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world stock market, stock recommendation
Begin Part 3 of 3
Test of the breakout:
MOLX (Molex--$35.76; +0.42; optionable): Electronics
http://biz.yahoo.com/p/m/molx.html
STATUS: Deep in a long base, but MOLX finally got back over its 200 day MVA early this month, the first time since the fall of 2000. After a stellar run on that break of resistance, the stock tested its 10 day MVA and Friday looked ready to make another good move (bounce) as volume shot above average. Monday, however, that volume was back down, well below average to 463,300 (avg. 676,000). MOLX shot up early, tested lower, then actually closed near the high (35.80), so if it can get volume, the stock is ready. Target: 40. The 50 day MVA is crossing over the 200 day MVA, a bullish trend.
BUY POINT: A hold for buys at 35.50. Stop Advisory (7%): 33.02
POSITION: Stock and/or May $30 calls to buy (OXQ EF).
http://www.investmenthouse.com/ct/molx.html
Moving average bounces:
VSEA (Varian Semi--$42.38; +0.89; optionable): Chip Equipment
http://biz.yahoo.com/p/v/vsea.html
STATUS: VSEA is in a 2-year base but off the lows that are around 20. The stock used the 200 day MVA for the recent run that took it up to 45.17, the March closing high. Friday on stronger, average volume the stock bounced from the 18 day MVA (40.45) after the test back to the support; it continued the move Monday, but volume was lower (355,200; avg. 500,000). VSEA pulled off the high of 43.17 but is holding above the January high (42.12) and the 10 day MVA (41.48), so will look for a continued bounce as that support maintains. Target: 50
BUY POINT: A hold for aggressive buys at 42.25. On stronger volume (over 500,000), new buy point is over 43.17.
POSITION: Stock and/or May (UES EG) or August (UES HG) $35 calls to buy.
http://www.investmenthouse.com/ct/vsea.html
Basing stocks:
WABC (Westamerica--$43.50; +0.08; no options): Regional Banks
http://biz.yahoo.com/p/w/wabc.html
STATUS: Formed a handle to a 14.5-month double bottom and bounded up from the 18 day MVA on Friday in a breakout move. Buy point was 43.65, which the stock tapped on the intraday high as volume remained strong though quite a bit off from Friday's levels (Monday at 153,000; avg. 126,300). It was the same thing for many of our stocks today; WABC is ready to move but is waiting to Greenspan to do his thing first. Still a buy if the action picks up. Excellent money flow and good buying. Target: 52
BUY POINT: A hold for positions taken at 43.65. Stop Advisory (7%): 40.59. New buy point: 43.80 on rising volume. Stop Advisory (7%): 40.73. Remains a buy on the breakout up to 45.83.
POSITION: Stock.
http://www.investmenthouse.com/ct/wabc.html
PL (Protective Life--$31.95; -0.37; optionable): Insurance
http://biz.yahoo.com/p/p/pl.html
STATUS: Moved up in the handle of its 8.5-month cup with handle base on Friday, good volume backing it, but with volume lower Monday (276,200; avg. 215,181) PL again tested the 18 day MVA. It did the same four days ago just prior to making the 2-day bounce up in the handle. Monday the stock bounced again, closing with a doji above the 10 day MVA for the slight loss; just a breather in the action before the market picks up again after today's light day. Continue to look for a breakout. High money flow. Target: 39
BUY POINT: Breakout: 32.49 on continued strong volume (min. breakout volume met at 323,000). Stop Advisory (7%): 30.22
POSITION: Stock and/or July $25 calls to buy (PL GE).
http://www.investmenthouse.com/ct/pl.html
GCI (Gannett--$77.20; +0.51; optionable): Publishing
http://biz.yahoo.com/p/g/gci.html
STATUS: Moved up in the flying plateau, though volume was much lower (below the average of 911,363 to 921,000). The stock managed to hit the buy point but that was as far as it got, the tepid market pulling it back down. The move looked good early when it moved through the buy point, so for positions taken at 7.20 the stock is a hold. Money flow remains strong; target 93.
