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Begin part 3 of 3

THE PLAYS

Good movers: AAPL; IRIS; DRRC; PNRA; SMTS

Tuesday night play results:
PNRA: Continued strong volume as PNRA surges off the 200 day SMA.
VSEA: Stronger volume, looking good as it moves toward the breakout.
DVN: Dove lower on volume but then rebounded to hold support at 60.

Upside:

Play Date: 10/19/2005
DBRN (Dress Barn--$24.92; +0.54; optionable): Apparel stores
http://biz.yahoo.com/p/d/dbrn.html
STATUS: Cup w/handle. DBRN showed a lot of volume in October, but unlike the rest of the market DBRN was not selling on volume but instead rallying and setting up the pattern for the breakout. Solid 4 to 2 accumulation (4 up price weeks on rising volume to 2 down price weeks on rising volume) in the base shows plenty of buying. Strong money flow and relative strength is nearing the breakout as well. Top rated stock in fundamentals and pattern.
Volume: 430.828K Avg Volume: 392.527K
BUY POINT: $25.01 Volume=589K Target=$28.95 Stop=$23.77
POSITION: DTQ CE - Mar. $25c (54 delta) &/or Stock
http://www.investmenthouse.com/cd/dbrn.html

Play Date: 10/19/2005
HLEX (Healthextras--$23; +0.09; optionable): Pharmacy benefit management services
http://biz.yahoo.com/p/h/hlex.html
STATUS: Breakout test. HLEX broke out from a 14 week flat base last week, surging to 23 on the move. This week it made the test, holding above the 10 day EMA (22.16) Tuesday and Wednesday on the intraday lows. Strong money flow is leading higher, and after this nice test we expect HLEX to continue the breakout move soon. Another top rated stock.
Volume: 339.324K Avg Volume: 216.411K
BUY POINT: $23.55 Volume=350K Target=$28.32 Stop=$21.98
POSITION: HUE CX - Mar. $22.50c (64 delta) &/or Stock
http://www.investmenthouse.com/cd/hlex.html

Play Date: 10/19/2005
REDF (Rediff.com--$15.30; +1.24; no options): India internet
http://biz.yahoo.com/p/r/redf.html
STATUS: Test breakout/50 day EMA. Made us some solid money in September, and now REDF is set up to do it again. Broke out from a 15 month double bottom with handle base in late September, surging to 18 on the move. It has spent the recent market selling testing that move, coming back to the 50 day EMA (13.30) to test, holding the breakout as it does. Wednesday REDF tapped the 50 day EMA on the low and jumped higher on rising, average trade. Money flow is leading higher, and we are ready to move into REDF as it continues higher.
Volume: 447.239K Avg Volume: 471.053K
BUY POINT: $15.67 Volume=500K Target=$18.88 Stop=$14.57
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/redf.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.

AAPL, CELG, BR, COH, NVDA, PSYS, RTSX, STN, UNH

AAPL: Strong volume as AAPL makes the break higher from its nice higher low.

CELG: Nice recovery over the 50 day EMA and looks to have stabilized.

COH: Jumping off the 200 day SMA on some rising, above average volume.

PSYS: Nice break higher though volume was so-so.

UNH: Making the break higher on solid trade.

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.

NDAQ: Broke sharply higher in April and rallied steadily up the 18 day EMA. It formed a short lateral base in September and surged higher this month. While not a bad break higher, NDAQ is extended on this run up the 18 day EMA and likely needs a test of the 50 day EMA. Indeed, after a stock rallies up the 18 day EMA, it starts to get a bit wilder in its action as it approaches a peak before it pulls back.

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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