stock option, Breakout test

THE PLAYS

Plays from the Tuesday night report:
ATYT: Surging on a breakout on strong volume.
DRAX: Huge volume breakout.
MIPS: Another big day as it broke out on very strong trade.
PTEK: Volume was up as was price, but it was a volatile session.

New Plays:

Play Date: 01/07/2004
ERES (Eresearch Tech--$30.71; +2.69; optionable): Electrocardiographic related services to the medical industry
http://biz.yahoo.com/p/e/eres.html
STATUS: Double bottom. A leader in 2002 and surging in 2003, ERES made us some great money. It needed a rest and after peaking in late October it started the current 10 week base. It is on the way back up and Wednesday was upgraded. That helped the stock jump up on strong, above average volume, clearing the 'hump' in the middle of the double bottom (29.93). That is a breakout from this type of pattern, and we are looking to take positions on a further move. It may then form a handle as it reaches toward 32 to 33. After that we will add to positions on a breakout from that handle. A longer term winner that looks ready to start the next leg. We will give it a chance if it can continue the move on strong volume.
Volume: 2.853M Avg Volume: 1.418M
BUY POINT: $31.25 Volume=2.1M Target=$37.58 Stop=$29.06
POSITION: DBO FF - June $30c (60 delta) &/or Stock
http://www.investmenthouse.com/ci/eres.html

Play Date: 01/07/2004
PEGA (Pegasystems--$9.09; +0.49; no options): Business software
http://biz.yahoo.com/p/p/pega.html
STATUS: Cup w/handle. PEGA is in the process of breaking out of a 6 month base sporting outstanding 10 to 1 accumulation (10 up price weeks on risign volume to 1 down price week on rising volume). That indicates that the stock was being bought as it worked laterally after doubling off of the March low. After a below average volume pullback the past week to test the 18 day MVA, volume started to surge Tuesday. It lept higher again Wednesday as PEGA broke out. Strong money flow and looking for positiosn on a further move. May not be one we want to hold forever, but it can move up to its prior high from 2002 over 11 and give us a great gain.
Volume: 243.814K Avg Volume: 97.59K
BUY POINT: $9.25 Volume=146K Target=$11.12 Stop=$8.59
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ci/pega.html

Play Date: 01/07/2004
RETK (Retek--$11.05; +0.35; optionable): Internet software and services
http://biz.yahoo.com/p/r/retk.html
STATUS: Cup. Volume has surged the past two sessions as RETK shot higher off the bottom of its 11 week base. Accumulation in the base is a solid 4 to 1, setting the foundation for a solid breakout and a good run after the breakout move. Now it may stall out at this level being the left side of the base and form a handle where those that bought at the prior high sell out to get out 'even.' If that happens we will wait patiently and let it break over the high in that handle. If it keeps surging here on strong volume we will start a position then wait for a test to complete the buy.
Volume: 1.833M Avg Volume: 572.272K
BUY POINT: $11.22 Volume=858K Target=$13.48 Stop=$10.43
POSITION: QRD DB - Apr. $10c (70 delta) &/or Stock
http://www.investmenthouse.com/ci/retk.html

Play Date: 01/07/2004
SINA (Sina.com--$41; +0.7; optionable): Chinese internet
http://biz.yahoo.com/p/s/sina.html
STATUS: Cup w/handle. The chinese stocks are moving well, having formed nice bases. SINA is starting a handle to its 12 week base that formed roughly at the 50 day MVA (35.31). Accumulation in the base is positive at 2 to 1; all it takes is positive accumulation to set the foundation for a breakout and subsequent run. These stocks can run like a deer when they start, and they have been stirring the past week. We will be patient and let SINA complete its handle and look for a strong volume break higher over the recent highs.
Volume: 6.142M Avg Volume: 8.147M
BUY POINT: $41.58 Volume=12M Target=$50 Stop=$38.67
POSITION: NOQ FH - June $40c (61 delta) or NOQ CH - Mar. $40cc (59 delta) &/or Stock
http://www.investmenthouse.com/ci/sina.html

End part 2 of 3

stock option
Breakout test