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Begin Part 2 of 2

Best Plays Part 2:
1) NEU: Moving up in the pennant but needs volume.
2) CFBX: At resistance in the pattern, on a strong rise in volume.
3) CSBI: Continues a really tight pattern on low volume.
4) NMTC: Still in a tight handle.
5) ADSK: Ready to move in a rally.
6) MFLO: Breakout! And still a buy.

New Play (from the weekend):

ACS (Affiliated Computer Svc--$64.00; -1.02; optionable (ACS)): Software
http://biz.yahoo.com/p/a/acs.html
STATUS: Pulled back after Tuesday's all-time closing high of 65.02 above possible support at 63.85 (hit twice the previous two sessions). Volume was stronger at 473,300 (avg. 302,181) as the stock tested the breakout point of 62.76 on the low of 63.14. The stock can pull back to the breakout point, but we'd like it to stay above that on the test. Great money flow and high relative strength.
BUY POINT: On a move back up from 62.76 on continued rising volume.
POSITION: Stock and/or April $60 calls to buy (ACS DL).

Continued Plays:

ASD (American Standard--$51.61; +0.16; optionable (ASD)): Material and construction
http://biz.yahoo.com/p/a/asd.html
STATUS: Having trouble getting out of the recent consolidation as the stock tests the breakout from the recent base. Volume rose as we wanted Wednesday, but the stock pulled back from the high of 52.76. Lots of stocks did that, so we will see how ASD holds up for a market rally. Money flow still high.
BUY POINT: Aggressive: On a move over 53.69 (breakout high) on above average volume.
POSITION: Aggressive: Stock and/or April $50 calls to buy (ASD DJ).

SUB (Summit Bancorp--$43.75; -0.52; optionable (SUB)): Regional banks
http://biz.yahoo.com/p/s/sub.html
STATUS: Tightening up as the stock inches up support (10 day MVA, 43.13) on steadily rising volume (reaching 1.1 million Wednesday; avg. 524,000). The stock opened at Tuesday's closing price (44.26) and moved down from there on the stronger volume. Can move down to the moving average before heading back up in a financials rally.
High money flow and relative strength.
BUY POINT: Over 44.61 (intraday high) on continued rising volume.
POSITION: Stock and/or April $40 calls to buy (SUB DH).

WEDGES, PENNANTS, and FLYING PLATEAUS (AND FLAGS): These are some of our favorite patterns as the moves can be explosive. In this market, however, we need to see the move on the breakout on strong volume.

Wedges:

Continued Plays:

AMAT (Applied Materials Inc--$50.19; +2.13; optionable (ANQ)): Semiconductor
http://biz.yahoo.com/p/a/amat.html
STATUS: Pulled back on high volume after the company warned Tuesady for its first quarter (33.8 million; avg. 19 million). The stock hit a high of 53.94 on a breakout move that day but the news ended that. We will look for a move back over that high, but AMAT can pull back to the 10 day MVA (49.28) first, showing a doji at the bottom of its trading range.
BUY POINT: Over 53.94, on continued strong volume.
POSITION: Stock and/or April $50 calls to buy (ANQ DJ

Pennant:

Back on the report:

SWBT (Southwest Bancorp of Tx--$42.81; -1.19; optionable (ZRQ)): Regional banks
http://biz.yahoo.com/p/s/swbt.html
STATUS: Pulled back to support (18 day MVA, 42.68) after opening higher (44.63). Volume rose to 209,000 (avg. 243,000). Looking for support to hold the stock for a bounce back as the financials rally. The pennant's high is 45.63.
BUY POINT: Aggressive: Up from here on continued rising volume. Breakout: 45.76, on volume of 328,000 or better.
POSITION: Aggressive: Stock and/or May $40 calls to buy (ZRQ EH). Breakout: Stock and/or May $45 calls to buy (ZRQ EI).

Pennants (continued):

New Play (from Monday):

FAF (First American Corp--$29.55; -1.24; optionable (FAF)): Insurance
Back on the report:
http://biz.yahoo.com/p/f/faf.html
STATUS: Dropped below the 18 day MVA (30.48) but is holding above an up trendline (connecting October and December lows) as volume dropped lower below average (243,500; avg. 310,000). The stock needs to bounce back over the moving average from here. Money flow is still high, and buying is looking quite good.
BUY POINT: Aggressive: On a bounce back up from the trendline on stronger volume. Breakout: 33.01, on volume of 419,000 or better. Remains a buy on the breakout up to 34.66.
POSITION: Aggressive: Stock. April $25 options have only 32 open interests (FAF DE). Breakout: Stock and/or April $30 calls to buy (FAF DF).

