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Begin part 3 of 3

THE PLAYS:

Upside: Some still strong stocks in position to move higher with good bases behind them.

Play Date: 09/08/2008
BBY (Best Buy--$46.93; +2.01; optionable): Electronics stores
http://biz.yahoo.com/p/b/bby.html
EARNINGS: 9-16-08
STATUS: Reverse head and shoulders. Earnings are coming but we like how BBY has set up to meet them with this 13 week reverse head and shoulders base that is part of a larger 9 month double bottom with handle. Volume was strong in early to mid-August as BBY rallied sharply, then it dropped off in late August as the market and BBY worked laterally. Then trade started to jump this month as BBY continued working on its pattern, unlike the market (unless a straight dive lower is a pattern). It held the 18 day EMA and 200 day SMA and gapped higher Monday on the best volume in three weeks. Very solid and the retailers are in general a solid lot. Looking for BBY to continue on and breakout and give us the buy point. Will look to take some positions as it makes that move and then on a successful test we will look to add to the position.
Volume: 9.333M Avg Volume: 6.973M
BUY POINT: $47.38 Volume=9.5M Target=$53.95 Stop=$44.64
POSITION: BBY LI - Dec. $45c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/bby.html

Play Date: 09/08/2008
TSO (Tesoro Petroleum--$19.55; +0.89; optionable): Oil and gas refining
http://biz.yahoo.com/p/t/tso.html
EARNINGS: Announced 7-30-08
STATUS: Trend reversal. After a nasty downtrend that started right after TSO gapped higher in late October 2007 on its earnings, the conditions are finally getting right for the refiners to make some money again. It was an ugly 9 month downtrend, but the past 4 weeks it has bottomed, edged higher up to and through the 50 day EMA (18.46), working laterally the past week along that key level. Monday it gapped higher on solid volume. After the long selloff all of the selling was done and last week's gyrations did not phase it. As it bottomed in mid-July to early August money flow started flowing higher. It has really ramped up and continues to rise even as TSO moved laterally the past four weeks. That is a positive divergence to price, and that tells us that TSO is getting ready to break higher. Lots of room overhead, and TSO is a buy as it continues the Monday break higher. Our initial target may be way too light on this one and it could get much closer to 30 on its first run.
Volume: 10.097M Avg Volume: 9.23M
BUY POINT: $19.68 Volume=9.6M Target=$23.95 Stop=$18.31
POSITION: TSO AW - Jan. $17.50c (69 delta) &/or Stock
http://www.investmenthouse.com/ci/tso.html

New buy point on current position:

Play Date: 09/08/2008
BRKR (Bruker Corp.--$16.79; +0.79; optionable): Scientific & technical instruments
http://biz.yahoo.com/p/b/brkr.html
EARNINGS: Announced 7-31-08
STATUS: Test breakout. Delivered a strong breakout to end August, and it continued on into September with a quick test of the 10 day EMA (15.95) to end last week in the market selling. Low volume on that trip lower. Gapped higher off that near support Monday on continued above average volume. Ready to add to the position as BRKR continues the breakout run. Recap: BRKR formed a solid 21 week cup with handle base starting late March as it leads the market after a long base from late 2002 through 2006. Second major base from this recovery and as BRKR continues we are ready to move in with more positions.
Volume: 731.442K Avg Volume: 619.788K
BUY POINT: $16.98 Volume=750K Target=$20.42 Stop=$15.85
POSITION: TQB KC - Nov. $15c (73 delta) &/or Stock
http://www.investmenthouse.com/ci/brkr.html

Downside:

Play Date: 09/08/2008
DXD (ProShares DJ30 UltraShort ETF--$61.06; -3.04; optionable)
http://biz.yahoo.com/p/d/dxd.html
STATUS: This is the mirror of DJ30: it goes up as DJ30 goes down and vice versa. DXD gapped lower on the big news Monday, but DJ30 did not make it through its 50 day EMA. Now DJ30 may have some more upside here, but as noted in the Summary, the market used up a lot of upside ammunition on this news driven session. We are going to be watching and waiting to see if DJ30 caps out on this bounce, and when it does we are ready to move in. As it is at its 50 day EMA, this is a good place to be ready. A move to the initial target lands a 57%ish gain.
Volume: 11.297M Avg Volume: 7.877M
BUY POINT: $62.05 Volume=9M Target=$66.24 Stop=$60.97
POSITION: DXD JII - Oct. $61c (55 delta)
http://www.investmenthouse.com/ci/dxd.html

Play Date: 09/08/2008
SDS (UltraShort S&P500 ETF--$66.66; -3.00; optionable)
http://biz.yahoo.com/p/s/sds.html
STATUS: SDS made us some money already, and this gap lower on the Treasury/FNM/FRE takeover has us looking at it again in the event, as with DJ30, it used up its ammunition on the news-filled orgy. SP500 hit the 50 day SMA and stopped. It may have some more upside on up to its 50 day EMA (1284), but with this drop we want to be ready to move in if there is an abrupt change as that could take it below the July low. A move to the initial target lands a 52%ish gain.
Volume: 36.455M Avg Volume: 25.373M
BUY POINT: $67.02 Volume=30M Target=$71.24 Stop=$65.28
POSITION: SDS JN - Oct. $66c (56 delta)
http://www.investmenthouse.com/ci/sds.html

Good Investing!
Jon L. Johnson and your IH Alerts 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. Good Investing!

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