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Begin part 3 of 3

THE PLAYS

Good movers Monday: CHL; CHRD; ENMC; LOW; SLAB

Best Plays:

1) OCLR: Big volume spike.
2) USPI: Very nice flat base.
3) BBY: Heading lower.
4) ALTI: Now it looks ready to resume the move.
5) CLE: Starting to fall.
6) RTH: Tapped the 18 day MVA and fell back.

NEW PLAYS:

Upside:

Play Date: 12/22/2003
HRLY (Herley Industries--$20.01; -0.05; optionable): Scientific & technical instruments
http://biz.yahoo.com/p/h/hrly.html
STATUS: Cup w/handle. Starting work on the handle to a 15 week base that formed over the 200 day MVA (17.50). Accumulation in the base is 2 to 0 (2 up price weeks on rising volume to 0 down price weeks on rising volume). That shows there were net buyers of the stock during the base as it weeded out the sellers. Now we see if it works laterally a bit more to shake out the last sellers and then shoots higher on strong volume. Money flow is surging up ahead of price and we are looking for HRLY to follow it higher but need to see stronger volume on the move.
Volume: 22.988K Avg Volume: 89.318K
BUY POINT: $20.24 Volume=135K Target=$24.32 Stop=$19.39
POSITION: FZQ ED - May $20c (54 delta) &/or Stock
http://www.investmenthouse.com/ct/hrly.html

Play Date: 12/22/2003
OCLR (Ocular Sciences--$28.3; +0.48; optionable): Medical instruments
http://biz.yahoo.com/p/o/oclr.html
STATUS: Flat base. After rallying since May, OCLR is finally taking a breather, working laterally over the 50 day MVA (26.72) as it trades around the short term MVA. Nice 3 to 0 accumulation as the base formed, indicating a lot of buyside interest and setting the base for the breakout and run. Volume fell off sharply the past two weeks, coming in well below average and then exploded higher Monday. Money flow is strong and is turning up ahead of the stock. This volume spike is telling us to get ready for a breakout move.
Volume: 218.383K Avg Volume: 86.545K
BUY POINT: $29.08 Volume=135K Target=$34.88 Stop=$27.68
POSITION: QLO DF - Apr. $30c (40 delta) &/or Stock
http://www.investmenthouse.com/ct/oclr.html

Play Date: 12/22/2003
USPI (United Surgical--$33.29; +0.01; optionable): Specialized health services
http://biz.yahoo.com/p/u/uspi.html
STATUS: Flat base. An excellent run from the December low, USPI moved up without hardly a pause. It is now taking the pause that refreshes, a 7 week lateral base that has held the 50 day MVA (31.16) on the lows. Indeed, the 50 day MVA jumped USPI higher to end last week. Accumulation in the base is a strong 3 to 0 and money flow is strong and moving up ahead of price. It is pausing at some mild resistance, but we don't expect that to hold the stock back. Volume has been below average for the month. Thus we need to see it spike higher on the breakout move.
Volume: 101.044K Avg Volume: 236.954K
BUY POINT: $33.88 Volume=350K Target=$40.65 Stop=$32.32
POSITION: QPJ EZ - May $32.50c (60 delta) &/or Stock
http://www.investmenthouse.com/ct/uspi.html

Downside:

Play Date: 12/22/2003
BBY (Best Buy--$50.45; -1.17; optionable): Electronics stores
http://biz.yahoo.com/p/b/bby.html
STATUS: Put. Retailers in general are getting boxed around, and BBY is continuing lower after peaking in late November and then gapping below the 50 day MVA (54.52). It rallied back up to that level and failed. It has rallied up again, but only made it to the 10 day MVA (52.28) before it rolled over again Monday on rising, above average volume. Money flow is tanking and still under distribution. It may pop back up after the first of the year when the sales results come out, but right now it is under pressure.
Volume: 5.094M Avg Volume: 4.241M
BUY POINT: $49.97 Volume=5M Target=$46.45 Stop=$51.06
POSITION: BBY NJ - Feb. $50p (-44 delta)
http://www.investmenthouse.com/ct/bby.html

CONTINUING PLAYS:

Upside:

Play Date: 12/01/2003
ALTI (Altair Nanotechnologies--$2.17; -0.02; no options): Industrial metals
http://biz.yahoo.com/p/a/alti.html
STATUS: Test breakout. A low volume doji over the 10 day MVA (2.11) as ALTI continued to work laterally on the test of the explosive move to start the month. Outstanding money flow is holding up well on the test. Looking for the stock to follow it back up with a solid volume bounce.
Volume: 763.946K Avg Volume: 1.366M
BUY POINT: New: 2.36 (orig. $2.05) Volume=1.2M Target=$2.95 Stop=$2.05
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/alti.html

Play Date: 12/11/2003
AVX (AVX Corp.--$16.13; -0.25; optionable): Diversified electronics
http://biz.yahoo.com/p/a/avx.html
STATUS: Testing the breakout. AVX broke out of a 12 week base 7 sessions back and shot up over 17. It immediately came back, but held the breakout over 16, holding the 10 day MVA (15.92) as well. Strong money flow is out ahead of price, and we are looking for AVX to hold here and provide another strong volume continuation of the breakout move.
Volume: 300.8K Avg Volume: 296.909K
BUY POINT: $16.25 Volume=450K Target=$19.55 Stop=$15.89
POSITION: AVX EC - May $15c (68 delta) &/or Stock
http://www.investmenthouse.com/ct/avx.html

