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Begin part 3 of 3

THE PLAYS

Tuesday night play results:
ACLS: Nice volume as it broke through resistance.
CEN: Paused right below the breakout point.
VRSN: Strong volume but could not advance. Still quite solid.

New plays for Thursday:

Upside:

Play Date: 05/26/2004
AKAM (Akami Technologies--$14.85; -0.28; optionable): Internet software and services
http://biz.yahoo.com/p/a/akam.html
STATUS: Double bottom. AKAM is in a 13 week base and is now testing the hump in the double bottom at 15.57. It surged up toward that level Tuesday on strong, above average volume, then paused Wednesday on much lower, below average trade. It has formed both legs of the double bottom, and is now at the moment of truth for the pattern. It may slide laterally for a few sessions and form a handle, but if it gives a strong volume move sooner, we want to be ready. Solid money flow and we are looking for AKAM to follow it to a breakout.
Volume: 2.425M Avg Volume: 3.18M
BUY POINT: $15.25 Volume=4.8M Target=$18 Stop=$14.18
POSITION: UMU KC - Nov. $15c (58 delta) &/or Stock
http://www.investmenthouse.com/cd/akam.html

Play Date: 05/26/2004
MACE (Mace Security Intl.--$6.23; +1.50; optionable): Specialty chemicals
http://biz.yahoo.com/p/m/mace.html
STATUS: 50 day EMA test. Volume surged Wednesday as MACE looks ready to resume the move higher after a rather wild ride in April. It broke out early that month and surged over 14 intraday before reversing and giving back almost the entire move. It held up at the 50 day, moved laterally for three weeks, and then started this move Wednesday. Money flow is screaming higher ahead of price and we are looking for to MACE to follow the money. Momentum play, but this stock has shown it has a lot of momentum.
Volume: 13.38M Avg Volume: 3.533M
BUY POINT: $6.39 Volume=4M Target=$9 Stop=$5.94
POSITION: QXA IA - Sept. $5c (74 delta) &/or Stock
http://www.investmenthouse.com/cd/mace.html

Play Date: 05/26/2004
SMTC (Semtech--$24.69; +0.19; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/s/smtc.html
STATUS: Double bottom. Solid bounce off support at 21 this week on rising, above average volume as SMTC forms the right leg to its 17 week base. It has rallied up close to the hump in the double bottom (25.14) on stronger trade with surging money flow. As with AKAM it may try to slide laterally here for a few sessions and then make the breakout, but with that surging money flow we want to be ready to move in if it does not slow down.
Volume: 1.945M Avg Volume: 1.146M
BUY POINT: $25.24 Volume=1.7M Target=$29 Stop=$23.47
POSITION: QTU IE - Sept. $25c (51 delta) &/or Stock
http://www.investmenthouse.com/cd/smtc.html

Continuing upside plays:

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.

ALDN, BRCM, CECO, COH, DNA, EBAY, GTRC, LPNT, TGT

GTRC: Another breakout on volume as it continues to step higher. This always seems like an unlikely stock to perform so well, but it is all in the earnings.

ALDN: Explosive move on huge trade.

DNA: Looks to be readying for another move.

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.

Upside:

VARI: We are watching this one as well as it forms up over the 50 day EMA in a decent looking base.

AMT: Trying for a new high, surging Tuesday on strong volume. Took a breather Wednesday, but still looks ready.

Downside:

BBOX: Collapsed below the 200 day SMA, has made a lower volume rebound, showing a tight doji Wednesday below the 10 day EMA.

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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