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Begin part 3 of 3

THE PLAYS:

Upside: Again we have some nice setups that will either make a move worthy of a buy or not. Still not pushing the issue given the selling strength, instead just letting the plays come to us.

Play Date: 11/02/2009
CREE (Cree, Inc.--$41.86; -0.24; optionable): Chip equipment
http://biz.yahoo.com/p/c/cree.html
After Hours: $41.87
EARNINGS: 01/19/2010
STATUS: Breakout test/ABCD. A gap higher two week's back took CREE to a new rally high. It didn't get too far as the market started to sell and CREE was pulled lower with that selling. It did not break or otherwise tank. It simply stepped back toward the 18 day EMA (41.48) and filled the modest gap, showing a nice doji with a tail or shadow that dipped below the 18 day and then rebounding to basically close flat. Very low, below average volume on the test shows no sellers of account. The pullback is holding the 38% Fibonacci retracement as well as forming a short ABCD pattern. Looking for CREE to hold near the 18 day EMA and then make the move higher. Want to see it hold the gains into the close to give us the entry point.
Volume: 1.662M Avg Volume: 2.144M
BUY POINT: $42.69 Volume=2.8M Target=$49.55 Stop=$41.18
POSITION: CQR AH - Jan. $40c (63 delta) &/or Stock
http://www.investmenthouse.com/ci/cree.html

Play Date: 11/02/2009
GNTX (Gentex Corp.--$16.00; -0.01; optionable): Auto parts
http://biz.yahoo.com/p/g/gntx.html
After Hours: $16.00
EARNINGS: 10/21/2009
STATUS: Gap test. Another stock that gapped higher out of a 13 week trading range and is now testing that gap. Nice gap and run and then an orderly test the past week, holding at the 10 day EMA (16.07) and the gap up point Friday even as the market sold off hard, and showing a nice doji with tail on Monday that tapped the 18 day EMA on the low (15.73). Excellent breakout over key resistance and that attests to the strength. If GNTX can hold the gap point (15.81) and bounce, that is worth buying. A hold of a gain over the buy point into the close is when we move in.
Volume: 1.563M Avg Volume: 1.261M
BUY POINT: $16.38 Volume=1.8M Target=$18.85 Stop=$15.68
POSITION: GXC CC - Mar. $15c (64 delta) &/or Stock
http://www.investmenthouse.com/cd/gntx.html

Play Date: 11/02/2009
PNC (PNC Finanical--$50.91; +1.97; optionable): Money center banks
http://biz.yahoo.com/p/p/pnc.html
After Hours: $50.49
EARNINGS: 10/22/2009
STATUS: Flag. Back on as PNC is setting up again for a new break higher. It jumped away from us last Thursday but it dumped back Friday only to hold and bounce nicely to start the week. Nice breakout just over a week back in mid-October as PNC reported strong results. The move took PNC out of a 6 month cup with handle base. It has now tested that breakout, holding at near support at the 10 day EMA (49.53). Moved up Monday and held a decent chunk of the gain. If PNC continues the move higher we can start taking some positions.
Volume: 6.678M Avg Volume: 6.044M
BUY POINT: $51.11 Volume=7.5M Target=$58.95 Stop=$48.11
POSITION: PNC AJ - Jan. $50c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/pnc.html

Play Date: 11/02/2009
TWP (Trex--$16.13; +0.22; optionable): Decking products (manufactured wood, etc.)
http://biz.yahoo.com/p/t/twp.html
After Hours: $16.05
EARNINGS: 11/09/2009
STATUS: ABCD. Nicely formed 14 week pattern has set up, and it looks as if TWP is forming the D point in the pattern right now as it tested lower Monday and then rebounded for a modest gain on a spike in volume: the sellers stepped in and jumped it back up off the lows. TWP just undercut the early October low and looks ready to bounce after a second down leg that roughly matches the first one from mid-September to early October. That is a good feature to see in this type of pattern. Like the doji Monday on high volume. That makes this pattern worth buying into as it rebounds off this level.
Volume: 224.809K Avg Volume: 144.657K
BUY POINT: $16.42 Volume=217K Target=$20.88 Stop=$15.27
POSITION: TWP DC - Apr. $15c (66 delta) &/or Stock
http://www.investmenthouse.com/ci/twp.html

Downside:

Play Date: 11/02/2009
SLAB (Silicon Labs--$41.92; +0.02; optionable): Semiconductors
http://biz.yahoo.com/p/s/slab.html
After Hours: $41.92
EARNINGS: 10/28/2009
STATUS: Bear flag. After hitting a new recovery high in early September, then corrected 78% off that level. Bounced to start October and could not make the prior high before rolling over. Sold off to a new low on this leg and then rebounded last week and into Monday, testing the selloff. Tapped the 10 day EMA (42.44), the weakest resistance, and fell back Monday, showing a candlestick doji. Looks ready to continue lower and if it holds a downside move into the last hour it is a buy. A move to the target lands a 46%ish gain.
Volume: 931.309K Avg Volume: 882.74K
BUY POINT: $41.66 Volume=1.2M Target=$38.22 Stop=$43.21
POSITION: QFJ MI - Jan. $45p (-61 delta)
http://www.investmenthouse.com/ci/slab.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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