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Begin part 3 of 3
THE PLAYS
Wednesday night play results:
CRZO: Got wild on us, reaching way down but rallying back on volume. Still holding but don't like the wild action.
LPNT: Starting higher on some rising volume. Getting ready.
NXTP: Started moving toward the breakout but will need more volume.
SONE: Still moving laterally in a nice handle.
New plays for Friday:
Upside:
Play Date: 05/13/2004
NMSS (Natural Microsystems--$8.37; +0.08; optionable): Telecom processing systems
http://biz.yahoo.com/p/n/nmss.html
STATUS: Test breakout. NMSS shot out of a 12 week cup with handle base in mid-April on strong volume and rallied to just over 9. As the market started to sell NMSS eased back on lower and lower below average volume, coming back to test the 50 day EMA (7.77). A very orderly test while there was heavy market selling is a good indication that it will be ready to move higher when the pressure lets up. Solid 4 to 1 accumulation in the base (4 up price weeks on rising volume to 1 down price week on rising volume) shows money moved in during the base and set the foundation for a good run. Money flow remains strong even on the pullback. Volume started edging higher Thursday and we want to see a strong, above average volume surge as it moves through the buy point.
Volume: 350.396K Avg Volume: 415.045K
BUY POINT: $9.06 Volume=550K Target=$10.88 Stop=$8.32
POSITION: QNM IU - Sept. $7.50c (71 delta, low OI) &/or Stock
http://www.investmenthouse.com/cd/nmss.html
Play Date: 05/13/2004
CYBS (Cybersource--$7.69; +0.07; no options): Business software and services
http://biz.yahoo.com/p/c/cybs.html
STATUS: Breakout test. Exploded out of a 5 month flat base in mid-April and surging to 8. It has spent the past there weeks moving more or less in a lateral trading range holding the 18 day EMA (7.15) on the lows as it works below 8. Excellent 5 to 1 accumulation in the base set up the breakout. Money flow remains very strong and is moving up again ahead of price. Getting ready for the next move.
Volume: 166.736K Avg Volume: 458.227K
BUY POINT: $8.06 Volume=645K Target=$9.72 Stop=$7.48
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/cybs.html
Downside:
Play Date: 05/13/2004
MCO (Moodys Corp.--$63.27; -0.58; optionable): Business rating services
http://biz.yahoo.com/p/m/mco.html
STATUS: Put. MCO peaked in early April and has since been in a steady downtrend using the 10 day EMA (64.13) as resistance that stalls each move higher. It tanked last week and then made a low volume rebound this week, tapping the 10 day EMA on the Thursday high. It reversed from there and sold on sharply higher, above average volume, showing a tombstone doji on the candlestick pattern. The name says it all. Looking for the downside to resume.
Volume: 871.3K Avg Volume: 535.863K
BUY POINT: $63.15 Volume=804K Target=$60.42 Stop=$64.22
POSITION: MCO TM - Aug. $65p (-64 delta)
http://www.investmenthouse.com/cd/mco.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 perform well. If you have any suggestions for additions or deletions, email us. We don't cover them all each report, just when something interesting is developing.
COH, EBAY, GTRC, LPNT, TGT
Will choose the new stocks for the weekend report.
LPNT: Good move and ready for the breakout.
GTRC: Still looks good holding the 18 day EMA on the breakout test.
SUBSCRIBER WATCHLIST
We continually receive ideas for potential plays from subscribers. Many times they are already on our watchlists, other times not. We always take a look and sometimes find a gem or two, or more. We don't necessarily endorse these, but want to provide a forum for subscribers with ideas that may appeal to other subscribers. We may just put on the ticker or we might describe our thoughts as to why or why not we think it is a buy or sell. This is a way we can all learn a bit more and maybe find a few more candidates to make us some good money.
Downside:
EMMS: Falling on higher volume from a previous breach of the 200 day SMA.
ASPT: Making a tap at the 10 day EMA as it continues its downtrend. Looks ready to fall back over.
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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