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Begin part 3 of 3

THE PLAYS

Good movers Wednesday: AAPL; CYCL; DDDC; GOOG; ILMN; JAH; NCR; NVDA; TTEC; WITS

Tuesday night play results:
ARB: Edged higher on average volume. Not a good enough move.
EFX: Strong volume as it broke higher.
NVDA: Nice gap higher on earnings, tested, and then kept going.
OSI: Still working on the handle on low volume.

New Plays:

Upside:

Play Date: 02/02/2005
CVC (Cablevision Systems--$27.94; +0.41; optionable): Cable television systems
http://biz.yahoo.com/p/c/cvc.html
STATUS: Breakout test. CVC exploded higher in mid-January, blasting out of a 13 month cup with handle base. It rallied to almost 30 and then has tested that move the past two weeks, coming back to and holding the 10 day EMA (27.31) on lower volume, an indication that there were few sellers compared to the buying. Solid 10 to 7 accumulation (10 up price weeks on rising volume to 7 down price weeks on rising volume) in the base set the foundation for the breakout. It has done that and now is setting up to continue that run. Money flow is very strong and running higher ahead of the price. Looking to pick it up as it continues higher from here on stronger volume.
Volume: 1.5M Avg Volume: 1.716M
BUY POINT: $28.07 Volume=2M Target=$33 Stop=$27.19
POSITION: CVC FE - June $25c (79 delta) &/or Stock
http://www.investmenthouse.com/ci/cvc.html

Play Date: 02/02/2005
PRFT (Perficient--$8.14; +0.66; no options): Business software
http://biz.yahoo.com/p/p/prft.html
After Hours: $7.65
STATUS: Breakout test. PRFT blasted higher to start the new year in the second leg of its breakout from a 8 month cup with handle base. After that move PRFT was sucked into the market selling and went down to test the 50 day EMA (6.72) toward the end of January. It held, rebounded, and has made a low volume test of the 18 day EMA. Wednesday PRFT jumped off the 18 day (7.48) on the strongest volume since early January, rallying on above average volume. Excellent money flow is leading to the upside. Ready to move into positions on a further volume move.
Volume: 1.087M Avg Volume: 411.227K
BUY POINT: $8.41 Volume=600K Target=$10.15 Stop=$7.82
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ci/prft.html

Play Date: 02/02/2005
ZQK (Quicksilver--$30.16; +0.52; optionable): Youth sportswear, surfer wear, etc.
http://biz.yahoo.com/p/z/zqk.html
STATUS: Saucer/Flat base. ZQK is working mostly laterally over the 50 day EMA (29.02) for the past 10 weeks, doing so on mostly lower volume. Wednesday it surged higher on the best volume since early January. It looks ready to try a breakout move from that base, following the strong money flow higher. Excellent 4 to 0 accumulation in this pattern is setting the stage for a good move. This stock is a perennial winner and it looks ready to make a new move. It is also approaching the price it likes to split.
Volume: 629.9K Avg Volume: 454.954K
BUY POINT: $30.62 Volume=650K Target=$35.89 Stop=$29.39
POSITION: ZQK EF - May $30c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/zqk.html

Downside:

Play Date: 02/02/2005
DRL (Doral Financial--$43.05; -1.18; optionable): Mortgage investment
http://biz.yahoo.com/p/d/drl.html
STATUS: Put. Did not like the Fed's action, dropping from the 18 day EMA (44.48) test on rising, above average volume. DRL double topped in January and collapsed in the middle of that month. It fell close to the 200 day SMA (40.02) on that drop but then rebounded on lower volume. Money flow is in the toilet, and the stock has been under heavy distribution. Looks ready to start its second leg lower. A move down to the target nabs us a 42%ish gain, and it can get there in a hurry.
Volume: 1.504M Avg Volume: 435.818K
BUY POINT: $42.95 Volume=1M Target=$40.88 Stop=$43.65
POSITION: DRL OI - Mar. $45p (-65 delta)
http://www.investmenthouse.com/ci/drl.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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