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Begin part 3 of 3

THE PLAYS

Good Movers: CCJ; CMTL; CRXL; DO; FRK; GLBL; GPN; INGR; MNTA; RMD; VCLK; CFC

Weekend play results:

AQNT: Doji on low volume. Still in position to break higher.
CELL: Jumped higher but not enough volume
CMTL: Gapped higher on solid trade.
MNTA: Strong volume move higher.
VCLK: Very nice move higher.
UNH: Gapped higher but could not go anywhere.

Upside:

Play Date: 09/26/2005
ESV (Ensco Intl.--$43.68; +2.22; optionable): Oil and gas service and drilling company
http://biz.yahoo.com/p/e/esv.html
STATUS: Double bottom w/handle. ESV surged higher Monday on strong trade, breaking higher out of an 8 week base that formed above the 50 day EMA (39.60). This acted as the consolidation of a larger 5 month reverse head and shoulders. Solid 3 to 0 accumulation in the recent base and 8 to 5 accumulation overall. Strong pattern with money flow leading higher. Relative strength broke out as well, a good corroboration of the breakout move. Ready to entery on a further run higher.
Volume: 3.638M Avg Volume: 2.242M
BUY POINT: $43.91 Volume=2.2M Target=$51.88 Stop=$41.35
POSITION: ESV CI - Mar. $45c (53 delta) &/or Stock
http://www.investmenthouse.com/ci/esv.html

Play Date: 09/26/2005
PAAS (Pan American Silver--$18; +1.06; optionable): Silver
http://biz.yahoo.com/p/p/paas.html
After Hours: $18.01
STATUS: Reverse head and shoulders. Volume exploded Monday as PAAS surged toward the breakout from its 11 month base sporting strong 11 to 6 accumulation (11 up price weeks on rising volume to 6 down price weeks on rising volume). PAAS has not done much the past 18 months, but this pattern has set up the breakout for a run higher as precious metals rise in demand as an inflation hedge. Strong move Monday, and ready to initiate positions on a further move higher from here.
Volume: 1.804M Avg Volume: 674.82K
BUY POINT: $18.12 Volume=850K Target=$21.65 Stop=$17.05
POSITION: USP AW - Jan. $17.50c (54 deltaP &/or Stock
http://www.investmenthouse.com/ci/paas.html

Play Date: 09/26/2005
VLO (Valero Energy--$113.04; +2.27; optionable): Oil and gas refining
http://biz.yahoo.com/p/v/vlo.html
After Hours: $113.05
STATUS: Flying plateau. After surging in late August on the Katrina impact VLO has moved laterally above the 18 day EMA (108.19) the past three weeks. This has been an impressive run since the early July breakout, but the stock really exploded on the Katrina news. This lateral move is acting to consolidate that break higher but the stock is so strong it is not giving back any ground. Accumulation is continuing as it works laterally (2 up price weeks on rising volume to 0 down price weeks on rising volume) and money flow has turned higher ahead of the price once more. We are looking for VLO to follow that money higher.
Volume: 9.592M Avg Volume: 8.29M
BUY POINT: $113.72 Volume=12M Target=$129.95 Stop=$108
POSITION: VLO AC - Jan. $115c (52 delta) &/or Stock
http://www.investmenthouse.com/ci/vlo.html

Downside:

Play Date: 09/26/2005
RTH (Retail Holders Trust--$92.09; -0.04; optionable)
http://biz.yahoo.com/p/r/rth.html
STATUS: Put. The consumer has weakened as we saw even before Katrina spiked gasoline prices higher and put a further crimp on the ability to continue spending. Indeed, the RTH index peaked in late July and has sold since. This is the second time it has come up for air during this drive lower. The past week it rebounded, making only the 10 day EMA (93.01) on this move. Money flow is weak. After gapping higher Monday on renewed hope after Rita RTH rolled back over. Looking to move in as RTH continues lower. A move to the target lands us a 46%ish gain.
Volume: 6.25M Avg Volume: 3.03M
BUY POINT: $91.88 Volume=4.5M Target=$89.35 Stop=$92.38
POSITION: RTH WR - Nov. $90p (-35 delta)
http://www.investmenthouse.com/cs/rth.html

Play Date: 09/26/2005
SONC (Sonic Corp.--$28.83; +0.17; optionable): Burger joints
http://biz.yahoo.com/p/s/sonc.html
STATUS: Put. Consumer related stocks continue to struggle. SONC peaked in March, tried to form a base through the end of August, but then buckled and slumped lower on strong volume to start this month. It rallied to mid-month on overall low volume and then failed at the 18 day EMA (29.30). SONC collapsed lower last week and then rebounded to end the week. Monday it rallied above the 18 day EMA but could not hold the move, closing just below the 10 day EMA (28.93), showing a doji on very low volume. Looks as if it has run out of steam on this rebound and is ready to continue the slump lower. Ready to move in on a further drop. A move to the target lands us a 42% gain.
Volume: 512.366K Avg Volume: 535.667K
BUY POINT: $28.72 Volume=700K Target=$27.18 Stop=$28.15
POSITION: ZSQ WF - Nov. $30p (-57 delta)
http://www.investmenthouse.com/ci/sonc.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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