New Play (from the weekend):

NEU (Neuberger Berman Inc--$79.75; +1.11; optionable (NEU)): Financial services
http://biz.yahoo.com/p/n/neu.html
STATUS: Made a move up from the tail of the pennant where prices are squeezed down about as far as they could. Volume was lower (110,200; avg. 272,272), so we want to see that pick up to keep the stock moving toward a breakout. Pattern high is 85.69. Money flow and relative strength remain high, and buying is improving. Looks good.
BUY POINT: Aggressive: Up from here on rising volume. Breakout: 85.82, on volume of 368,000 or better.
POSITION: Aggressive: Stock. April $75 options have no open interests. Breakout: Stock and/or April $85 calls to buy (NEU DO; please note that this option still has only 10 open interests).

CFBX (Community First Bankshrs--$19.44; +0.39; optionable (QSJ)): Regional Banks: Pacific
http://biz.yahoo.com/p/c/cfbx.html
STATUS: Finally moving up in the pennant on decent volume (186,400; avg. 145,000). The stock tried this move Monday but sold back to the 18 day MVA (18.98) the next session, from where it moved up today. The high tapped 19.50, upper resistance in the pattern. Looking for a breakout over that price on stronger volume. Great money flow and positive buying. The stock is in a lengthy base (prior basing high of 20.88).
BUY POINT: 19.63, on volume of 196,000 or better. A buy on the breakout up to 20.61.
POSITION: Stock and/or May $17.50 calls to buy (QSJ EW).

EDS (Electronic Data Systems--$55.65; +0.13; optionable (EDS)): Software
http://biz.yahoo.com/p/e/eds.html
STATUS: Closed at the same level the last three sessions as volume remains below average (1.67 million; avg. 2.1 million), slightly down Wednesday. Looks like good support (the lows have tested at or on the 50 day MVA at 54.69 as well). Ready to move up in a rally. High money flow and positive buying.
BUY POINT: Aggressive: On a move up here, on rising volume. Breakout: 60.13, on volume of 2.7 million or better.
POSITION: Aggressive: Stock and/or March or June $55 calls to buy (EDS CK or EK). Breakout: Stock and/or March or June $60 calls to buy (EDS CL or FL).

Continued Plays:

AREM (Aremissoft Corporation--$23.00; -2.38; optionable (UKM)): Application software
http://biz.yahoo.com/p/a/arem.html
STATUS: Fell out of its pennant pattern today, also dropping back below its recent lows and the upper reaches of its November-December rolling range, at 24 (as well as recent support of its 18 day MVA, at 24.84. . The stock closed just above its 50 day MVA (22.89), and volume was not that strong, coming in lower at 393,400 (average 504,200). We will see if it holds for a move back up. Pattern high is 28.25.
BUY POINT: Aggressive Over the 18 day in a rally, on increased volume.
POSITION: Stock and/or April $20 calls to buy (UKM DD).

CSBI (Century South Banks Inc--$33.34; -0.22; no options):
http://biz.yahoo.com/p/c/csbi.html
STATUS: Is again tightening up with support at its 18 day MVA (33.24), showing another doji with low volume (26,700; average 82,000) in its pennant. Still looking for a breakout over the pattern high (34.72) as the financials may be in for some good moves. Great buying and strong money flow.
BUY POINT: Breakout: 34.85, on volume of 110,000 or better. Remains a buy up to 36.59.
POSITION: Stock.

BASING/TRADING RANGES: There are many stocks, particularly financial stocks, forming solid patterns to break out of. Because of the number, write-ups are as brief as possible. We may see these stocks start to move up prior to the FOMC meeting, but we want to see them move on strong volume when they do breakout.

Back on the report:

NUAN (Numerical Technologies--$37.56; -4.32; optionable (NUD)): Software
http://biz.yahoo.com/p/n/nuan.html
STATUS: Has really dropped off after showing strength recently with a move over its 50 day MVA (52.19) last week. The stock dropped back Tuesday through what had been strong support in its 18 day MVA (44.46), and today it continued down on huge volume of 3.73 million (average 1.6 million). Does not look good at the moment, and we will have to see a move back over the 18 day for aggressive positions.
BUY POINT: None for now. Aggressive: On a move back over its 18 day MVA.
POSITION: Stock and/or May $40 calls (NUD EH low open interest).

