us stock market, stock recommendation

Begin part 3 of 3

THE PLAYS:

Upside: A few choice upside plays

Play Date: 09/17/2008
PEP (Pepsico--$71.68; -1.30; optionable): Beverages, foods, etc.
http://biz.yahoo.com/p/p/pep.html
EARNINGS:
STATUS: Reverse head and shoulders. PEP formed this bullish 7 month base at the bottom of a larger 9 month cup pattern. PEP broke higher to start September on strong volume fading back in this week's sellig to test near support at the 10 day EMA (71.56). Very solid action in a very weak market. PEP showing its stripes as leadership caliber in this market selling. Looking for it to hold the 10 day and bounce, giving us the buy point. A bit defensive and a bit early cycle at the same time, not bad for this market.
Volume: 13.397M Avg Volume: 7.183M
BUY POINT: $72.31 Volume=10M Target=$79.95 Stop=$71.31
POSITION: PEP AN - Jan. $70c (56 delta) &/or Stock
http://www.investmenthouse.com/ci/pep.html

Play Date: 09/17/2008
USO (United States Oil Fund ETF--$77.50; +2.51; optionable)
STATUS: Trend reversal/rebound. After the bludgeoning of oil it is ready for a bounce now that the dollar shows a bit of softening. Gapped lower Monday, the third gap down since the end of August. Three gaps is typically the limit before a rebound to start filling some of those downside gaps and with the weaker dollar it is ready to do so. Just a rebound play but it could be a sharp rebound.
Volume: 20.32M Avg Volume: 14.621M
BUY POINT: $77.72 Volume=20M Target=$87.00 Stop=$75.65
POSITION: UNA KZ - Nov. $78c (53 delta, low OI) &/or Stock
http://www.investmenthouse.com/ci/uso.html

Downside: Even after the selling some downside holdouts ready to sell off next.

Play Date: 09/17/2008
GDI (Gardner Denver--$37.84; -1.91; optionable): Machinery
http://biz.yahoo.com/p/g/gdi.html
EARNINGS: Third week of October
STATUS: Put. Looking at GDI again as it showed a spike in volume Wednesday as the stock turned back down following what looked to be a hold at the earlier September low. With this volume spike we are again looking to play GDI to the downside. A move to our initial target lands a 39%ish gain.
Volume: 867.458K Avg Volume: 727.395K
BUY POINT: $37.60 Volume=900K Target=$35.05 Stop=$39.05
POSITION: GDI VH - Oct. $40p (-65 delta)
http://www.investmenthouse.com/ci/gdi.html

Play Date: 09/17/2008
GTLS (Chart Industries--$34.35; -2.62; optionable): Metal fabrication
http://biz.yahoo.com/p/g/gtls.html
EARNINGS: Last week of October
STATUS: Put. Topped in July through August and then broke lower to start September, falling through the 200 day SMA (37.42) at the end of week 1. GTLS held after that breach, moving laterally, bumping that resistance for a week. Wednesday it turned sharply lower on rising, above average volume. Money flow is sharply lower. GTLS looks ready to fail this rebound test of the 200 day SMA and turn back downside. We will use that to enter. A move to the target lands a 55%ish gain.
Volume: 541.552K Avg Volume: 476.117K
BUY POINT: $34.21 Volume=550K Target=$30.05 Stop=$35.11
POSITION: QYK VG - Oct. $35c (-47 delta, low OI)
http://www.investmenthouse.com/ci/gtls.html

Play Date: 09/17/2008
IWM (Ishares Russell 2000--$67.80; -3.20; optionable)
STATUS: Head and shoulders. Doubling up on the small cap decline now that they have broke support (TWM is our other play). After a sharp recovery Tuesday the small caps rolled over Wednesday and broke the support that had been holding up. The small caps still have plenty of downside room before testing the prior lows, and given the breakdown they will likely make the test similar to the other indices. May be volatile and bounce up and down but on a further move lower we will start the position. A move to the target lands at 35%ish gain.
Volume: 266.078M Avg Volume: 114.678M
BUY POINT: $67.58 Volume=175M Target=$65.04 Stop=$68.21
POSITION: DIW VP - Oct. $68p (-42 delta)
http://www.investmenthouse.com/ci/iwm.html

Good Investing!
Jon L. Johnson and The Daily Staff

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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