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Begin part 3 of 3

THE PLAYS

Good moves Wednesday: ISRG; MSA; QCOM; SAPE; SNDA

Tuesday night play results:
CNQR: Reached lower but rebounded. Still looks ready to fail.
XLE: Lower volume relief bounce after Tuesday tank.
BLS: Still setting up over the 200 day SMA
TUNE: Hit the target late. On a continued move it is still a buy.

New Plays:

Upside:

Play Date: 08/18/2004
BSTE (Biosite--$44.94; +1.32; optionable): Diagnostic substances
http://biz.yahoo.com/p/b/bste.html
STATUS: Flat base. Working through a 9 week flat base that is actually part of a larger 14 month cup with handle base. Accumulation in this last part of the pattern is a strong 2 to 0, indicating net buying. Moving laterally over the 50 day EMA (42.77) during the lateral move, another indication of solid support. Strong money flow is moving up ahead of price. Volume was up Wednesday as BSTE moved up off the 50 day EMA. Looking for it to continue to rally higher as the stock continues to move to the buy point.
Volume: 335.965K Avg Volume: 330.999K
BUY POINT: $45.15 Volume=496K Target=$51 Stop=$43.62
POSITION: BQS AI - Jan. $45c (56 delta) &/or Stock
http://www.investmenthouse.com/ci/bste.html

Play Date: 08/18/2004
HAR (Harman Intl.--$85.20; +4.96; optionable): High end auto parts
http://biz.yahoo.com/p/h/har.html
STATUS: 200 day SMA test. HAR makes strong runs then tests support. It rallied to 90 to end June and then made the current pullback to the 200 day (77.39). It reported strong earnings Wednesday and exploded higher on the news. Surging money flow. Looking for a continued move over the 50 day SMA (85.77) to enter and catch a move up toward the prior high.
Volume: 2.05M Avg Volume: 492.695K
BUY POINT: $85.88 Volume=700K Target=$92 Stop=$83.38
POSITION: HAR JQ - Oct. $85c (54 delta)
http://www.investmenthouse.com/ci/har.html

Play Date: 08/18/2004
INSP (Infospace--$37.84; +1.14; optionable): Internet information provider
http://biz.yahoo.com/p/i/insp.html
After Hours: $37.81
STATUS: Cup. After some harsh July selling INSP recovered on a strong earnings report to hold its 18 week base and is now back at prior resistance near 38. Money flow is very strong, moving well ahead of price. The past two sessions volume has started to move higher, coming in near average as it moved off of the 50 day EMA (34.28). Looks ready to follow the money higher, and there is a lot of room to make us money without even having to take out the prior high.
Volume: 1.132M Avg Volume: 1.139M
BUY POINT: $38.25 Volume=1.5M Target=$43.55 Stop=$37.45
POSITION: IOU AH - Jan. $40c (51 delta) &/or Stock
http://www.investmenthouse.com/ci/insp.html

Play Date: 08/18/2004
KMRT (Kmart Holding--$78.76; +3.59; optionable): Discount variety stores
http://biz.yahoo.com/p/k/kmrt.html
After Hours: $78.15
STATUS: Double bottom. Surged since March as it has found new life after bankruptcy. The past 7 weeks it has turned volatile, but has etched out a double bottom pattern over the 50 day EMA (68.42), using that level as support for the two legs. Quite volatile at this point, but volume has surged tremendously the past three sessions. Strong money flow leading higher, and we are looking at a quick trade on this one, using options to leverage our gain.
Volume: 10.279M Avg Volume: 2.373M
BUY POINT: $79.42 Volume=3.6M Target=$88.88 Stop=$77.85
POSITION: KTQ LP - Dec. $80c (53 delta)
http://www.investmenthouse.com/ci/kmrt.html

Good Investing!
Jon L. Johnson and your IH Alerts Team

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 in 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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