New Plays (from the weekend):

Some smaller stocks:

NMTC (Numerical Technologies--$25.63; -0.68; optionable (QEK)): Business Software
http://biz.yahoo.com/p/n/nmtc.html
STATUS: Continues to squeeze down prices in the flying plateau pattern that is serving as a handle to a 16-week base. The stock showed yet another doji today as volume dropped off to below average levels (294.400; average 323,100). Great buying and money flow. 200 day MVA is at 33.17.
BUY POINT: 28.88, on volume of 485,000 or better. Remains a buy on the breakout up to up to 30.32.
POSITION: Stock and/or April $25 calls to buy (QEK DE)

CHBS (Christopher & Banks Corp--$41.94; -1.00; no options): Apparel
http://biz.yahoo.com/p/c/chbs.html
STATUS: Made a great breakout, hitting a high of 44.50 Tuesday before pulling back. Volume has remained very strong on the drop (488,900 today; average 182,000). The breakout buy point was 38.07, but it might not test all the way back to that level, as there is some possible support at its November high (and Monday's low after the gap-up), at 40. We will look for a continued drop to be on lower volume, looking for positions on a move back up from support.
BUY POINT: On a move back up after a test of 40.
POSITION: Stock.

Some new bigger basing stocks (from the weekend):

IBM (International Business Machines--$112.00; -4.61; optionable (IBM)): Computer hardware
http://biz.yahoo.com/p/i/ibm.html
STATUS: In a 5-month base, recently making a break from a handle consolidation but pulling back today. The stock closed at its low today after selling on level, above average volume (8.3 million; average 7.7 million), so we could get more of a pullback. The 200 day MVA is below at 108.34, and we will look for the stock to hold that level for a move back up toward the breakout high of 116.94 (hit today). Strong buying.
BUY POINT: A move up after a lower-volume pullback to the 200 day.
POSITION: Stock and/or March $105 (IBM CA) calls to buy.

FLEX (Flextronics--$38.13; -1.68; optionable (QFL)): Electronics
http://biz.yahoo.com/p/f/flex.html
STATUS: Could not make a strong move from its cup-with-handle, and today pulled back (after hitting up to 40.06). The stock held within its recent handle range, tapping just below its 10 day MVA (37.28) at its low of 37, and selling on continued low volume (7.6 million; average 8.9 million). We will see where it shakes out with the market, but we will look for it to hold here and try another move. Still shows excellent money flow and good buying.
BUY POINT: Breakout: 40.26 on volume of 13.5 million.
POSITION: Stock and/or April $35 calls to buy (QFL DG).

CYTC (Cytyc Corporation--$66.00; +0.25; no options): Scientific & technical instruments
http://biz.yahoo.com/p/c/cytc.html
STATUS: Announced a stock split today, but the announcement came just after the FOMC announcement, so the move was short-lived. The stock reach up to a high of 68 on the news, but pulled back to show a third consecutive doji. We could get a pullback, and we will see if the stock can hold the 62 range for a move back up on the strength of the announcement. On the move, look for continued strong volume (1.06 million today; average 5.4 million). High money flow and relative strength.
BUY POINT: From here: 66.88, on continued strong volume. Pullback: A move up after a pullback to the 62 range.
POSITION: Both positions: Stock and/or May $60 calls to buy (YKQ EL).

SVGI (Silicon Valley Group Inc--$36.00; +0.06; optionable (FQQ)): Semiconductor
http://biz.yahoo.com/p/s/svgi.html
STATUS: Continues to hold its 10 day MVA (35.50) as it moves in its handle to a four-month cup base. Semiconductors held up pretty well today, and we will see if the stock can continue to hold strong. Recent lows in the handle are at 33.50-34, and the handle high is 37.88. Good buying and excellent money flow.
BUY POINT: 38.01, on volume of 910,000 or better (average 619,000; today 479,000).
POSITION: Stock and/or March or June $35 calls to buy (FQQ CG or FG).

