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Begin Part 2 of 2

THE PLAYS:

Reading the Plays: Please note that when we reference the 10, 18, and 50 day moving averages (MVA), those are exponential moving averages (EMA). The 200 day moving average is always simple (SMA). We will note when we reference a particular MVA differently, e.g., a simple 50 day MVA. Please click on the Yahoo and chart links for company and charting information. A "prior high" refers to the high at the start of a base.
For conserving space on listings of stop losses, the symbol (7%) indicates that the stop is 7% below the buy point.

Stocks from Monday's report:
RMHT: Made the aggressive buy point but stopped short of the breakout. Closed well off of its high, so need to see the breakout for any further positions.
ASBC: Up just a bit, short of the buy point on rising volume. Again, may form more of a handle here.
HUM: Good doji on the 10 day MVA. May be ready to make the breakout once all of the tech excitement dies down.
PKG: Holding up very well for the breakout.
AGAM: Nice doji on higher volume right on the 10 day MVA. Keeping a close eye on it.

Continued Plays:
STSA: Repeat: Still looks great in its ascending wedge.
CRFT: Took a breather on lower volume.
PRU: That is better. Held at the 18 day MVA and bounced on solid, above average volume (first such volume in over a week). Preparing for the breakout.
PMSI: Exploding out of the handle after a quick shakeout last week. Huge breakout.
CHPC: Breaking out today on huge volume.
MYK: Breakout! Big move on above average volume!
CCRN: Moved a bit higher in the handle on continued below average volume. Needs to jump higher volume-wise.
RMCI: Massive, massive tank. Broke out Monday and then reversed on massive volume today. Run, don't walk, from this one.
PEGS: Doji on higher volume after Monday's breakout. Took a back seat to technology today.
SPF: Still in the handle, rising today on lower, below average volume. Getting ready for the breakout.
OMX: So far, no stopping it. Rallying higher on even stronger volume.
HARB: Tight doji on rising, above average volume. Not at the target, and this move has run out of steam. Ballistic move that looks as if it will peel back a bit. 10 day MVA is at 20.75 and that may be where it lands. Selling here is roughly 10% gain. Willing to let it test.
SNS: Handle is looking better; rose slightly on rising volume.
HKF: It is picking up the pace, rising on above average volume. That is better.
GBBK: Might be ending the pullback here. A hammer doji on rising, above average volume, closing right on the 10 day MVA. Classic bounce action.
CHGO: Hammer doji on even lower volume. It would be great if this was the extent of the pullback, but it usually manages about 75 cents to $1.

Best Plays: They all look good.
1) KEY: Solid, solid cup with handle.
2) STKL: Breaking out.
3) ASX: Really like the combination pattern.
4) SNIC: Making a strong move toward a breakout.

New plays:

KEY (Keycorp--$27.36; +0.86; optionable): Bank
http://biz.yahoo.com/p/k/key.html
STATUS: 9-month cup with handle. Key is in the process of breaking out of this base on a very solid, above average volume day (1.89 million; avg. is 1.15 million). Relative strength is excellent, but the really impressive action in the base is the price/volume action with up weeks on rising volume vastly outnumbering down weeks on up volume (8 to 3). Today's breakout action on strong volume is super, and we want to get in on the action as the bigger banks start to follow the regional banks.
BUY POINT: 27.36 would be the buy point before today's action. We are setting it at 27.55 on continued strong volume. Target= 33. Stop=25.75.
POSITION: Stock and/or September 25c (KEY IE) or 22.50c (KEY IX) to buy.

http://www.investmenthouse.com/cd/key.html

STKL (Stake Technology--$3.09; +0.28; no options): Machinery manufacturing
http://biz.yahoo.com/p/s/stkl.html
STATUS: Breaking out to a new high on massive volume today (354,600; avg. is 55K). The pattern is a 2-month cup that did not form a handle as the stock shot up to $3, well over the cup high at 2.40. It pulled back to test the breakout, dropping to 2.50. It shot higher today on that big volume. Buying is excellent, money flow is huge, and relative strength broke out as well. It closed 10 cents off of its high; we are looking to pick it up at this level or a quick test toward 3.05.
BUY POINT: Preferably after a quick test of 3.05, but we will buy it on up to 3.25. Target=4.50. Stop=2.95.
POSITION: Stock.

http://www.investmenthouse.com/cd/stkl.html

Revisited: There are several current plays in addition to those in the quick reviews above that look great. We are going to run through a few quickly to get you primed for them once again.

