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Begin Part 2 of 2

TEAM TRADES

BRO: On the SSR and in a flat base, we were looking for BRO to make a move. It had shown some volume spikes three weeks ago and then volume died down. Today it roared up early on strong volume, and we wanted to get in. No options, so when the stock hit the buy point at 42.84 about a half hour into the session we were very interested. The stock ran up to 43 and then pulled back to test the move. We decided to get in if it broke over that first high, so we put in an order at 43.03. The stock moved on up and the trade was done. We were not done, however, as the stock continued to perform well the entire session. So, we looked again before the close and saw strong volume. The stock had pulled back a bit from 44.20 down to 44, and we were interested in more stock. We fired out a Market Alert and then put in a quick order at the ask that was also taken care of and the stock closed near 44.25 on strong volume. That was averaging up into a position.

BJ: A retailer that has been performing very well, we were looking for BJ to breakout to a new high, and today it did just that. It hit the pivot of 55 about an hour into the session and the Market Alert went off. The stock had made a strong gap move to the pivot point, so another Market Alert went out and then we put in our order to buy. Again we were not done with this stock. A poor market, but the stock was behaving well. We checked heading into the close and the stock was showing excellent volume but had pulled back a quarter or so from the session high. We wanted to use this weakness to add to positions. Another Market Alert was fired off detailing this plan. Then we were back at it and picked up some more at the ask with about 15 minutes left in the session.

THE PLAYS:

Reading the Plays: Please note that when we reference the 10, 18, and 50 day moving averages (MVA), those are exponential moving averages (EMA). The 200 day moving average is always simple (SMA). We will note when we reference a particular MVA differently, e.g., a simple 50 day MVA. Please click on the Yahoo and chart links for company and charting information.

MVSN made the move and we sent a couple of Market Alerts on it. HKF moved as well. ESRX still looks ready for that 50 day MVA bounce.

Best Plays:
1) BSML: Making a strong move.
2) AZO: Looks to be completing its consolidation.
3) DGX: Call sale.

Updated:

BSML (Britesmile- -$12.14; +0.77; no options): Medical instruments (for teeth)
http://biz.yahoo.com/p/b/bsml.html
STATUS: BSML tested the 10 day MVA on low volume and then exploded today on yet another volume surge (544,600; average is 249,000). The stock is moving out of a long 17 month base, but it still must clear 17 to reach a new high. That does not really concern us at this point as the stock is powering ahead on strong volume. Big money flow and relative strength has already broken out. Initial target: 17
BUY POINT: 12.50 on 350,000 or better. Stop: 11.62 (7%) or 10.90 (just below the 10 day MVA).
POSITION: Stock only; no options.

http://www.investmenthouse.com/cd/bsml.html

MNC (Monaco Coach - -$28.26; -0.28; optionable): RV's
http://biz.yahoo.com/p/m/mnc.html
STATUS: MNC continues to pullback, today tapping toward its 18 day MVA on its low (27.90; 27.61 = 18 day). Overall volume has been lower on the pullback (though higher and above average today at 140,700; average is 88,227). This is the first substantial pullback after the breakout in June, and the stock is in a strong sector: leisure durable goods. We are looking for a bounce from here as an entry point for at lest a solid play to the old high. Target: 33 - 34.
BUY POINT: 29 (10 day MVA is at 28.64) on 100,000 shares or better. Stop: 26.97
POSITION: Stock and/or October 25 calls to buy (MNC JE; low open interest)

http://www.investmenthouse.com/cd/mnc.html

New

AZO (Autozone - -$37.91; +0.16; optionable): Auto Parts
http://biz.yahoo.com/p/a/azo.html
STATUS: After roaring higher out of a cup with handle base, AZO moved laterally and then shop up in June. It is now moving laterally again for the past three weeks as volume returns below average, but still showing healthy spikes on up days. It has a history of shooting up and them moving over to its 18 day MVA before the next run higher. It has found the 18 day MVA, and volume is edging higher (519,500 today; 549,500 is average). Today it started to show some promise on the move higher, and we are getting ready. Price/volume action is very good. Target: 45
BUY POINT: 38.85 on volume of 750,000 or better. Stop: 36.13
POSITION: Stock and/or September $30 calls to buy (AZO IF) on the move.

http://www.investmenthouse.com/cd/azo.html

THE PORTFOLIOS: Each report, we look at these to see which is in a buy position. We don't cover them all each time, just the ones that are looking as if they are ready to pick up a few shares.