BUY POINT: New: 77.30 on volume of 1.2 million or higher. Stop Advisory (7%): 71.89
POSITION: Stock and/or July $70 calls to buy (GCI GN).
http://www.investmenthouse.com/ct/gci.html
Puts:
DRI (Darden--$39.45; +0.46; optionable): Restaurants
http://biz.yahoo.com/p/d/dri.html
STATUS: After moving back up to resistance on decreasing volume after some recent heavy selling, DRI managed to break through the 50 day MVA (39.37) on higher volume, 1.27 million (avg. 912,000). It is showing a hanging man doji, which at the top of a run can mean a move back down. We will have to see that move, and are keeping the 38.50 buy point for the play. Target is 32 at the 200 day MVA.
BUY POINT: Aggressive: 38.50 on preferably rising volume.
POSITION: July $45 puts to buy (check for deltas; unavailable due to options expiration Friday). DRI SI
http://www.investmenthouse.com/ct/dri.html
EMBT (Embarcadero Tech--$15.03; +0.10; optionable): Software
http://biz.yahoo.com/p/e/embt.html
STATUS: The stock is in a 4.5-month head and shoulders pattern and looking ready to break down. The stock peaked in the right shoulder at the 50 day MVA (17.14) but has been selling more heavily since it broke the 18 day MVA last week. EMBT held with a tight doji Monday as volume fell back (309,400; avg. 268,000). Looking for a breakdown below 14; target is 10.
BUY POINT: 13.95 (the stock hit 14.05 four times) on rising volume.
POSITION: May $20 puts to buy (MBQ QD).
http://www.investmenthouse.com/ct/embt.html
CONTINUED PLAYS:
Puts:
MU (Micron Tech--$33.25; -0.14; optionable): Semiconductor
http://biz.yahoo.com/p/m/mu.html
STATUS: MU was back over the 200 day MVA Friday but remained a hold for put positions taken at 32.50. Monday the stock tried to hold a move over the 50 day MVA (34.34) but closed back down, still above the 200 day MVA as volume fell back to average (8.7 million; avg. 7.56 million). We will see if it breaks the 200 day MVA; the stock double-topped in February and March, and hasn't broken down severely; we are looking for that move, but the expectations on the book to bill may continue to help it out and hurt our position. Target: 27.50.
BUY POINT: A hold for put buys at 32.50.
POSITION: July $45 puts to buy (MU SI).
http://www.investmenthouse.com/ct/mu.html
BASING/TRADING RANGES:
SXT (Sensient Tech--$22.43; +0.58; optionable): Food
http://biz.yahoo.com/p/s/sxt.html
STATUS: Made the breakout, but not with the strength of volume we wanted. SXT has been in a handle to its 7-month cup with handle, but volume was at 155,100 (average 200,000) as the stock surged to breakout. It is now facing the left-side high (September at 22.65), so a buy on a continued move over that level if we can get the volume. Continued excellent money flow and good buying. Target: 27
BUY POINT: From here: 22.75 on volume of 300,000 or higher. Stop Advisory (7%): 21.16. A buy to 23.26 on this breakout (a hold for buys at 22.15), and with all breakouts in this market, do not chase it too far.
POSITION: Stock and/or July $20 calls to buy (SXT GD).
http://www.investmenthouse.com/ct/sxt.html
SHW (Sherwin-Williams--$28.96; -0.03; optionable): Building Materials
http://biz.yahoo.com/p/s/shw.html
STATUS: Tested the breakout from the 2-month reverse head and shoulders (that was in a 3.5-month flat base), and is trying to make it back up to the breakout high (29.47). Not a stellar move on the breakout, but stocks can often make that up after testing the breakout. However, it is having a bit of trouble making a strong move, as volume continued to be low today (661,100; average 697,500) as SHW pulled back from an intraday high near 28.20 for the second consecutive session (Monday 29.19). We will see if it can generate some strength. Money flow and buying look good. Target: 34
BUY POINT: A hold for buys at 28.75. New buy point is 29.50 on volume in the range of 950,000. Stop Advisory (7%): 27.44
POSITION: Stock and/or June $25 calls to buy (SHW FE).
http://www.investmenthouse.com/ct/shw.html
IBM ($106.35; -0.44; optionable): Computer Hardware
http://biz.yahoo.com/p/i/ibm.html
STATUS: Formed a reverse head and shoulders pattern, and is holding support at the 18 day MVA (105.11) but is under resistance, the 50 day MVA (107.31). We are looking for a breakout from the pattern over the 200 day MVA at 108.85. Today IBM made a run at that level, but the high was 108.64 and volume was weak at 5.3 million (average 7.8 million), so it pulled back to close. IBM has shown some solid price volume action in the right side of the pattern, so we continue to look for the big move. Our target is 115 for options positions, preferred for quicker moves up to resistance.
