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Begin Part 2 of 2

THE PLAYS:

Wednesday plays:
ACL: Gapped higher on stronger volume; just shy of the breakout.
ABC: Tried to rally higher on lower volume. Stalled at the 18 day MVA. Looks ready.
CVTX: Tried to make the move up but stalled on lower volume.

Best Plays:
1) WEDC: Very solid here.
2) QLGC: Can give a quick downside move
3) RCII: As can RCII.

NEW PLAYS:

Upside:

WEDC (White Electronic Desings--$7.39; +0.19; no options): Semiconductors
http://biz.yahoo.com/p/w/wedc.html
STATUS: Ascending wedge. We have been watching WEDC form this wedge the past month, watching the accumulation as it moves up the 200 day MVA (6.68). Speaking of accumulation, it is excellent at 8 upside weeks to just two distribution weeks since April. That is excellent accumulation as it makes its series of higher lows toward the breakout over 7.50. Wednesday saw a volume surge as the stock started moving up toward that breakout. Looks ready to move.
Volume: 140.06K Avg Volume: 69.727K
BUY POINT: $7.63 Volume=105K Target=$9.85 Stop=$7.1
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/wedc.html

Downside:

QLGC (Qlogic--$37.55; -0.44; optionable): Storage
http://biz.yahoo.com/p/q/qlgc.html
STATUS: Put. We are getting a bit aggressive here, but there is reason. After QLGC tested the 18 day MVA on Tuesday's high we thought about a put until the CSCO numbers came out after hours. Wednesday it gapped over the 18 day MVA (39) and then sold off on even heavier volume. This is a stock that can cover a lot of ground both up and down, and it has room for a quick move down to 34 near the July low. We think it might try one more move up Thursday and then roll over. That is why the buy point is over the closing price. If it does not test higher, we will just enter.
Volume: 17.995M Avg Volume: 11.112M
BUY POINT: After a test of 39, $38.25 on the way back down. Volume=17M Target=$34.35 Stop=$39.45
POSITION: QLC UH - Sept. $45 p (-52 delta)
http://www.investmenthouse.com/cd/qlgc.html

RCII (Rent A Center--$50.07; -1.27; optionable): Rent to own
http://biz.yahoo.com/p/r/rcii.html
STATUS: Test 50 day MVA (52.43). Similar action to QLGC. RCII rallied Tuesday but then tapped the 50 day MVA on the high Wednesday and made a big U-turn, falling 2.75 off of the session high as volume remained strong and above average. There is some support at 48, but it looks like the reversal that carried it below the short term moving averages has some momentum, and the good delta on a relatively inexpensive option means we don't have to get a monster move lower to make some good money on this one.
Volume: 550.283K Avg Volume: 402.09K
BUY POINT: $49.55 Volume=603K Target=$45.45 Stop=$51.25
POSITION: RQG UK - Sept. $55 p (-70 delta)
http://www.investmenthouse.com/cd/rcii.html

QQQ (QQQ Options--$22.8; +0.3; optionable):
http://biz.yahoo.com/p/q/qqq.html
STATUS: Failing at the 18 day MVA (28.42). The Nasdaq 100 rallied Wednesday on some higher volume, but it also could never recapture its gap higher and closed with a doji below resistance at the 18 day MVA. The index has stalled at the 18 day MVA time and again, and though there are some differences in this rally attempt than in past attempts, the lack of buying authority on the moves higher suggests to us the index is going to test lower again as it continues to base out and form a bottom.
Volume: 126.235M Avg Volume: 0
BUY POINT: $22.65 Volume=0 Target=$19.65 Stop=$22.71
POSITION: QAV UB - Sept. $28 put (-80 delta)
http://www.investmenthouse.com/ca/qqq.html

MEMBER PORTFOLIO: CUB, EBAY, HOTT; LOW, NOC, PG, QLGC, RCII, SRCL, WM

Nothing covered tonight.

CONTINUING/WATCHLIST:

We have made a change to the table. Instead of average volume we have included the target volume.

Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop

ABC 08/06 Put 65.1 +1.46 63.15 57.85 835K 1.5M 65
Buy not hit, but still looks very ready to fall.

ACL 08/06 DB hdl 35.2 +0.66 35.81 42.94 942K 900K 33.31
Buy not hit, but moving well.

AMGN 08/03 Test 50 45.72 +1.49 44.75 52.65 15M 20M 41.62
Current. Another up session, but again volume could not get there to push it through that recent high.

AMI 07/24 A Wedge 6.4 +0.26 6.77 9.94 75K 173K 6.45
Current. Bounced up off the 50 day MVA but not a lot of volume with it.

BAC 08/05 Put 65.25 +1.52 62.73 57.88 6.6M 7.2M 64.55
Buy not hit. Higher but on lower volume. Still looks ready to give it up.