THE LEADERS: We have revamped this portfolio, dropping for now CPN, SGR, NATI and BRKS. Those stocks have, for the most part, dropped off and need to form bases or do some more work in ones already existing. To the New Leader section we are adding DGX, EBAY, FRX, PSFT, ADVS, and BMET. In the Previous Leader section, VRSN, VRTS, ADBE and SEBL are retained. Ones dropped include AMCC, ARBA, BEAS, BRCD, CIEN, EMC, EXTR, GLW, JNPR, NEWP, NTAP, PMCS and SCMR. All of these stocks will be kept on watch in context with improvement in their sectors and the market.

New Leaders: ESRX, LLL, ACS, NVDA, DGX, EBAY, FRX, PSFT, ADVS, BMET.
LLL utterly collapsed today. It has been long gone.
ACS is looking much better, back over the 50 day MVA on average volume.
EBAY is succumbing to the worries over YHOO earnings, breaking the 50 day MVA on strong volume. It needs to recovery pretty fast.
PSFT is back below the 50 day MVA on average volume. It is spending too much time there. It too must recover right away or we are selling.
ADVS looks like a put as it cannot get back over the 200 day MVA.
BMET was not helped by the split as it gapped above the 50 day MVA, but then sold hard on strong volume. It too will be a sell if it cannot get back up.
Previous Leaders we are still interested in: ADBE, SEBL, VRSN, VRTS

DGX (Quest Diagnostics - -$69.40; -2.55; optionable): Medical labs
http://biz.yahoo.com/p/d/dgx.html
STATUS: Hit 75 last week and has sold back, today crossing below the 18 day MVA (69.89) on rising though still below average volume (484,100). Thus the selling remains light. We are anticipating a pullback to the $65 range. We are looking to sell calls on our current positions and then buy them back when it bounces.
SELL POINT: After a test of 69.89 and further selling.
POSITION: July $65 calls to sell (4.90 x 5.40 on the close). We will buy them back at 65. The options should be about $1.40 to buy back at that point ($5 move down to 65 times the .80 delta =4. $5.40 - 4 = 1.40).

http://www.investmenthouse.com/cd/dgx.html

UP & COMERS PORTFOLIOS: We have revamped the Up & Comers portfolio, and are dropping EXDS, TQNT, BVSN, SANM, PKI and GMST for now, adding BBBY, IGT, RCII, CHS, KG and AEOS.

LNCR, BJ, ANF, LOW, HI, THQI, BBBY, IGT, RCII, CHS, KG, AEOS.
LOW is tanking further below the 50 day MVA. Today was the last chance to sell for now.
BBBY a doji below the 50 day MVA on above average volume. Can it move back over 29.50?
ANF is still testing the 50 day.
IGT fell again; sell.
CHS was upgraded, but it could not make much headway; we will watch it.

MEMBER PORTFOLIO: BRCM, CHKP, CSCO, EMLX, IDTI, INTC, JDSU, MVSN, NT, PWER, SUNW, VTSS

Still tabulating the survey, so if you have any further stocks you want covered, send them in! Let us know with an email, and we will compile the stocks with the most suggestions! Thanks to those who have already sent in picks we really appreciate it! We will begin tallying the returns next week.

BRCM ended its run of bucking the market, tanking below the 50 day MVA today.

MVSN (Macrovision--$70.95; +2.48; optionable (MVU): Media
http://biz.yahoo.com/p/m/mvsn.html
STATUS: Continued the move higher today, again on above average volume (1.054 million; average is 644,090). We still very much like what we see here as MVSN cleared the prior closing high in this portion of the base. May be some resistance at 75. We still like it.
BUY POINT: Breakout: 71.62, on volume of 966,000 or better. Stop: 66.61.
POSITION: Breakout: Stock and/or October $70 calls to buy (MVU JN).

http://www.investmenthouse.com/cd/mvsn.html

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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