stock ticker, stock recommendation

Begin part 3 of 3

THE PLAYS

Good moves: CCK; EMKR; END; PWR; JAKK; JOSB

Thursday night play results
MOBE: Another nice doji at the 18 day EMA.
WOOF: Another low volume session as WOOF continues to set up.
AMT: Modest gain on low volume. Looks good.
AAPL: Continues the low volume pullback to the 10 day EMA in its breakout test.

New Plays:

Upside:

Play Date: 08/20/2005
MEDX (Medarex--$10.15; +0.06; optionable): Biotechnology
http://biz.yahoo.com/p/m/medx.html
STATUS: Cup w/handle. MEDX is working on a 6 week handle, moving laterally over the 18 day EMA (10.00) as it finishes up a 9 month base sporting solid 8 to 6 accumulation (8 up price weeks on rising volume to 6 down price weeks on rising volume), showing net buying during the base. Ready to break to 3 year high from this nice pattern.
Volume: 520.147K Avg Volume: 889.917K
BUY POINT: $10.58 Volume=1.3M Target=$12.72 Stop=$9.89
POSITION: MWM JB - Jan. $10c (54 delta) &/or Stock
http://www.investmenthouse.com/cd/medx.html

Play Date: 08/20/2005
VTS (Veritas Drilling--$31.69; +0.52; optionable): Oil services company
http://biz.yahoo.com/p/v/vts.html
STATUS: Breakout test. VTS broke out from its 18 week base two weeks back with a strong volume surge. That move took it to a 4 year high. In the selling in the oil sector the past week it faded back to fill the gap while it tested and held the 18 day EMA (31.05). Thus far a very routine test from the breakout. Strong 6 to 3 accumulation in the pattern shows plenty of buying, and that is helping support the stock at near term support on this test. With oil rebounding we are looking for VTS to do the same this week, but we want to see volume back up above average as it makes the move.
Volume: 270K Avg Volume: 480.275K
BUY POINT: $32.05 Volume=675K Target=$37.95 Stop=$30.85
POSITION: VTS AF - Jan. $30c (64 delta) &/or Stock
http://www.investmenthouse.com/cd/vts.html

Play Date: 08/20/2005
WSSI (Websidestory--$16.8; +0.95; no options): On demand web analytics (internet user activity, etc.)
http://biz.yahoo.com/p/w/wssi.html
STATUS: Cup w/handle breakout. This is a new issue, coming public in September 2004. This is its second base after a June breakout rallied it from 11 to 17. It needed a breather and this 6 week base has set up very nicely, holding over the 50 day EMA (14.72) on the base lows. Nice 3 to 1 accumulation shows plenty of buying and money flow is breaking out ahead of price. Relative strength is ready to breakout as well, and when it does that is a good corroboration of the price breakout. Not a household name but a nice pattern and a lot of great gains come from stocks that are relatively unknown by the overall market.
Volume: 441.843K Avg Volume: 219.174K
BUY POINT: $17.04 Volume=300K Target=$20.45 Stop=$15.88
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/wssi.html

Downside:

Play Date: 08/20/2005
JWN (Nordstrom--$33.55; -0.49; optionable): High end department stores
http://biz.yahoo.com/p/j/jwn.html
STATUS: Put. JWN was a leader in retail, and it just reported some strong earnings last week that shot it up on strong volume. Problem is, it gapped down through the 50 day EMA (33.65) the first week of August. It was in the process of tanking further when the earnings came out and bounced it back up to the 50 day SMA (34.63). It turned back down Thursday and Friday, however, and looks ready to continue the move that even boffo earnings. Looking for a break below the 10 day EMA (33.33) on continued strong volume to start the downside position. A move to the target lands us a 45%ish gain.
Volume: 2.584M Avg Volume: 2.301M
BUY POINT: $33.26 Volume=2.8M Target=$31.75 Stop=$34.89
POSITION: JWN VZ - Oct. $32.50p (-39 delta)
http://www.investmenthouse.com/cd/jwn.html

Continuing still ready to move: AAPL; AMT; CTL; NTGR; MOBE; TAGS; KNOT

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.

AAPL, CELG, BLUD, BR, COH, HW, PSYS, RTSX, STN

AAPL: Still ready for the next move higher after this 10 day EMA test.

BR: Bounced back up to the 10 day EMA, but still looks to be in trouble here. The November $65 calls have a 56 delta and are selling for $4. We could sell them and buy them back after a test of the 50 day EMA (61.01).

COH: That doji gave way to a bit of selling Friday. Still looks for a further dip below the 50 day though there is some support at 32. The November $32.50 calls are selling for 2.55 with a 59 delta. A call sell while COH makes this test might be a good idea if you want to hang onto the shares owned at a low cost basis. Then we buy them back when it finds support, likely around 31ish.

HW: Breaking the 50 day on volume, unable to fill the gap.

STN: Unable to recover the 50 day EMA. Some support near 65. Can sell some September or October 65 calls (3.60 and 4.70 respectively) and buy them back if 65 holds as support.

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.

NGS: Oil services company. Broke out from a 3.5 month base in July and then exploded higher in August. It sold back to the 18 day EMA in the recent oil and gas selling, but held that level and rebounded Friday. May have been enough to set up the next leg.

FSTC: Issued in April 2005, FSTC is working on the right side of its first base. Money flow is exploding higher ahead of the stock.

Downside: EFX: After a nice breakout in April, EFX peaked in early July on no volume. It tried to hold the 50 day but failed, crashing lower last week. It made a very weak attempt to rebound, not even making the 10 day EMA. Getting ready to turn back down.

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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