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Begin Part 3 of 3

Put Plays:

New Puts:

DJX ($102.08; -4.37; optionable (DJV)):
STATUS: Opened at it 50 day MVA (106.69) and tanked from there. The index has support in the 100 range. We are looking for a test of 103 before the next move down. A failed test will be our entry point.
PLAY: On a move down from a test of 103 on rising volume, April $110 puts to buy (DJV PF).

JPM (JP Morgan Chase & Co--$45.49; -3.46; optionable (JPM)): Financial
http://biz.yahoo.com/p/j/jpm.html
STATUS: Broke below the 200 day MVA (51.30) on stronger volume (8.5 million; avg. 10 million). We will look at entering with put positions on a move below 44, potential support, since volume has not broken above average yet. Initial profit target: 40.
PLAY: On a move below 44 on above average volume, April $55 or $50 puts to buy (JPM PJ or PK).

IMPH (Impath Inc--$45.00; -4.44; optionable (QPH)): Health Services
http://biz.yahoo.com/p/i/imph.html
STATUS: Dropped to the 200 day MVA (45.18), actually, just below it, on stronger volume (286,400; avg. 365,000). On a continued move down from the support (the stock may try to test the breach before heading down), we will look at buying puts. The stock failed to break resistance at the 50 day MVA and long term down trendline (51).
PLAY: On a move down from here on continued rising, above average volume, April $55 puts to buy (QPH PK).

New Plays (from the weekend):

ISSX (Internet Security System--$37.31; -5.07; optionable (ISU)): Software http://biz.yahoo.com/p/i/issx.html
STATUS: Continued down after having breached near-term support Friday at 42.50 and making a new 52-week low. Volume continued to be strong (1.71 million; average 881,000), and we are looking for more on the downside play here. We could catch it from here on continued downward movement on strong volume, but we also will see if we get a bounce up. If we do, we are looking at a possible failure at 42.50, catching it with a put play as the market starts to sell.
BUY POINT: From here On a move down from here on continued strong volume. Bounce: A move down on continued strong volume after a drop back from the 42.50 range.
POSITION: From here: April $45 puts to buy (ISU PI). Bounce: April $50 puts to buy (ISU PJ).

IFIN (Investors Fin Services--$67.00; -4.50; no options):
http://biz.yahoo.com/p/i/ifin.html
STATUS: Has really dropped the last three sessions, first taking out its 50 day MVA (76.64) and then its February low (72.44). Volume finally kicked in today, up at 407,000 (average is 439,000). Support now looks to be the 200 day MVA, at 60.89. We are going to see if IFIN takes a bit of a relief bounce, perhaps after initially dropping a bit more in the morning, and then look at puts when a move up fails in the 70-72 range.
BUY POINT: After a relief bounce back up to the 70-72 range, a move back down on increased volume.
POSITION: April $75 puts to buy (FLQ PO).

LH (Laboratory Corp--$136.50; -5.90; optionable (LH)):
http://biz.yahoo.com/p/l/lh.html
STATUS: Dropped back from its doji under the 50 day MVA (144.30), closing at last week's intraday low. Volume jumped back up after cooling off Friday, coming in at 434,300 (average 392,500). We will see if the stock continues to drop from here, or if it takes a weak bounce up to the 140 range; we will look at positions on a drop back after such a weak bounce, looking for the drop to be on increased volume. There is support from early January and the February lows near 130. That is the target.
BUY POINT: A move down on stronger volume after a failed bounce up to the 140 range.
POSITION: April $155 (LH EK) puts to buy.

UHS (Universal Health--$80.06; -3.68; optionable (UHS)):
http://biz.yahoo.com/p/u/uhs.html
STATUS: UHS has been steadily dropping, and today the stock accelerated down, dropping to close at support of its February low at 80 (and 200 day MVA, at 79.68). This level was our target, so we will see how the stock handles this support; there is pretty strong momentum, with volume moving up to 520,800 today (average 418,200). There is additional support below in the 77 range from November and January lows, which we will watch on a break through the 200 day. The next level of support is at 70, from June-August highs. If the stock looks to hold support and move back up, we will take profits here, and perhaps see if the stock sets up again for another put.
BUY POINT: Aggressive: A move below 79 on continued rising volume.
POSITION: April $90 puts to buy (UHS PR).

CHKP (Checkpoint Software--$64.44; -2.31; optionable (KEQ)): http://biz.yahoo.com/p/c/chkp.html
STATUS: Gapped down but showed a loose doji, again tapping up near its 10 day MVA (68.66) at its high of 67.63. The pattern suggests that CHKP will try to move up, and we will look for a move up (perhaps occurring after an initial drop tomorrow) to battle the 10 day MVA again, but ultimately lose and sell down on continued strong volume (up to 19.5 million today; average 7.6 million). Support from recent lows is at 57.50-60, and that would be our first target on a put play.
PLAY: A move down on continued strong selling volume after failing at the 68-70 level, with April $80 puts to buy (KEQ PP).

