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Begin part 3 of 3

THE PLAYS

Good movers Friday: ALXN; FLR; HTCH; IMAX; MSTR; NVDA; PARL; PMTI; USU

Thursday night play results:
ASTM: Still a nice, low volume, tight test of the 10 day EMA.
HTRN: Gapped higher but no volume to carry the move and it came back.
TV: Ready to make the next move.
AVO: Moved up but no real volume with it.

New Plays:

Upside:

Play Date: 02/05/2005
BWLD (Buffalo Wild Wings--$38.69; -0.21; no options): Chicken wing restaurants
http://biz.yahoo.com/p/b/bwld.html
STATUS: Test 18 day EMA. It isn't gourmet, but these are very popular restaurants. BWLD was a new issue in late 2003. It formed its first base April to December, breaking out but then selling back in the early 2005 selling. It recovered and continued the breakout with a strong move. It has come back the past week to test on much lower, below average volume, holding the 18 day EMA (38.56) Friday and showing a nice hammer doji. That often indicates the pullback is over, and we are looking for BWLD to rebound from here on volume.
Volume: 64.813K Avg Volume: 107.636K
BUY POINT: $39.28 Volume=161K Target=$45.45 Stop=$38.39
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/bwld.html

Play Date: 02/05/2005
CPKI (California Pizza Kitchen--$26; +0.79; optionable): Stone oven pizza restaurants
http://biz.yahoo.com/p/c/cpki.html
STATUS: Double bottom w/handle. Has formed a nice 9 week base roughly using the 50 day EMA (24.11 as support; a key institutional level where big money steps in to buy some shares of their favorite stocks. If they don't, that is a problem for the stock. Nice 4 to 2 accumulation in the pattern (4 up price weeks on rising volume to 2 down price weeks on rising volume) shows net buyers during the pattern and sets up the breakout. Strong money flow is surging higher again and relative strength is ready for the breakout. Strong volume Friday after CPKI reported nice earnings Thursday after the close. It gapped lower but rebounded on that strong trade. Looking for that shakeout to continue the break higher.
Volume: 490.013K Avg Volume: 190.045K
BUY POINT: $26.22 Volume=285K Target=$31.45 Stop=$24.77
POSITION: CUH GE - July $25c (68 delta) &/or Stock
http://www.investmenthouse.com/cd/cpki.html

Play Date: 02/05/2005
KYPH (Kyphon--$28.47; +1.47; optionable): Medical instruments
http://biz.yahoo.com/p/k/kyph.html
After Hours: $28.25
STATUS: Flat base. KYPH has started to make an important move in its 12 month base. Volume has shown two big spikes the past two weeks as KYPH posted solid gains. It has approached the top of its range and this time money flow is racing higher ahead of the stock price. With the solid 11 to 8 accumulation in the pattern we anticipate the stock will continue to follow the money higher this week. Looking to enter positions on a further solid volume move and then add on a successful test.
Volume: 1.252M Avg Volume: 462.59K
BUY POINT: $28.78 Volume=694K Target=$34 Stop=$27.32
POSITION: QYQ FE - June $25c (80 delta) &/or Stock
http://www.investmenthouse.com/cd/kyph.html

Play Date: 02/05/2005
MYGN (Myriad Genetics--$25.47; +0.76; optionable): Diagnostic substances
http://biz.yahoo.com/p/m/mygn.html
STATUS: Test 18 day EMA. MYGN broke out in early December from a 7.5 month cup with handle base and has rallied up the 18 day EMA (24.59). It is making its second test of the breakout move starting higher Friday on rising though still below average volume. Strong stocks make 4 to 5 such bounces off of their 18 day after the breakout before needing to test back a bit more to the 50 day EMA and take a bit deeper breath. That leaves MYGN with plenty of upside remaining on this move. Looking to move in as it rallied on strong volume. Need to see that strong trade as MYGN moves through the buy point. If the volume does not jump higher then we wait for a clear breakout over the mid-December resistance at 26.
Volume: 613.781K Avg Volume: 507.545K
BUY POINT: $25.72 Volume=761K Target=$30.25 Stop=$24.47
POSITION: GSQ EE - May $25c (60 delta) &/or Stock
http://www.investmenthouse.com/cd/mygn.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

EBAY, JNPR and MSFT have fallen and cannot get up; we exited positions quite some time back. Need some replacements for them so give us your suggestions.

COH: Still setting up the handle to its small double bottom with handle that is testing the strong breakout and run from October to December.

EASI: Needs to clear 60 with some real authority, i.e. a clean break and lots of volume.

HDWR: Still working on the nice handle to its 11 week base.

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:

PSYS: Nice breakout on Thursday from a 7 week flat base that consolidated the early November breakout. Showed a doji Friday as the market rallied, somewhat curious action. Looks very solid if it holds this level and continues higher.

EYE: Have been watching this one and it moves higher out of a handle to a long 13 month base, but there was no volume on the move. Good money flow. Something about this one has not done it for us yet.

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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