ADSK (Autodesk Inc--$36.88; -0.37; optionable (ADQ)): Software
http://biz.yahoo.com/p/a/adsk.html
STATUS: In an 8-month cup with handle base (prior high of 42) and has pulled back into a handle. Today the stock tapped below levels of its recent lows at 36 and just below its 18 day MVA (35.68) before pulling back up to close with a doji. Volume was up at 862,800 (average 720,500), and with that surge of volume the stock could be ready to move if given the chance. We will see what the market does, looking for a breakout with strength. Good buying and money flow.
BUY POINT: 40.01, on volume of 1 million or better.
POSITION: Stock and/or April $35 calls to buy (ADQ DG).

AC (Alliance Cap Mgmt--$58.10; -0.10; optionable (AC)): Financial
http://biz.yahoo.com/p/a/ac.html
STATUS: After breaking from its cup-with-handle pattern Monday the stock has pulled back slightly with consecutive dojis. Today the stock had a very narrow range and volume was substantially down at 131,200 (average 234,200). The pattern indicates a pullback to test the breakout, with the breakout level at 56.25.
BUY POINT: A move up after a pullback on continued low volume to the 10 56.25 level.
POSITION: Stock and/or April $55 calls to buy (AC DK).

Continued Plays:

MFLO (Moldflow Corporation--$30.13; +3.00; no options): Software
http://biz.yahoo.com/p/m/mflo.html
STATUS: What a great breakout move! The stock gapped up and, although it tested back to 26.88 at its low, it made a solid move up on great, heavy volume (774,900; average 70,000). The stock hit a high on the move of 30.88, and is still a buy on this move to 30.46.
BUY POINT: A move up from here on continued strong volume. Pullback: A move up after a test of the breakout at 28.88.
POSITION: Stock.

BSC (Bear Stearns Companies--$61.70; -2.34; optionable (BSC)):
http://biz.yahoo.com/p/b/bsc.html
STATUS: Pulled back to test its breakout from its cup-with-handle, closing just below the breakout point of 61.88. Volume on the selling was sharply higher and above average at 1.5 million (average 1.1 million), and the 10 day MVA is just below at 60.90. Looking for the stock to hold support there, with volume dropping back as it catches support, looking for a move back up toward the breakout high of 64.45. Strong money flow and still showing decent buying.
BUY POINT: Aggressive A move up after holding support at the 10 day MVA. Breakout: Over 64.45 on continued strong volume.
POSITION: Aggressive: Stock and/or April $55 calls to buy (BCS DK). Breakout: Stock and/or April $60 calls to buy (BCS DL).

FBF (FleetBoston Financial Cp--$43.34; -0.30; optionable (FBF)):
http://biz.yahoo.com/p/f/fbf.html
STATUS: Gapped up over our buy point (43.82) in its cup-with-handle pattern, but pulled back from that level to close. Volume remained strong at 6.54 million (average 3.8 million), but there is strong recent support at its 10 day MVA (42.64). On a continued drop we will look for that level to hold for a move back up.
BUY POINT: From here: A move to 44.12 with increased volume. Pullback: A move up after a lower-volume pullback to the 10 day MVA.
POSITION: Both buy points: Stock and/or April $40 calls to buy (FBF DH).

VRTY (Verity Inc--$29.75; -1.50; optionable (YQV)): Internet software
http://biz.yahoo.com/p/v/vrty.html
STATUS: Continues to range in the handle of the cup base, dropping back to close right on its 10 day MVA. Volume was up but continued to be rather low, coming in at 413,500 (average 632,000). Pattern high is 32.75 (200 day MVA is at 32.62); looking for a move through the 200 day. Still showing excellent money flow with good buying.
BUY POINT: Breakout: 32.88, on volume of 950,000 or better. Remains a buy on the breakout up to 34.52.
POSITION: Stock and/or June $30 calls to buy (YQV FF).

