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Begin part 3 of 3

THE PLAYS:

Upside: These stocks will either show us they are worthy of a buy or not. We won't push the issue given the selling strength, instead just letting the plays come to us.

Play Date: 10/30/2009
APAC (Apac Customer Svc.--$6.45; -0.25; optionable): Business management services
http://biz.yahoo.com/p/a/apac.html
After Hours: $6.45
EARNINGS: 11/04/2009
STATUS: Pennant. Outstanding relative strength as APAC goes about its business as if the market is just fine. APAC moved to a nine year high just over two weeks back, breaking out from a 6 month ascending triangle. Strong break on solid volume, and then the past two weeks APAC is testing, coming back to rest right on top of the prior base. Indeed, it is making something of a double bottom at that level as it forms this pennant. Like to see those little double bottoms on these pullbacks or a really good candlestick indication. APAC has held up well as the market sold off, a great indication. Looking for a new bounce higher that can hold into the last hour to give us a buy. If it shows it we can take some positions despite this market based on that great relative strength.
Volume: 395.271K Avg Volume: 506.886K
BUY POINT: $6.62 Volume=645K Target=$7.95 Stop=$6.22
POSITION: QOH CA - Mar. $5c (77 delta) &/or Stock
http://www.investmenthouse.com/ci/apac.html

Play Date: 10/31/2009
BRCD (Brocade Communications--$8.60; -0.23; optionable): Data storage devices
http://biz.yahoo.com/p/b/brcd.html
After Hours: $8.60
EARNINGS: 08/20/2009
STATUS: Gap test. BRCD gapped out of a 10 week consolidation in early October and rallied nicely. The past three weeks BRCD has tested that gap, but it has held at the gap point that coincides with the 50 day EMA (8.49) and the mid-September peaks. Excellent place for BRCD to hold. If it does and can start back up, that shows the strength of the breakout gap and that is worth buying into for a rally back up to the prior high and a bit beyond.
Volume: 13.997M Avg Volume: 21.501M
BUY POINT: $8.87 Volume=25M Target=$10.45 Stop=$8.25
POSITION: BQB AU - Jan. $7.50c (73 delta) &/or Stock
http://www.investmenthouse.com/ci/brcd.html

Play Date: 10/31/2009
USO (United States Oil Fund ETF--$39.32; -1.58; optionable): Oil spot price ETF
After Hours: $39.38
STATUS: Pennant. Oil is either going to hold here or not. It will show us by how it responds to the test of this mid-October breakout. USO broke out from a 17 week base and rallied to a new high for the year. It is now testing, forming the current two week pennant, holding at the 18 day EMA (39.41). If it holds and bounces, holding the gain into the close we can take some positions. If it comes back further, say toward 38 and the August peaks and it might if the dollar continues to strengthen ahead of next week's FOMC meeting that could would give us a new entry point if it holds and bounces from there.
Volume: 12.986M Avg Volume: 13.135M
BUY POINT: $40.11 Volume=15M Target=$48.65 Stop=$38.55
POSITION: UBO AM - Jan. $39c (56 delta) &/or Stock
http://www.investmenthouse.com/ct/uso.html

Play Date: 10/31/2009
VNO (Vornado Realty--$59.56; -0.88; optionable): Real Estate REIT
http://biz.yahoo.com/p/v/vno.html
After Hours: $59.25
EARNINGS: 11/03/2009
STATUS: ABCD. Strong surge in September to a new post-March peak, tapping 70 on that move. It then started to test back, tapping at the 50 day EMA (60.12) to start October and bouncing. That formed the B point. It rebounded to 65 and failed; C point. Last week it sold off on Wednesday to a new pullback low and then reversed Thursday, holding the move on Friday. Looks as if that was the D point. Now we are looking for a move up through the 50 day EMA that holds to the close to give us the buy. Not bad action in a weak market.
Volume: 4.886M Avg Volume: 3.128M
BUY POINT: $60.28 Volume=4M Target=$69.98 Stop=$56.32
POSITION: VNO AL - Jan. $60c (53 delta) &/or Stock
http://www.investmenthouse.com/cs/vno.html

Downside:

Play Date: 10/31/2009
PVH (Phillips-Van Heusen--$40.15; -0.77; optionable): Apparel manufacturing
http://biz.yahoo.com/p/p/pvh.html
After Hours: $40.15
EARNINGS: 11/18/2009
STATUS: Bear Flag. Retail was one of the sectors that led the move higher, but it broke hard to the downside the past week, PVH included. PVH crashed the 50 day EMA (40.61) on the Wednesday selloff. Thursday it made the bounce with the market and even recaptured the 50 day EMA on the close. Friday it was off to the upside gain, racing to the 10 and 18 day EMA at 42; that is also the midpoint of the September through October consolidation range. It reversed intraday and closed below the 50 day on the strongest volume in a month and the only above average volume in a month. That last peak just over a week back showed a divergent top as MACD made a much lower peak as PVH matched the September peak. Ready to move in as PVH continues the move lower. A run to the initial target lands a 43%ish gain.
Volume: 982.425K Avg Volume: 840.688K
BUY POINT: $39.88 Volume=1M Target=$36.11 Stop=$41.08
POSITION: PVH OH - Mar. $40p (-48 delta)
http://www.investmenthouse.com/ci/pvh.html

Play Date: 10/31/2009
SBUX (Starbucks--$18.98; -0.54; optionable): Coffee shops
http://biz.yahoo.com/p/s/sbux.html
After Hours: $18.98
EARNINGS: 11/05/2009
STATUS: Bear flag. SBUX is another retailer that trended nicely higher following a July gap higher out of a 3 month trading range. This past week SBUX gapped lower and sold through the 50 day EMA (19.53) on Tuesday. Spent the rest of the week testing, bouncing back up Thursday to close just below that level, moving over it intraday on Friday only to roll over on stronger, above average volume. MACD was lower on the last peak, making that divergent top that shows the eroding strength. On a continued move lower we move in. A run to the target lands a 47%ish gain. SBUX made us a ton of money in its 'great decline' of 2007 and 2008, and then made us some nice gain as it reversed and trended higher this year. Now it looks as if we will make some downside money on it again and we will just have to see how much it will give us.
Volume: 12.435M Avg Volume: 11.088M
BUY POINT: $18.84 Volume=14M Target=$17.08 Stop=$19.82
POSITION: SQX MD - Jan. $20p (-55 delta)
http://www.investmenthouse.com/ci/sbux.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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