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Begin part 3 of 3

THE PLAYS

Good movers Tuesday: GISX; LRW; TYC; CMTL; STN

Monday night play results:
AVN: Still solid in the pattern, but volume was lower as it moved toward the breakout.
ELBO: Moved higher but volume was below average.
VSAT: Another nice pullback on low volume, still in the nice test.
ENER: Weak test of the 50 day EMA. Now it looks ready.

New Plays:

Upside:

Play Date: 12/21/2004
CVNS (Covansys--$13.52; +0.56; no options): IT Software
http://biz.yahoo.com/p/c/cvns.html
STATUS: Cup w/handle. A very nice 8 month base has formed, the first base after CVNS moved off its all-time low hit at the market bottom in late 2002. The stock made a big double bottom off that low and rallied into this year when it slipped into the current base. It needed a rest, and this ahs been a good base for it. Accumulation is a strong 9 to 5 (9 up price weeks on rising volume to 5 down price weeks on rising volume) setting up the next breakout and run. Tuesday CVNS moved off of the 18 day EMA (13.11), the support for the handle, but volume did not rally with it. Money flow is well ahead of price; looking for CVNS to follow it higher, but need to see breakout quality volume as it makes the move.
Volume: 63.727K Avg Volume: 98.681K
BUY POINT: $14.06 Volume=155K Target=$16.92 Stop=$13.11
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/cvns.html

Play Date: 12/21/2004
GSIC (GSI Commerce--$15.91; +0.51; optionable): e-commerce platforms
http://biz.yahoo.com/p/g/gsic.html
STATUS: Breakout test. GSIC blasted out of a 13 month base in late November, rocketing higher on strong volume. Accumulation in the base is a strong 17 to 9, setting up the foundation for the breakout. The past three weeks it has been testing the breakout, coming back to the 10 day EMA (15.49). Volume surged Tuesday as GSIC moved off the 10 day. Strong money flow is leading higher and we are ready to move in as it continues the resumption of the move on stronger volume.
Volume: 437.5K Avg Volume: 145K
BUY POINT: $16.12 Volume=218K Target=$19.35 Stop=$15.38
POSITION: UGF DC - Apr. $15c (58 delta) &/or Stock
http://www.investmenthouse.com/cd/gsic.html

Play Date: 12/21/2004
VCLK (Valueclick--$13.00; +0.85; optionable): Internet advertising agency
http://biz.yahoo.com/p/v/vclk.html
After Hours: $13.01
STATUS: Breakout test. Tuesday VCLK surged back from its test of the late November breakout from its 8 month reverse head and shoulders base. Accumulation in the pattern is excellent at 10 to 2, setting up the breakout as it shows a lot of net buyers ready to hold the stock longer term. It make the strong volume breakout and has come back to fully test that move. Tuesday volume was up to average as it started to rebound, indicating that buyers were moving back in. The first breakout test is one of our favorite entry points. Looking for more volume as it continues the rebound.
Volume: 1.418M Avg Volume: 1.368M
BUY POINT: $13.38 Volume=1.6M Target=$16 Stop=$12.48
POSITION: QCS CV - Mar. $12.50c (60 delta) &/or Stock
http://www.investmenthouse.com/cd/vclk.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

QCOM: Volume was higher as QCOM moved toward the breakout from the 9 week base. After hours it was trading above the buy point. Ready to move in on a continued volume move Wednesday.

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:

TSCO: After a 3 year run TSCO ran out of gas and slipped into the current 14 month base. It has made a series of lower lows and lower highs until the last move when it managed a higher low. Still has not made a higher high yet, and it needs to do that to change the character of the move. The 200 day SMA (36.82) is just about where it needs to break through.

VRSN: Testing the 18 day EMA after a strong run the past 3 months. Nice doji Tuesday and looks ready for another run. It is somewhat extended after a 16 point run.

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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