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Begin part 3 of 3

THE PLAYS:

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NEW FEATURE: Each play contains an additional link to a VIDEO that discusses the play in terms of the CHART PATTERN it is currently showing. Patterns, buy points, and targets are discussed along with other points that make the play a good one as well as what areas to watch for. We hope you enjoy this new addition.
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Upside: Not getting too involved with new upside until we see the resolution of this test of resistance on SP500 and NASDAQ.

Play Date: 11/11/2009
PRE (Partnerre Ltd.--$77.15; -0.13; optionable): Property and casualty insurance
http://biz.yahoo.com/p/p/pre.html
After Hours: $77.15
EARNINGS: 10/26/2009
STATUS: ABCD. After a 3.5 month trading range from April to July, PRE broke higher and has stepped upside since. Peaked in October just over 80 and is testing since, coming back to the 50 day EMA (76.37). As it has stepped to the downside it has formed an ABCD pattern with the D point, the lowest point, hit last week. PRE started back up this week, bouncing off the 50 day on some solid volume Monday. Tuesday and Wednesday it tested, again tapping the 50 day on the Wednesday low and rebounding, showing strong volume. Nice test of the initial move off the bottom of the pattern, and as PRE continues the move it is a buy. A move to the target lands an 85%ish gain on the option play.
VIDEO: http://investmenthouse1.com/ihmedia/PRE.wmv
Volume: 1.532M Avg Volume: 651.853K
BUY POINT: $77.66 Volume=1M Target=$84.77 Stop=$75.38
POSITION: PRE BO - Feb. $75c (60 delta) &/or Stock
http://www.investmenthouse.com/ci/pre.html

Downside:

Play Date: 11/11/2009
QID (QQQ Proshares UltraShort ETF--$20.96; -0.28; optionable): QQQQ 2:1 short ETF
After Hours: $20.91
STATUS: NASDAQ reversal. NASDAQ gapped to the prior peak in October on Wednesday but could not move the ball further, showing a tight doji on the candlestick chart. QID is the mirror image of the QQQQ (times two) so it is showing a bottoming pattern, something of a double bottom versus a double top on NASDAQ. If NASDAQ gaps lower, and hence QID higher, we move in on the gap, looking for it to start to slide sideways after the gap. A move to the target gives us a 100%ish gain on our options positions.
VIDEO: http://investmenthouse1.com/ihmedia/QID.wmv
Volume: 20.459M Avg Volume: 21.02M
BUY POINT: $21.05 Volume=25M Target=$24.00 Stop=$20.55
POSITION: QOI AT - Jan. $20c (63 delta)
http://www.investmenthouse.com/ci/qid.html

Play Date: 11/11/2009
SDS (UltraShort S&P500 ETF--$36.55; -0.38; optionable): SP500 2:1 short ETF
After Hours: $36.47
STATUS: The mirror of the SP500/SPY, SDS is making a double bottom as those other indices bump into key resistance, gapping higher Wednesday. As noted in the Technical Summary, if there is a gap lower Thursday on SP500, that is an island reversal and something we want to play for at least a short term trade. SDS or the SPY play can be our vehicle for profiting from that move. A move to the target gives us a 70%ish gain on the option play.
VIDEO: http://investmenthouse1.com/ihmedia/SDS.wmv
Volume: 39.53M Avg Volume: 40.778M
BUY POINT: $36.78 Volume=45M Target=$40.94 Stop=$35.96
POSITION: SSH AJ - Jan. $36c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/sds.html

Play Date: 11/11/2009
VMI (Valmont Industries--$76.89; -0.22; optionable): Metal fabrication
http://biz.yahoo.com/p/v/vmi.html
After Hours: $76.89
EARNINGS: 10/15/2009
STATUS: VMI set up an ascending triangle from August through mid-October, but . . . it didn't take. Gapped lower on earnings and broke below the 50 day EMA (79.34) on that move, then continued lower with the late October selling down to 71. VMI rallied back in November, climbing back to resistance at 80 as well as the 50 day. Monday VMI gapped higher and rallied over that resistance but reversed and closed below both levels. Weaker trade Tuesday and Wednesday, but holding at the 10 day EMA on the close. Looking for VMI to resume the move lower from here and give us a move down to the prior low near 70. A move to the target lands us a 50%ish gain.
VIDEO: http://investmenthouse1.com/ihmedia/VMI.wmv
Volume: 261.909K Avg Volume: 321.055K
BUY POINT: $76.48 Volume=450K Target=$71.65 Stop=$79.53
POSITION: VMI MO - Jan. $75p (-45 delta)
http://www.investmenthouse.com/ci/vmi.html

Good Investing!
Jon L. Johnson and your IH Alerts 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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