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Begin part 3 of 3

THE PLAYS

Good movers Friday: BRCD; CRIS; GYI; TYC

Thursday night play results:
NVDA: Reversed the good Thursday move, still in the pattern but needs to show better action.
TERN: Stalled out at the December high on lower trade. Just took a breather.
VNWK: Still in the pattern after an intraday dip and recovery.

New Plays:

Upside:

Play Date: 12/18/2004
GISX (Global Imaging Systems--$37.65; +0.07; optionable): Office technology solutions
http://biz.yahoo.com/p/g/gisx.html
STATUS: Reverse head and shoulders. Volume jumped back above average to end last week as GISX approached the breakout point from its 8.5 month base. Excellent 9 to 4 accumulation in the base (9 up price weeks on rising volume to 4 down price weeks on rising volume) shows solid net buying and sets up the foundation for the breakout. A nice, well formed accumulation pattern, and a breakout sends it to a new all-time high where there are no disgruntled shareholders ready to dump the stock. Need to see the breakout, however, to know the buyers have won out at the critical point in the base.
Volume: 122.345K Avg Volume: 105.817K
BUY POINT: $38.55 Volume=159K Target=$46 Stop=$36.78
POSITION: QHJ EG - May. $35c (75 delta) &/or Stock
http://www.investmenthouse.com/cd/gisx.html

Play Date: 12/18/2004
HURC (Hurco Cos.--$17.52; -0.47; no options): Scientific & technical instruments
http://biz.yahoo.com/p/h/hurc.html
STATUS: Test 18 December 2004. HURC broke out from a 16 week cup base to start October, a solid base sporting strong 5 to 2 accumulation. This is the second test of the breakout. In November it came back to the 50 day EMA (15.58) on very low volume, and the past three weeks it has moved laterally on very low trade again, holding the 18 day EMA (17.12) on the intraday lows. Solid money flow compliments the good breakout and nice test. Range is narrowing as it gets ready for the next leg higher.
Volume: 74.724K Avg Volume: 159.313K
BUY POINT: $18.65 Volume=215K Target=$22.38 Stop=$17.48
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/hurc.html

Play Date: 12/18/2004
STN (Station Casinos--$55.50; +1.55; optionable): Resorts and casinos
http://biz.yahoo.com/p/s/stn.html
STATUS: 50 day EMA test. Volume jumped Friday as STN moved off the 50 day (53.77) after a nice, low volume pullback that tested the November breakout. A nice 5 month cup with handle base sporting positive accumulation set the stage for the breakout. Money flow has remained strong during this test, starting sharply higher to end the week. Looking for the stock to clear the short term MA (10 and 18 December 2004 at 55.54 and 55.63) to enter positions.
Volume: 1.066M Avg Volume: 511.226K
BUY POINT: $55.78 Volume=675K Target=$66.95 Stop=$53.58
POSITION: STN DK - Apr. $55c (59 delta) &/or Stock
http://www.investmenthouse.com/cd/stn.html

Play Date: 12/18/2004
UCOMA (United Globalcom--$9.40; +0.31; optionable): Cable television systems
http://biz.yahoo.com/p/u/ucoma.html
After Hours: $9.43
STATUS: Cup w/handle breakout. Volume jumped to end the week as UCOMA began the breakout from its 11 month base sporting strong 9 to 4 accumulation. Money flow is running higher ahead of the stock and the price has started to follow. We are looking at a partial position on a further volume move and then will add to positions when the stock makes its test, holds, and starts back up on rising volume. Very nice action and ready to break to a new 3 year high.
Volume: 3.808M Avg Volume: 2.024M
BUY POINT: $9.55 Volume=2.6M Target=$11.48 Stop=$8.88
POSITION: UHZ EB - May $10c (42 delta) &/or Stock
http://www.investmenthouse.com/cd/ucoma.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

COH: Testing the strong break higher, tapping the 10 day EMA on the Friday low before rebounding. This is its third test of the short term MA since its early November breakout. That means it still has more upside to the move, but taking new positions at this stage is a bit riskier as strong stocks usually make 4 or 5 bounces off the 18 day before testing deeper toward the 50 day EMA. In short, letting existing positions run but not taking new ones here. After the next bounce we will look at selling some calls when the stock slows that assent.

EASI: Holding the gap higher though tested deeper Friday before rebounding. Looking for more of a fill of the gap.

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:

IPG: Broke over the 200 day SMA last week on a good 3 day volume surge. The stock is working up the right side of a 12 month cup pattern. Another day or two of rest and then a volume jump higher would be a good looking entry if you like the stock.

CWTR: Just broke higher midweek, clearing a 4 week lateral move. Strong trade on the break higher and now moving laterally, taking a breather. It has been a big run for CWTR this year as it has quadrupled, rallying off short bases just like the last one. It tends to put in $5 moves off of each such base.

INFY: Setting up something of a triangle the past 8 weeks after an August breakout and run higher from an 8 month cup base. A strong volume move through 70 would be a good indication of another leg higher coming.

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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