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Begin part 3 of 3

THE PLAYS

Good movers Friday: CPKI; GRP; NVDA; ORCH; SYD; USU; WITS

Thursday night play results:
NOVA: Volume was up but NOVA could not hold the buy point heading into the close. Still looks solid.
SOV: volume backed off but SOV is still in position to continue the move.
VPI: Continued the move on solid though lower trade.

New Plays:

Upside:

Play Date: 02/12/2005
AIRT (Air T, Inc.--$20.77; +1.47; no options): Air delivery and freight
http://biz.yahoo.com/p/a/airt.html
After Hours: $20.80
STATUS: Test 50 day EMA. AIRT can run like the wind, and it made us some great money last year. A nice breakout and run to end the year required a consolidation. It sold hard and fell below the 200 day SMA (16.39); not the greatest action, but volume was very, very low as it did. It has started to recover and build the right side of its base, first moving back through the 200 day and now the 50 day EMA (17.83). It made the move through that resistance Monday and then came back to test it. Friday it found its feet and jumped off the 50 day EMA on once again strong volume. Money flow is flying higher ahead of price, and it looks as if AIRT is ready to follow it once more.
Volume: 1.966M Avg Volume: 962.045K
BUY POINT: $21.62 Volume=1.2M Target=$27.55 Stop=$20.11
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/airt.html

Play Date: 02/12/2005
CCK (Crown Cork & Seal--$14.80; +0.52; optionable): Packaging and containers
http://biz.yahoo.com/p/c/cck.html
STATUS: Cup w/handle breakout. Volume jumped again Friday as CCK made the breakout from a short but sweet 8 week base. The base formed using the 50 day EMA (13.30) as support, a key point where institutions step in. Accumulation in the short base is a strong 4 to 1 (4 up price weeks on rising volume to 1 down price weeks on rising volume), another indication of big money support. Solid breakout that is following the money flow higher. Relative strength broke out as well, a very good corroboration of the breakout. Looking to start a position on the continued move higher and then pick up additional positions when it tests the breakout and then rebounds.
Volume: 2.597M Avg Volume: 1.049M
BUY POINT: $14.95 Volume=1.2M Target=$17.95 Stop=$14.05
POSITION: CCK GC - July $15c (52 delta) &/or Stock
http://www.investmenthouse.com/cd/cck.html

Play Date: 02/12/2005
LSS (Lone Star Technologies--$40.95; -0.04; optionable): Oil and gas equipment and services
http://biz.yahoo.com/p/l/lss.html
STATUS: Breakout test. LSS broke out from a 14 week cup base in late January. It rallied sharply on solid volume to 43.58 and is now testing that move, coming back to the 10 day EMA (40.77) on lower volume. Thursday and Friday volume jumped back above average as the stock traded in a very tight range, showing two consecutive dojis. Strong 5 to 2 accumulation in the base shows net buyers and set up the breakout. Nice breakout test, and looking for this jump in volume to carry it higher. That would be a successful breakout test and where we move in.
Volume: 907.6K Avg Volume: 510.818K
BUY POINT: $41.62 Volume=950K Target=$48 Stop=$40.62
POSITION: LSS EH - May $40c (60 delta) &/or Stock
http://www.investmenthouse.com/cd/lss.html

Play Date: 02/12/2005
MDRX (Allscripts Healthcare Sol.--$11.67; +0.36; optionable): Software and information systems for physicians
http://biz.yahoo.com/p/m/mdrx.html
After Hours: $11.62
STATUS: Breakout test. MDRX just broke to a new multiyear high this month as it broke out from a 10 month cup with handle base. Very nice base with excellent 11 to 5 accumulation (11 up price weeks on rising volume to 5 down price weeks on rising volume) shows net buyers and sets up the breakout run. It rallied up to 12 on the initial move, and on this test it has held the 10 day EMA (11.14), moving laterally the past week above that level on lower volume. Friday that volume jumped as MDRX did the same off the 10 day EMA. Relative strength made the breakout as well and is ready to do so again, a good corroboration of the breakout.
Volume: 676.807K Avg Volume: 306K
BUY POINT: $11.85 Volume=459K Target=$14.75 Stop=$11.05
POSITION: MXQ FB - June $10c (78 delta) &/or Stock
http://www.investmenthouse.com/cd/mdrx.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, GTRC, HDWR, MSTR, TSRA, UPL

New additions: MSTR, TSRA, UPL

MSTR: Exploded higher in lat January on strong volume as it reported much better than expected earnings. Rallied well but then gapped lower Wednesday on a downgrade. Holding the 18 day EMA and the November and December highs. This is where it should hold and rebound on better trade to show us there is still buy side support for the stock.

TSRA: A chip equipment maker that was a new issue in November 2003. Strong rally in 2004 took it up to 40. It has spent the past 12 weeks working laterally below that level and above the 50 day EMA, forming a reverse head and shoulders base. Strong volume Friday as TSRA started the breakout move. Relative strength breaking out as well. Money flow strong. Looks like aces.

UPL: Independent oil and gas. UPL is making the breakout move from a short 10 week double bottom with handle base that was the tail end of an 18 week trading range. Strong volume the past three sessions as it started the breakout move. Great move as it breaks out to a new high.

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:

CME: This one was a suggestion for the portfolio, and if it can form back up it could be put in. A tremendous rally in 2004 made us a lot of money playing options on it. At $200 per share options are about the only way to go. For now, however, it has formed a 14 week head and shoulders pattern after that strong run. It is trying to hold the 50 day EMA the past 4 weeks but it is in a real fight to follow the market and breakout from forming the right shoulder to that base.

CY: Semiconductor that is rallying well after breaking through the 200 day SMA last week. Strong volume; it has swelled the past 5 weeks. Looks solid.

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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