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Begin part 3 of 3

THE PLAYS

Good movers Thursday: AVO; CRZO; FLR; IMAX; MEE; MSTR; ORCH; RSCR; USU; ACS; BRCM

Wednesday night play results:
DRL: Low volume as it held steady. Still ready to fall.
PRFT: Not doing it. Fell through the 18 day EMA on rising volume.
PLMD: Edged higher on solid trade but no breakaway move.

New Plays:

Upside:

Play Date: 02/03/2005
ASTM (Aastrom Biosciences--$3.68; +0.03; no options): Medical labs dealing w/stem cell research
http://biz.yahoo.com/p/a/astm.html
After Hours: $3.62
STATUS: Test breakout. ASTM made us some move recently, and now it looks to be setting up to do it again. It exploded higher in January running from roughly 1.50 to 4. It has come back to test that move, tapping and holding the 18 day EMA (3.14) in late January and bouncing. This month it peaked near 3.75 and has moved laterally over the 10 day EMA (3.42) on lower and lower volume. It may take a couple more sessions of lateral work to set up, but we want to be ready when we see the stock jump higher on a good shot of volume. Strong money flow and relative strength holding up as the stock made this test.
Volume: 12.954M Avg Volume: 7.366M
BUY POINT: $3.81 Volume=18M Target=$4.75 Stop=$3.54
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/astm.html

Play Date: 02/03/2005
HTRN (Heatlhtronics Surgical--$11.09; +0.91; optionable): Medical appliances
http://biz.yahoo.com/p/h/htrn.html
After Hours: $11.10
STATUS: Cup w/handle. We have been watching HTRN for a few weeks as it set up for a break higher from the handle of its 19 month base. Thursday it shot higher on excellent volume, starting the breakout from the base. Strong 26 to 11 accumulation (26 up price weeks on rising volume to 11 down price weeks on rising volume) shows a lot of buying during the base. Excellent money flow as well.
Volume: 662.199K Avg Volume: 173.818K
BUY POINT: $11.27 Volume=350K Target=$13.54 Stop=$10.48
POSITION: PHO FB - June $10c (74 delta) &/or Stock
http://www.investmenthouse.com/cd/htrn.html

Play Date: 02/03/2005
TV (Grupo Televisa--$61.25; -0.08; optionable): Broadcast TV
http://biz.yahoo.com/p/t/tv.html
STATUS: Cup w/handle. TV is just starting to form a handle to its 9 week base that has formed using the 50 day EMA (58.53) as support. That is an important institutional support level and shows the big money accumulating shares at that level. A breakout will take it to a multiyear high and close to an all-time high. Strong money flow and positive accumulation are setting the stage for the breakout move.
Volume: 217.4K Avg Volume: 386K
BUY POINT: $62.07 Volume=625K Target=$69.75 Stop=$60.78
POSITION: TV GL - July $60c (64 delta) &/or Stock
http://www.investmenthouse.com/cd/tv.html

Continuing that look ready:

Play Date: 01/20/2005
AVO (Advanced Medical Optics--$43.73; +1.53; optionable): Medical instruments
http://biz.yahoo.com/p/a/avo.html
STATUS: AVO is ready for another break higher. It has bounced back over the 50 day EMA (41.21) on volume, moved laterally over that level for a couple of weeks, and then showed another big volume move Thursday as the stock posted a nice gain. Ready to make the break higher.
Volume: 1.664M Avg Volume: 801.227K
BUY POINT: New: 44.11 (orig. positions: $43.01) Volume=1.2M Target=$49.98 Stop=$41.05
POSITION: AVO DH - July $40c (64 delta) &/or Stock
http://www.investmenthouse.com/cd/avo.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: So much for holding the 200 day SMA.

COH: Has set up a small double bottom with handle over the 50 day EMA to consolidate the nice breakout run from late October. Strong stocks do this: breakout, rally up the 18 day EMA, then come back to test the 50 day EMA to set up the next rally. Needs a break over 57 on volume.

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:

ACF: Working mostly laterally the past month though got a bit wild mid-January.

Downside:

MKC: Tanked below the 50 day EMA in late January and has rebounded to test that move on lower and lower volume. Gapped over the 50 day Thursday but could not hold the move.

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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