Play Date: 12/18/2003
BJS (BJ Services--$36.2; -0.06; optionable): Oil and gas services
http://biz.yahoo.com/p/b/bjs.html
STATUS: Testing the breakout. BJS moved over the 200 day MVA (35.58) two weeks back on a strong surge. Thursday volume leaped higher as it moved off the 200 day. It could not complete the breakway, however, falling back on lower volume the last two sessions. It has held easily over the 200 day MVA, however, and we are looking for BJS to jump higher on strong trade along with the rest of the energy sector. Surging money flow, a real positive divergence. Looking for the price to follow the money flow higher.
Volume: 1.779M Avg Volume: 2.431M
BUY POINT: $36.74 Volume=3.6M Target=$40.55 Stop=$35.42
POSITION: BJS DG - Apr. $35c (68 delta)
http://www.investmenthouse.com/ct/bjs.html

Play Date: 12/17/2003
DTPI (Diamondcluster Intl.--$9.23; -0.04; no options): Efficiency experts to international clients
http://biz.yahoo.com/p/d/dtpi.html
STATUS: Ascending triangle. Looks to be putting the finishing touches on its short 8 week base, tapping down toward the simple 50 day MVA (8.93) on the low and then rebounding to recoup almost all of the loss. Volume was very, very low. A nice looking pattern with solid 3 to 0 accumulation. Getting ready, just needs to make the break away move on strong trade.
Volume: 87.953K Avg Volume: 377.411K
BUY POINT: $10.12 Volume=577K Target=$12.22 Stop=$9.41
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/dtpi.html

Play Date: 12/13/2003
MICU (Vicuron Pharma--$18.5; -0.25; no options): Drugs
http://biz.yahoo.com/p/m/micu.html
STATUS: Flat base. Backed off a hair Monday, tapping the 18 day MVA (18.31) on the low and rebounding to hold the 10 day. Volume was light on the selling, indicating no real change in the pattern, just a day of rest. Showing great price/volume action in the 10 week base, and the strong 4 to 0 accumulation (4 up weeks on rising volume to 0 down weeks on rising volume) bears that out. Money flow continues to head higher. Just need the break away breakout.
Volume: 232.408K Avg Volume: 338K
BUY POINT: $19.12 Volume=488K Target=$22.95 Stop=$17.98
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/micu.html

Play Date: 12/15/2003
MSPD (Mindspeed Technologies--$6.6; -0.28; no options): Chip equipment
http://biz.yahoo.com/p/m/mspd.html
STATUS: Ascending triangle. Ping-ponging between 6.25 and 7 the past week as it tightens up toward the end of a very nice 8 week base. It has used the 50 day MVA (6.13) as support, making higher and higher lows below the top at 7. Money flow is solid. Looking for an explosive breakout that these patterns can deliver.
Volume: 321.857K Avg Volume: 657.409K
BUY POINT: $7.15 Volume=1.1M Target=$8.65 Stop=$6.65
POSITION: - Apr. $7.50c (46 delta)
http://www.investmenthouse.com/ct/mspd.html

Play Date: 12/20/2003
OTE (Hellenic Telecom--$6.35; 0; no options): Foreign telecom services
http://biz.yahoo.com/p/o/ote.html
STATUS: Cup with handle. Got a bit ragged Monday, gapping down below the 18 day MVA (6.24) but then rallied furiously back on tremendous trade. That kept it in the 19 week base sporting outstanding 6 to 1 accumulation. Money flow is storng and is moving up ahead of price, starting to pick up speed. Want to see the stock make a big breakout move, not just a little weedling, slow rise higher.
Volume: 446.2K Avg Volume: 95.181K
BUY POINT: $6.52 Volume=135K Target=$8.15 Stop=$6.19
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ct/ote.html

Downside:

Play Date: 12/20/2003
ADI (Analog Devices--$44.37; +0.02; optionable): Semiconductors
http://biz.yahoo.com/p/a/adi.html
STATUS: Put. Still trying to cling to 44 below the 50 day MVA (45.24), ADI reached up and tapped that level on the Monday high and then fell right back down. Volume was lower and below average. Money flow continues to fall ahead of price as ADI struggles to get over the 50 day. It is trying to hold 44; it needs to break through here in a decisive move on some stronger trade.
Volume: 2.96M Avg Volume: 3.332M
BUY POINT: $43.85 Volume=4M Target=$39.75 Stop=$45.32
POSITION: ADI OI - Mar. $45p (-50 delta)
http://www.investmenthouse.com/ct/adi.html

Play Date: 12/20/2003
CLE (Claires Stores--$19.01; -0.39; optionable): Apparel stores
http://biz.yahoo.com/p/c/cle.html
STATUS: Put. Monday CLE was struggling post-split, falling on rising volume. It bounced and held some support at 19. It is still in trouble, however, and we are looking for a move below 19 on continued strong trade. This is where it needs to make the breakdown.
Volume: 955.1K Avg Volume: 446.636K
BUY POINT: $19.31 Volume=679K Target=$18 Stop=$20.24
POSITION: CLE ND - Feb. $20p (-61 delta)
http://www.investmenthouse.com/ct/cle.html

Play Date: 12/17/2003
RTH (Retail Holders Trust--$88.63; +0.18; optionable): Retail ETF
http://biz.yahoo.com/p/r/rth.html
STATUS: Put. Monday RTH reached up and tapped the 18 day MVA (89.27) on the intraday high and then fell back. Volume was still below average and low. Looking for it to fold below 88 on rising volume to enter. RTH formed a broad top in October and November, and then started down this month. It broke the 50 day MVA (90.13) early on and is now starting a downtrend that struggles each time it hits near the 18 day MVA.
Volume: 668.4K Avg Volume: 865.988K
BUY POINT: $87.98 Volume=2.5M Target=$84.02 Stop=$89.44
POSITION: RTH NR - Feb. $90p (-63 delta) or RTH PR - Apr. $90p (-56 delta)
http://www.investmenthouse.com/ct/rth.html

Good Investing!
Jon L. Johnson and 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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