BLUD 08/06 Test BO 26.12 +0.27 26.06 30.25 237K 300K 24.24
Buy not hit.

BLUD 07/24 A Wedge 26.12 +0.27 24.56 29.94 237K 300K 22.55
A doji on top of the 18 day MVA. Stalling out already.

CB 08/03 Put 59.43 +0.07 60.95 55.15 2.1M 1.6M 61
Current. Started to move lower on rising volume but held at 59 again.

CFCP 07/29 A Wedge 14.46 +0.25 15.55 18.65 14K 55K 14.35
Buy not hit. Still working through the pattern, looking better.

COLM 08/01 Dbl btm 34.52 +0.36 35 39.95 123K 275K 32.55

COLM 07/27 Dbl btm 34.52 +0.36 34.25 39.95 123K 275K 32.95
Current. Moving up off the 200 day MVA but still on that below average volume.

CUB 07/06 Cup 20.1 +0.43 0 0 51K 0 0

CVTX 07/31 BO 23.91 +0.01 24.05 30 630K 1.3M 21.35

DELL 07/27 Rv H&S 24.63 +0.31 23.12 26.15 19M 30M 22.55
Current. Gapped to the 50 day MVA on the open and the could not hold all of the move. Might have to take the move if it tries another move over the 50 day MVA at 25 and fails.

DOCC 07/25 BO 13.26 -0.22 11.9 14.25 93K 200K 11.07
Current. Basing out well in a flat consolidation at the 10 day MVA.

DORL 07/30 Dbl btm 37.82 +0.59 37.96 45.55 252K 410K 35.3
Buy not hit. Looks very good here.

DROOY 05/21 A Wedge 3.47 +0.12 4.85 7 3.2M 4M 4.30

EBAY 07/02 Test 50 55.51 +0.24 57.95 63 8.5M 600K 58.50

HGSI 07/22 Test 50 16.2 +0.39 15.31 18 2.4M 3.6M 14.50
Current. Recovering on some higher volume.

HOTT 07/06 Test 50 15.19 -0.36 0 0 937K 1M 0

HRBT 07/30 Dbl btm 26 -0.06 27.61 31.75 12K 41K 25.68
Buy not hit. Still in the pattern, holding above the 50 day MVA.

IMN 08/06 cup hdl 30.53 +0.02 31.11 36.45 259K 200K 29.95

IMN 07/29 Flat 30.53 +0.02 30.26 36.45 259K 200K 29.55
Current. Ran up to the next breakout at 31 and stalled.

INTL 08/05 Dbl btm 20.5 -0.5 21.42 24.65 176K 375K 19.92
Buy not hit. Could not live with the prosperity, falling back from the breakout.

JBLU 08/01 cup hdl 44.7 +0.1 48.65 54.45 93K 350K 44.85

LOW 07/06 Test 50 36.48 +0.83 0 0 5.6M 0 0

MTXX 07/31 A Wedge 9.73 +0.03 10.05 12 30K 38K 9.35
Buy not hit. Still in the pattern.

NOC 08/05 Put 110.72 +4.47 102.94 96.35 1.5M 2M 105.55

PG 07/23 Put 88.93 +1.21 81.45 75.75 5.5M 4M 83.50

QLGC 08/07 Put 37.55 -0.44 38.25 34.35 18M 17M 39.45

RCII 08/07 Put 50.07 -1.27 49.55 45.45 550K 603K 51.25

SCIO 07/29 cup hdl 26.25 -1.47 32.55 39 5.1M 1.5M 29.95
Current. Back under the 200 day MVA on massive volume. Out.

SRCL 07/13 Dbl btm 32.51 +0.58 35.25 42.25 394K 558K 32.78

SSD 08/01 PreSplt 58.82 +0.49 58.05 68 24K 25K 53.99
Current. Up again on lower volume, testing the 50 day MVA on the low. Needs to keep the momentum.

SYK 08/05 Put 51.65 +1.36 49.25 44.65 470K 1M 51.15
Buy not hit. Jumped over the down trendline but on no volume. May not hold.

TELK 08/03 Test BO 13.25 -0.75 14.65 17.65 594K 400K 13.05
Current. Dumped to the 18 day MVA on rising volume. Watch it here. Don't want it to fall further.

VALM 07/29 BO 20.9 -0.35 22.38 26.85 56K 120K 20.81
Buy not hit. Holding the 18 day MVA with a big doji on rising volume.

WEDC 08/07 A Wedge 7.39 +0.19 7.63 9.85 140K 105K 7.1
New.

WM 08/03 A Wedge 36.7 +0.61 37.55 42.25 4.6M 5.2M 34.92

WTW 05/23 Test BO 41.9 +0.25 43.7 50 217K 250K 40.64
Current. Doji over the 50 day MVA on no volume. We will give it some more time but not much.

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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