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Begin part 3 of 3

THE PLAYS

Good movers Thursday: ENER; SBAC; VRSN; WIND; WIMGI

Wednesday night play results:
ALDN: Still in a very nice handle to its solid base.
ALVR: Took a breather on low volume. Still looks ready to continue the breakout.
CVNS: Also working on a very nice handle to its base.

New plays for Friday:

Upside:

Play Date: 10/14/2004
IDNX (Identix--$6.96; +0.47; optionable): Business software and services
http://biz.yahoo.com/p/i/idnx.html
After Hours: $6.89
STATUS: Reverse head and shoulders. Kind of a ragged 26 week pattern, but moving well up the right side of the base with money flow surging higher ahead of the price. Positive accumulation in the pattern shows net buyers. Combined with the money flow that is a strong combination. Volume was up Thursday as IDNX started higher off the 18 day EMA (6.54). Looking for the stock to clear the early September highs on solid trade to enter.
Earnings: 10-28
Volume: 1.678M Avg Volume: 1.025M
BUY POINT: $7.22 Volume=1.5M Target=$8.62 Stop=$6.89
POSITION: IDX CU - Mar. $7.50c (48 delta) &/or Stock
http://www.investmenthouse.com/cd/idnx.html

Play Date: 10/14/2004
MRVC (MRV Communications--$3.10; +0.31; no options): Semiconductor integrated circuits
http://biz.yahoo.com/p/m/mrvc.html
After Hours: $3.08
STATUS: Cup. Volume is surging the past three weeks as MRVC surges off the lows of its 9 month base. It cleared the 200 day SMA (3.01) on the Thursday close on massive trade. Money flow is surging higher ahead of price, looking ready to lead the price higher. Accumulation is excellent at 10 to 5, setting a solid foundation for the run higher, and a very good reading at this stage of the base. Can give us a great return without having to clear the high in the base.
Earnings: 10-21
Volume: 3.222M Avg Volume: 721.681K
BUY POINT: $3.21 Volume=1.1M Target=$4.55 Stop=$2.99
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/mrvc.html

Play Date: 10/14/2004
PER (Perot Systems--$15.63; +0.12; optionable): ITS software
http://biz.yahoo.com/p/p/per.html
STATUS: Breakout test. PER exploded out of a 9 month cup with handle base the last week of September, rallying a solid 4 points on the breakout move. Volume was outstanding. It peaked in early October and has come back on lower volume to test the 18 day EMA (15.40), a typical near support level were a stock tests its breakout move. Solid 8 to 6 accumulation in the base and tremendous money flow. Nice test and now it looks ready to continue the breakout move.
Earnings: 11-2
Volume: 351.1K Avg Volume: 360.136K
BUY POINT: $15.89 Volume=540K Target=$19 Stop=$15.31
POSITION: PER AC - Jan. $15c (68 delta) &/or Stock
http://www.investmenthouse.com/cd/per.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.

BR, COH, EASI, EBAY, GTRC, HDWR, JNPR, MSFT, QCOM

JNPR: Solid earnings as usual, but down after hours.

HDWR: Good hold Wednesday as volume surged. Above the 50 day EMA and trying to set up for the next 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:

SNMX: New issue in June, it is testing back from its high after a very strong volume surge Tuesday.

Downside:

MBI: Dumping lower again after a hard breakdown last week.

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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