SRNA (Serena Software Inc--$34.00; -3.38; optionable (NHU)): Software
http://biz.yahoo.com/p/s/srna.html
STATUS: Dropped out of its handle Tuesday, and today continued down through its 50 day and 200 day MVA's (37.31 and 35.80, respectively) to close. Volume was heavy on Tuesday's selling, and slacked off a bit today although it was still above average (509,700; average 471,100). Not looking too good, and we will need to see a solid move back up through the 50 day and into the range of its handle. No new positions.
BUY POINT: Aggressive: On a move up from here on stronger volume. Bre

TGP (Georgia-Pacific--$31.90; -0.09; no options): Materials and construction
http://biz.yahoo.com/p/t/tgp.html
STATUS: After breaking out of its six-month cup-with-handle base, the stock has shown consecutive dojis, holding over its breakout. We will see if it can continue to hold, although the dojis could indicate a move back to recent support at its 18 day MVA (31.12). Strong money flow.
BUY POINT: From here: A move up on above average volume. Pullback: A move up after a lower-volume drop to the 18 day MVA.
POSITION: Stock.

C (Citigroup--$55.97; -0.23; optionable (C)): Large Banks
http://biz.yahoo.com/p/c/c.html
STATUS: Has been climbing up along its 10 day MVA (55.30) toward the handle high at 57.38, today reaching up to 56.99 before pulling back to close. At its low the stock tested the 10 day again. Held up pretty well today, thought the selling was on somewhat larger volume (15.6 million; average 13.2 million). We will look for it to hold support, still looking for a breakout.
BUY POINT: Breakout: 57.51, on volume of 19.8 million or better. Pullback: A move up after another test of the 10 day in a financials rally.
POSITION: Breakout: Stock and/or March $55 calls to buy (C CK). Pullback: Stock and/or March $50 calls to buy (C CJ).

LEH (Lehman Bros--$82.28; -2.92; optionable (LES)): Brokerage
http://biz.yahoo.com/p/l/leh.html
STATUS: LEH has been steadily climbing up its 10 day MVA (81.61) as it worked its way up the right side of its base. The stock recently broke over the left side of its cup base, and after hitting up to a new high of 86.20, the stock pulled back today with increased above average volume (2.96 million; average 2.45 million). The stock held the 10 day MVA as support, so we will see if it can hold this level again.
BUY POINT: A move to a new high on increased volume. Pullback: A move up in a rally in the financials after lower-volume drop back to the 18 day MVA, at 78.96.
POSITION: Stock and/or April $80 calls to buy (LES DP). Pullback: Stock and/or April $75 calls to buy (LES DO).

MER (Merrill Lynch & Co--$72.50; -2.15; optionable (MER)): Brokerage
http://biz.yahoo.com/p/m/mer.html
STATUS: Was moving laterally over its 18 day MVA (73.40) after having pulled back from its breakout move out of its cup-with-handle pattern (high of 80), but today the stock dropped back though that support to close. At its low of 70.80 the stock tested near its 50 day MVA (69.95), but it managed to close back up at the level of Monday's low and the December high. Pretty strong selling, with volume coming in above average at 5.56 million (average 4.64 million), so we will see if it can hold here or if it drops back to the 50 day.
BUY POINT: From here A move back over 76, on continued strong volume. Pullback The aggressive can play a move off of the 50 day in a rally in the financials.
POSITION: From here Stock and/or April $70 calls to buy (MER DN). Pullback Stock and/or April $65 calls to buy (MER DM).

JPM (J.P. Morgan & Co--$54.99; -0.99; optionable (JPM)): Banking
http://biz.yahoo.com/p/j/jpm.html
STATUS: After breaking out from its handle on less then enthusiastic volume, the stock pulled back today with a solid volume push (13.1 million; average 10 million). The drop itself was not that severe, holding to close over its breakout point of 54.69. Following the weak move up, we will see where the stock finds support, with the 10 day MVA at 53.72, and what has been strong support in the 18 day MVA at 52.62.
BUY POINT: After catching support on a lower-volume pullback, a move up from support with continued strong volume.
POSITION: Stock and/or June $50 calls to buy (JPM FJ).

KEI (Keithley Instruments Inc--$63.85; -2.94; optionable (KEI)): Electronics (scientific and technical instruments)
http://biz.yahoo.com/p/k/kei.html
STATUS: Reached a breakout high of 69.59 Tuesday, but pulled back today, although with much lower volume on the selling (345,800; average 492,400). We will see if this is just a test of the breakout, and watch for the stock to hold at its breakout point (63.50) for a move back up (the 10 day MVA is back at 60). Still shows excellent money flow and good buying.
BUY POINT: A move up after holding 63.50 on the pullback.
POSITION: Stock and/or April $60 calls to buy (KEI DL).

Good Investing!
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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