BUY POINT: 109.10 on volume in the range of 8 million or higher. Stop Advisory (7%): 101.46
POSITION: Stock and/or July $100 calls to buy (IBM GT).
http://www.investmenthouse.com/ct/ibm.html
GPC (Genuine Parts--$37.51; +0.19; optionable): Auto Parts Wholesale
http://biz.yahoo.com/p/g/gpc.html
STATUS: Moved up in the handle to its 11-week cup with handle base. GPC gapped down but pushed back up to close near the handle high (37.61; all-time high from the left side of the pattern is 37.94), tapping at it intraday, but volume was lighter at 332,400 (average 337,200). Looking for the breakout, but we need the breakout volume. Strong money flow; target is 45.
BUY POINT: 37.71 on volume of 506,000 or higher. Stop Advisory (7%): 35.07
POSITION: Stock and/or May or August $30 calls to buy (GPC EF or HF; low open interests).
http://www.investmenthouse.com/ct/gpc.html
NATI (National Instruments--$41.61; -0.09; optionable): Computer Peripherals
http://biz.yahoo.com/p/n/nati.html
STATUS: NATI pulled back into a new handle to its 9-week double bottom base. It is holding the 10 day MVA (40.85), showing a doji today as volume dipped back down (102,400; average 153,200). Good action in the pattern up to here, and we are looking for stronger volume to break the stock out of the pattern. Excellent money flow. Target is 50.
BUY POINT: 42.72 on volume in the range of 270,000. Stop Advisory (7%): 39.73.
POSITION: Stock and/or June $35 calls to buy (SJQ FG).
http://www.investmenthouse.com/ct/nati.html
SLVN (Sylvan Learning--$25.83; +0.23; optionable): Education & Training
http://biz.yahoo.com/p/s/slvn.html
STATUS: Not much change. SLVN is holding at the 18 day MVA (25.52) in the handle to the 7-month cup base. Volume continued to be very light in the consolidation (183,700 today; average 443,400) as SLVN showed a looser doji. Nice handle, and ready to see an upside move from here. 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
SLAB (Silicon Laboratories--$35.01; +0.01; optionable): Semiconductor
http://biz.yahoo.com/p/s/slab.html
STATUS: Still looks good in the handle to its 10-week cup base. The stock is holding at the 10 day MVA (33.99) on light volume (355,700; average 680,800), today showing a loose doji. Looks ready once volume surges in; a possibility on a good book to bill number. Great money flow and good buying. Target: 45
BUY POINT: Breakout: 37.29 on volume of 1 million or higher. Stop Advisory (7%): 34.68
POSITION: Stock and/or July $35 calls to buy (QFJ GG). Check for deltas.
http://www.investmenthouse.com/ct/slab.html
WWW (Wolverine World Wide--$17.96; +0.29; optionable): Apparel Footwear
http://biz.yahoo.com/p/w/www.html
STATUS: After the strong push Friday in the handle, WWW continued up today, but volume was sharply down and below average (114,400; average 140,000). Now just under the breakout buy point for the 6.5-month cup with handle, so we will see if it can muster more strength. Good buying, strong money flow. Target: 22
BUY POINT: 18.10 on volume of 230,000 or higher. Stop Advisory (7%): 16.83
POSITION: Stock and/or June $15 calls to buy (WWW FC).
http://www.investmenthouse.com/ct/www.html
QLGC (Qlogic--$46.72; -1.46; optionable): Semiconductor
http://biz.yahoo.com/p/q/qlgc.html
STATUS: Was making a nice pullback, but today fell back through its early-March high (48) and 10 day MVA, which had been providing support at 47.58, and QLGC closed just below the 50 day (46.80). Volume had been under control on the recent dip, however it picked up considerably today, coming in at 11.64 million (average 10 million). The storage sector was under pressure today with BRCD getting pounded. We were looking for a bounce with a target of 56, but now will first have to see if it can hold here.
BUY POINT: Aggressive: After showing it can hold the 50 day, in a strong Nasdaq a move back over 48.20 on continued strong volume. Stop Advisory (7%): 44.92
POSITION: Stock and/or July $45 calls to buy (QLC GI).
http://www.investmenthouse.com/ct/qlgc.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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world stock market
stock recommendation
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