.investmenthouse.com/ct/plcm.html
NVDA (Nvidia--$58.29; +1.69; optionable): Semiconductor
http://biz.yahoo.com/p/n/nvda.html
STATUS: NVDA is having trouble holding a move over its 50 day MVA, today showing a low volume (6.76 million; average 9.4 million) doji below that resistance after failing to hold a move over it Friday. It is being pressured by that resistance and while it is posting some higher lows since late February, there is potential for a move down to the 50 range if it breaks below the 18 day MVA on another bout of selling similar to recent action (see late February on the chart). The 200 day MVA at 49 will likely support it on a fall, but that is plenty of room on the move. Today it hit the aggressive buy point before recovering to close, but still looks good for a fall.
BUY POINT: Below 56.70 on above average volume.
POSITION: June $75 puts to buy (RVU RO).
http://www.investmenthouse.com/ct/nvda.html
CONTINUED PLAYS:
Covered Calls: Still looking at COHU, which dipped back today but held on for a doji. ITT pushed back up but on lower volume.
CEY (Certegy--$41.10; +0.50; optionable): Software
http://biz.yahoo.com/p/c/cey.html
STATUS: Pushed up again, but this time the volume was much weaker at 128,800 (average 209,400) and it pulled off of the intraday high of 41.50. Monday's action reinforces that CEY is showing signs of dropping. CEY broke out of a flat base for a nice run, and now we are looking for a move back to test the 38 range (18 day MVA is at 37.96). If it holds support there, a move back up will be the cue to buy back the calls. Previous sell point was 39.75, but with the stock inching higher, we can do the same for with entry points.
SELL POINT: 40 on preferably rising volume.
POSITION: April $35 calls to sell (CEY DG).
http://www.investmenthouse.com/ct/cey.html
MOVING AVERAGE BOUNCE PLAYS: None this weekend.
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.
TUES (Tuesday Morning--$22.20; +0.55; no options): Retail
http://biz.yahoo.com/p/t/tues.html
STATUS: Testing the breakout it made from the cup with handle a week ago. The breakout wasn't a big one (though the initial move was very nice), but it has refused to give up much ground on the lower volume pullback. Today TUES traded in a wide range, tapping its 10 day MVA at its low of 20.70 and then hitting up to 22.87 before pulling back to close. Volume was up on the day, coming in at 168,500 (average 140,600). The move took TUES over the buy point, but the action suggests that we could need a bit more consolidation to settle down and set up a move. Excellent money flow and buying, and our target is 26.
BUY POINT: Still riding positions taken at 21.10 and 22.10. For new positions: We will see if it settles down on a test toward the 10 day MVA, and look at a move over 22.40 on volume of 200,000 or better. Stop Advisory (7%): 20.93.
POSITION: Stock.
http://www.investmenthouse.com/ct/tues.html
HET (Harrah's--$42.26; -0.04; optionable): Resorts, Casinos
http://biz.yahoo.com/p/h/het.html
STATUS: Testing the breakout from the 6-week cup with handle, still holding support at the 10 day MVA (41.66). After Friday's push up from there on big volume, today HET tapped back to support, closing with a doji on much lighter volume (557,400; average 811,500). Looking for the strong volume to break things higher from here. March high at 43.98 was posted on the breakout. Strong money flow. Target: 49
BUY POINT: For new positions (aggressive): 42.75 on continued strong volume. Stop Advisory (7%): 39.76
POSITION: Stock and/or May $37.50 calls to buy (HET EU).
http://www.investmenthouse.com/ct/het.html
SWK (Stanley Works--$49.11; -0.31; optionable): Tools
http://biz.yahoo.com/p/s/swk.html
STATUS: After the late February breakout from the 7-week cup with handle, SWK is testing the move by pulling back to the 18 day MVA (48.55). Monday it tapped back to that level, closing slightly down on lower volume of 358,900 (average 427,136). We are looking for that support to hold (the former cup with handle buy point was at 47.30). The light volume on the retreat is solid action, and if it can hold we are looking for the bounce back up. Continued strong buying. Target: 60
BUY POINT: 50.50 on volume of 575,000 or higher. Stop Advisory (7%): 46.97
POSITION: Stock and/or July $45 calls to buy (SWK GI).
http://www.investmenthouse.com/ct/swk.html
BASING/TRADING RANGES:
IPCR (Ipc Holdings--$29.62; -1.41; optionable): Insurance
http://biz.yahoo.com/p/i/ipcr.html
STATUS: Dropped out of the pattern. IPCR had been holding in a lateral pattern (flat base) as it tested its breakout from a 6-week saucer. However, Monday saw the stock drop through the recent support of the 18 day MVA (30.58) and tank back below the former saucer highs (30) to the 50 day (29.53), recovering to close from an intraday low of 28.78. Volume was up but still low at 172,200 (average 348,000), so we will see if IPCR can hold support here. The recent pattern high is 31.90. If IPCR can show that it can hold the 50 day, we will look for another solid bounce.
http://www.investmenthouse.com/ct/ipcr.html
SFD (Smithfield Foods--$24.14; -0.78; optionable): Food
http://biz.yahoo.com/p/s/sfd.html
STATUS: Dipped back out of the handle today. SFD was tightening in the handle of its 12-week cup with handle base (cup highs near 27), and was holding support over the 18 day MVA (24.72). Today SFD fell through that support, although volume continued low (up to 254,400; average 695,100) and it managed to hold its 50 day MVA (24.08) to close. We will see if the stock can hold and recover.
BUY POINT: The breakout is way out at 26.09. We will need to see if it holds before we can look at more aggressive upside positions.
POSITION: Stock and/or July $22.50 calls to buy (SFD GX).
http://www.investmenthouse.com/ct/sfd.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 picking
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