ASX (Advanced Semiconductor--$5.25; +0.23; no options): Chip equipment
http://biz.yahoo.com/p/a/asx.html
STATUS: Coming out of its first correction. A cup with handle breakout and now an ascending wedge over the past 5 weeks. Today the TXN and NVLS news moved it higher on big volume (459,900; avg. is 130K).
BUY POINT: 5.53 on volume of 250K or better. Target=7.50. Stop=5.12.
POSITION: Stock.

http://www.investmenthouse.com/cd/asx.html

COCO (Corinthian Colleges--$52.41; +0.16; optionable): Education and training
http://biz.yahoo.com/p/c/coco.html
STATUS: In a steady uptrend that was upset by the 9-11 attacks. It resumed the uptrend, rising steadily up its 18 day MVA (51) with periodic tests to the 50 day MVA. It has pulled back the past three sessions to the 10 day MVA on very low volume (122,300; avg. is 320K). Money flow is very good. We are looking for a bounce off of this level to resume the assent.
BUY POINT: 52.75 on above average volume (320K+). Breakout: 55.10 on volume of 470K+. Target=66.06. Stop=51.24.
POSITION: Stock and/or August 45c to buy (UCS HI).

http://www.investmenthouse.com/cd/coco.html

SNIC (Sonic Solutions--$8.10; +0.94; no options): Business software
http://biz.yahoo.com/p/s/snic.html
STATUS: You can look at this several different ways, but whether an ascending wedge, reverse head and shoulders, or cup with handle, SNIC is making a strong move on strong volume (288,600; avg. is 176K). Today's move almost broke the stock out of the pattern. Buying is still solid and money flow has been strong the entire year. We are looking for the breakout to follow relative strength which already broke out.
BUY POINT: 8.30 on volume of 300K+. Target=10.25. Stop=7.20.
POSITION: Stock.

http://www.investmenthouse.com/cd/snic.html

PORTFOLIOS: Each report, we look at these to see which is in a buy position. We don't cover them all each time, just the ones that look ready to pick up a few shares.

THE LEADERS: DGX, FRX, LLL, MIK. New: ICUI; RMCI

DGX (84.80; -0.90): Low volume pullback to the 10 day MVA on the close (486,900). DGX uses both the 10 and 18 day MVA (83) as support. A nice and orderly pullback, and we will look for it to move off of either level.

RMCI (25.02; -2.73): Gapped higher but then reversed on massive volume (1.0 million; avg. is 298K). No news that we saw to explain the drop. RMCI changed from Andersen and accordingly was going to report earnings later (April 22). Unexplained selling is tricky. Before earnings it can mean that the accountants brought the books to management. We won't let new buys fall below 24.

UP & COMERS PORTFOLIOS: BBBY, SRCL

BBBY (35.50; +0.91): Held the 10 day MVA Monday with a tight doji, and today bounced higher on rising, average volume (3.48 million). The 4.5 month flat base could be ending. We will add to positions on a move over 36.18 on volume of 5 million.

MEMBER PORTFOLIO: CSCO, SEBL, EMLX, BRCM, HDI, BRCD, BUD, AMGN, WMT, ORCL, HB, NOC

HDI (54.38; +0.70): Reported excellent earnings after the close and that it was upping production. It was trading higher. Maybe this is the move that breaks it out of this 4-month trading range between 50 and 55. On a move over 55 on 2.25 million or more it is an add-to.

BUD ($51.76; +0.06): Having some trouble at the 18 day MVA (51.85). After breaking out in January, it has held above the 18 day MVA without fail. Today it edged below that level on the close, falling to 51.52 on the low. Volume moved above average on the move (2.94 million). It could be BUD's time to test the 50 day MVA after 3.5 bounces off the 18 day. The 50 day MVA is at 50.15. We could look at selling some April or May $50 covered calls on our positions to take advantage of the move lower, buying them back if the 50 day MVA holds and breaks the fall.

BRCM: Enjoyed the TXN and NVLS news, racing up to the 200 day MVA on the close as volume moved to just above average (14.89 million). It could be said to be forming a double bottom after the double top in November and January. A long way to go still, with the breakout point at 45. Could provide quite a trade up to that point for the aggressive.

EMLX, BRCD: Moved up to the 200 day MVA on below average volume.

BUD (51.70; -0.79): Falling through the 18 day MVA on rising though still below average volume (1.91 million). After four bounces up the 18 day MVA, BUD looks ready to test the 50 day MVA at 50.05. Stocks tend to run up the 18 day MVA 4 times after a breakout, and then need to test the 50 day MVA. We can sell some May $50 calls here on the pullback, buying them back when the stock hits the 50 day MVA and bounces.

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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