VTSS (Vitesse Semiconductor--$40.06; -1.38; optionable (VQT)): Semiconductor
http://biz.yahoo.com/p/v/vtss.html
STATUS: VTSS gapped down below the buy point of 41, but the stock moved up from there, hitting up to 44.13 (10 day MVA at 43.37) before pulling back to show a perfect doji. The pattern indicates a possible bounce back up, with the recent range having tops at 45. We will look for the bounce to lose momentum at the 43-45 range and then sell back down. The recent low is 34.75.
PLAY: After losing momentum at 43-45 on a move up from here, a run back down on continued rising volume on the selling (up to 9.04 million today; average 6.9 million), with April $50 puts to buy (VQT PJ).

Continued:

DS (Dallas Semiconductor Cp--$30.00; -2.54; optionable (DS)): Semiconductor:
http://biz.yahoo.com/p/d/ds.html
STATUS: After dropping back from its 200 day MVA (35.33) last week, the stock gapped through its 50 day MVA (32.26) today and continued down. Looking to continue the play down to January-February lows at 26-27. Volume was up today to 1.2 million (average 1.17 million) as the downward momentum continues to build. We can also look at new positions if the stock gives us a bounce up toward the 50 day and then turn back down on increased volume on the selling.
BUY POINT: New positions: A move down on increased volume after turning back down from resistance at the 50 day MVA.
POSITION: April $40 puts to buy (DS PH).

VRTS (Veritas Software--$53.94; -4.37; optionable (VUQ)): Software
http://biz.yahoo.com/p/v/vrts.html
STATUS: The stock has steadily dropped back from its 10 day MVA (currently 63), actually hitting up to 18 day MVA (currently 67.20) at its high last week of 69.75 before its move down. VRTS gapped down today and showed a loose doji, and undercut its February intraday low of 55.03 to make a new 52-week low. Off of this pattern we could see VRTS test back to its 10 day or higher, but we will look for the stock to run out of steam at that point. Today's low was 52.13, and we will watch that level on a drop back.
PLAY: On a move down on increased volume (17.1 million today; average 13 million) after a test up to the 10 day MVA, April $80 puts to buy (VUQ PZ).

QQQ (Nasdaq 100--$42.30; -2.80; optionable (QQQ)):
STATUS: Dropped big again on Monday, continuing the drop back from its 10 day MVA (currently 47.62) that started last Tuesday. The close was just above Friday's intraday low of 42.20, with today's low at 41.80. Volume continued to be strong at 80.6 million (average 61 million). We could get a move down in the morning, but we will see if we get a bounce that brings it back up to the 45-47 range (testing the down trendline it broke today); from there, we will look at the index to move back down in continued market selling and on strong volume for a continued put play. We will carefully watch the 42 level on the move for more possible support.
PLAY: After a move up that loses momentum at 45-47, on a strong move back down we will look at April $52 puts to buy (QQQ PZ).

BOBJ (Business Objects--$31.75; -1.72; optionable (BBJ)):
http://biz.yahoo.com/p/b/bobj.html
STATUS: Software. Did not get a bounce back up as the market was too weak. The stock split today and pulled back a bit off of Friday's doji, closing just off of Friday's low. There is support below at the January closing low at 29.72 and the intraday low at 26.64, but we will see if BOBJ can make a relief move back up toward the lows last week at 35, made before Friday's gap down. We will see if the stock can move up toward those levels, but will watch for it to weaken and fail, catching the stock as it drops back on strong volume. Our first target is 30.
PLAY: On a move down after a bounce up fails at 35, looking for increased volume on the drop, with April $43.375 puts to buy (BBO PS).

MERQ (Mercury Interactive--$35.06; -3.25; optionable (RQB)):
http://biz.yahoo.com/p/m/merq.html
STATUS: After making a new 52-week closing low last Thursday, the stock continued down the last two sessions, gapping lower and showing loose dojis. Today the volume dropped back a bit, but was still pretty strong at 5.52 million (average 4 million). From this pattern we could see an attempted move up, perhaps after opening a bit lower. We will look for a move up to run out of gas in the 42-43 range, and will again look at playing MERQ back down on strong selling volume in market weakness.
BUY POINT: A move down on continued strong volume after a move up toward 42-43 that fails.
POSITION: April $55 puts to buy (RQB PK).

CIEN (Ciena--$53.31; -11.82; optionable (UEE)):
http://biz.yahoo.com/p/c/cien.html
STATUS: Got ripped in the press and it continued down, making a nice put play. The downward pressure appears to be there still, as volume was huge at 45.7 million (average 16.9 million) and the stock there is no close support. You go back to April and May of 2000 to find levels at 40 and 45, and we will look for CIEN to continue down toward those levels. If we get a drop in the morning and then a relief bounce, we will wait for the bounce to fail and then look at positions as the stock is moving back down on big volume.
BUY POINT: From here: A drop down on continued strong volume. Failed move up: A move down after a move back up toward 60, looking for heavy volume on the selling.
POSITION: From here: April $65 puts to buy (UEE PM). Failed move up: April $72.50 puts to buy (UEE PV).

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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