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Begin part 3 of 3

THE PLAYS

New Plays:

Upside:

Play Date: 12/27/2004
EGHT (8x8, Inc.--$4.23; +0.38; no options): Telecom services and technology for IP telephony and video applications
http://biz.yahoo.com/p/e/eght.html
After Hours: $4.17
STATUS: Test breakout. EGHT jumped higher Monday, moving off the 18 day EMA (3.86) on strong volume. This move comes after a three week test of its early December breakout from a 10 week cup with handle base. This is the first base that formed off of the 9 month downtrend below the 50 day EMA (3.55). Accumulation in the pattern is an outstanding 6 to 1 (6 up price weeks on rising volume to 1 down price week on rising volume), showing lots of buyers during the base, setting up the breakout and run higher. Money flow is very strong, moving up again ahead of price after the test. The first test of breakout is one of our favorite entry points as it shows buyers ready to come back in after the initial breakout move.
Volume: 2.459M Avg Volume: 1.735M
BUY POINT: $4.51 Volume=2.5M Target=$5.55 Stop=$4.22
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/eght.html

Play Date: 12/27/2004
SUNW (Sun Microsystems--$5.51; +0.07; optionable): Computer systems, hardware
http://biz.yahoo.com/p/s/sunw.html
After Hours: $5.47
STATUS: Cup w/handle. Volume has jumped the past two sessions despite the lower volume in the market, moving easily above average as SUNW moved off up toward the breakout from the handle to its 11 month base. Excellent 14 to 3 accumulation in the base shows a lot of buyers as the stock consolidated. Strong money flow is moving higher ahead of price. Monday SUNW moved to a breakout but then faded with the market to close basically flat. Despite this aborted breakout attempt we still like the look of the pattern and really like the volume in a low volume market.
Volume: 46.583M Avg Volume: 39.893M
BUY POINT: $5.62 Volume=40M Target=$6.75 Stop=$5.32
POSITION: SUQ DA - Apr. $5c (76 delta) &/or Stock
http://www.investmenthouse.com/cd/sunw.html

Play Date: 12/27/2004
TRA (Terra Industries--$8.91; -0.15; optionable): Nitrogen products for agricultural and industrial markets
http://biz.yahoo.com/p/t/tra.html
STATUS: Breakout test. TRA surged higher two weeks back on strong volume, breaking out of a short 11 week reverse head and shoulders base sporting excellent 5 to 1 accumulation. The base formed over the 50 day EMA (8.18), a very good sign of institutional support for the stock. It broke out in late July from a nice 16 week base, rallied, and entered this base to set up the next move. Nice low volume lateral move testing the 10 day EMA (8.84), the near support level. Looking for some better volume as it holds this level and resumes the breakout move.
Volume: 369.3K Avg Volume: 1.002M
BUY POINT: $9.25 Volume=1M Target=$11.11 Stop=$8.77
POSITION: TRA CU - Mar. $7.50c (88 delta) &/or Stock
http://www.investmenthouse.com/cd/tra.html

Continuing play that looks ready:

Play Date: 12/21/2004
GSIC (GSI Commerce--$15.99; +0.26; optionable): e-commerce platforms
http://biz.yahoo.com/p/g/gsic.html
After Hours: $16.03
STATUS: Breakout test. Volume was up well above average Monday as GSIC tried the breakout but was unable to hold the move into the close. Accumulation in the base is a strong 17 to 9, setting up the foundation for the breakout. It has tested the breakout in December, setting up the next move. Strong money flow is leading higher once again. Relative strength is ready to make the break higher as well.
Volume: 305.523K Avg Volume: 131.545K
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

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: Good sales results estimate for the holidays gapped it out of the lateral move, but it sold back into it by the close.

HDWR: This test of the 50 day EMA and subsequent selling may be all it gets on this bounce.

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:

WEB: Surging on volume once more after a two-day pullback to test last Tuesday's strong blast higher.

INFY: Moving laterally over the 18 day EMA on low volume as the stock continues a 9 week lateral move in something of an ascending base.

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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