stock recommendation, stock option

Begin part 3 of 3

THE PLAYS

Good movers Wednesday: BRCM; NABI; PKI

Tuesday night play results:
ATGN: Nice move on volume, backing off at the close. Could provide another opportunity Thursday early.
NABI: Starting up on rising, above average volume. Looks ready.
NANO: Strong trade, rallied hard, but gave back most of move. Still not bad.

New Plays for Thursday:

Downside:

Play Date: 01/28/2004
MDC (MDC Holdings--$62.05; -4.45; optionable): Homebuilder
http://biz.yahoo.com/p/m/mdc.html
STATUS: Put. MDC was recovering, moving back over the 50 day MVA (64) and forming a decent little handle, shaking out the last sellers. Well, the housing and mortgage numbers spooked more holders into selling Wednesday as the stock plunged through the 50 day on a huge volume spike. Often after such a move there is a reaction the opposite direction to test the breach, and that makes for a great entry point. If it continues to fall from here we will start a position and if it makes the test and fails, we will add to it.
Volume: 638.9K Avg Volume: 286.909K
BUY POINT: $61.72 Volume=315K Target=$58.25 Stop=$62.45
POSITION: MDC OH - Mar. $65p (-55 delta)
http://www.investmenthouse.com/cd/mdc.html

Upside:

Play Date: 01/28/2004
ENTU (Entrust--$5.19; +0.30; no options): Security software
http://biz.yahoo.com/p/e/entu.html
STATUS: Cup w/handle. With all of the worms digging around the internet the security software firms are starting to turn up, and indeed are reporting good earnings. ENTU is making the breakout from a 4 month base showing excellent 5 to 1 accumulation (5 up weeks on rising volume to 1 down price week on rising volume), a sign that money has been moving into the stock over the course of the base. Money flow is outstanding, racing higher ahead of price. Wednesday the price started to follow the money flow higher in anticipation of earnings, rallying on strong volume. Looking for the move to continue so we can step in.
Volume: 1.377M Avg Volume: 225.5K
BUY POINT: $5.32 Volume=400K Target=$6.65 Stop=$4.95
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/entu.html

Play Date: 01/28/2004
PWAV (Powerwave Technologies--$9.70; -0.26; optionable): Telecom equipment
http://biz.yahoo.com/p/p/pwav.html
STATUS: Cup w/handle. PWAV is working on the handle to a 5 month base sporting solid 6 to 3 accumulation. It tried the breakout 7 sessions back, gapping higher, but it came right back. It managed to hold th epattner, however, riding over the 18 day MVA (9.45) on mostly below average volume. Money flow is excellent, moving higher even as the stock moves laterally. WE are looking for PWAV to follow money flow higher and provide the strong volume breakout.
Volume: 3.3M Avg Volume: 3.374M
BUY POINT: $10.58 Volume=5M Target=$12.75 Stop=$9.75
POSITION: VFQ EB - May $10c (52 delta) &/or Stock
http://www.investmenthouse.com/cd/pwav.html

SUBSCRIBER PORTFOLIO: These are stocks subscribers suggest by vote that we put in a portfolio to track and move into the stocks if they set up well.

AVID, COH, DIS, GTRC, KKD, LPNT, OCR, TGT, UTSI, XMSR

KKD: The downtrend is taking control once again as KKD fails at the 50 day MVA and continues lower.

SUBSCRIBER WATCHLIST

We continually receive ideas for potential plays from our subscribers. Many times they are already on our watchlists, other times not. We always take a look at them and sometimes find a few pearls. We are including subscriber choices that could develop into plays. We are not necessarily endorsing these, but want to provide a forum for subscribers with ideas that may appeal to their portfolio. Typically we will put these on without commentary, but if we see something we really like or dislike we will point it out. That way we can maybe come up with some new plays, find some plays that may fit your style, and have another great educational tool to discuss problems or good aspects about stocks our subscribers are looking at.

KYPH: Was forming up a nice 2.5 month cup base that held at the 50 day MVA on the lows, but then gapped lower and solid off Wednesday on big volume.

STHLY: Very nice uptrend, going ballistic the past week. Showed a doji Tuesday and closed well off the high on huge volume, a classic sign of a potential reversal. Wednesday it lived up to the billing and solid off. Not a breakdown as it tapped the 10 day MVA and rebounded, but it will probably come back more before it is ready to continue a move higher.

SLNK: Pretty decent 4 month base forming. Trying to etch out a handle here after a strong run last week. Needs to hold the 18 day MVA and make a stronger breakout.

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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