us stock market, top stock pick

Begin part 3 of 3

THE PLAYS

Good movers: ADSK; MPWR; URBN; VCLK; VSEA

Thursday night play results:
TOMO: Gapped higher but volume died off.
TRID: Nope. Gapped lower volume, back to the bottom of the base.
URBN: Solid price move, so-so on the volume, but good enough to start a position.
MPWR: Strong volume as MPWR makes the breakout.

Upside:

Play Date: 10/22/2005
CLDN (Celadon Group--$22.97; +0.19; no options): North American truckload carrier
http://biz.yahoo.com/p/c/cldn.html
STATUS: Cup w/handle. Excellent 9 month base has set up this year after a very strong 2003 and 2004. In short, it needed this base to regroup and set up its next strong run. Tremendous volume surge in mid-October as it announced earnings guidance well above consensus. Earnings are out 10-26, but we like that we already have the preview. Eased back to the 10 day EMA (22.67) last week, and ready to move in as volume jumps back up as CLDN turns back up and breaks out of the pattern.
Volume: 52.003K Avg Volume: 103.489K
BUY POINT: $23.66 Volume=155K Target=$28.45 Stop=$22
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/cldn.html

Play Date: 10/22/2005
ISSX (Internet Security System--$23.96; +1.08; optionable): Internet security software
http://biz.yahoo.com/p/i/issx.html
After Hours: $23.95
STATUS: Cup w/handle. ISSX looks to have started the move toward the breakout from its 11 month base. Volume jumped above average Friday as ISSX came off the 50 day EMA (23.13) and rallied well. Positive accumulation in the long base has set up the breakout. This sector is coming to life, and ISSX is a top rated stock in the market both in fundamentals and in its technical pattern. Looking for a strong volume breakout; relative strength has already broken out ahead of the stock, a very strong bullish indication.
Volume: 697.784K Avg Volume: 579.429K
BUY POINT: $25.05 Volume=869K Target=$28.95 Stop=$23.95
POSITION: ISU AE - Jan. $25c (48 delta) &/or Stock
http://www.investmenthouse.com/cd/issx.html

Play Date: 10/22/2005
WCC (Wesco International--$39.28; +0.03; optionable): Electrical supplies and equipment distribution
http://biz.yahoo.com/p/w/wcc.html
STATUS: Cup w/handle breakout. WCC reported strong earnings Thursday and vaulted higher on big volume breaking out of its 9 month base. Friday it held steady on lower though still strong trade. We are looking for a test back toward 38ish and then a rebound. That is when we will pick it off. If it continues to move higher from here we will take a partial position and then add to it on the test. Excellent 9 to 5 accumulation in the base (9 up price weeks on rising volume to 5 down price weeks on rising volume) and outstanding money flow. Relative strength broke out as well, a good corroboration of the price move. A top rated stock in earnings and technical pattern.
Volume: 1.548M Avg Volume: 593.547K
BUY POINT: $38.55 Volume=890K Target=$45.95 Stop=$36.55
POSITION: WCC AG - Jan. $35c (73 delta) &/or Stock
http://www.investmenthouse.com/cd/wcc.html

Downside:

Play Date: 10/22/2005
IGN (Goldman Sachs Networking ETF--$29.7; -0.08; optionable)
http://biz.yahoo.com/p/i/ign.html
STATUS: Put. Double topped in September and early October and then fell below the 50 day EMA (30.08). It has rebounded the past two weeks but on very low volume, bumping into the 50 day last Thursday and Friday, and starting to roll over. Money flow is diving lower ahead of price; looking for price to follow its lead after this kiss goodbye of the 50 day is over. A move to the target lands us a 41%ish gain.
Volume: 61K Avg Volume: 107.353K
BUY POINT: $29.65 Volume=125K Target=$28.62 Stop=$29.89
POSITION: IGN XF - Dec. $30p (-50 delta)
http://www.investmenthouse.com/cd/ign.html

Continuing ready to move:

Play Date: 10/22/2005
IRIS (Iris Intl.--$21.23; +0.12; optionable): Automated in vitro diagnostics systems
http://biz.yahoo.com/p/i/iris.html
STATUS: Breakout test. Strong move on volume Wednesday and then a low volume lateral move to end the week, holding the gain. This is a test of the breakout from a nice 4 month base in early October. Strong volume move, nice low volume test. Ready to continue the move from this market leader. Strong relative strength is ready for the breakout move as well, a very good indication for a continued upside price move.
Volume: 113.237K Avg Volume: 193.302K
BUY POINT: $21.62 Volume=290K Target=$24.95 Stop=$20.05
POSITION: JGU AD - Jan. $20c (57 delta) &/or Stock
http://www.investmenthouse.com/cd/iris.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

CELG: Nice lateral move over the 50 day EMA the past week after gapping higher to recover that level two Fridays back. As long as it does this it is recovering and building for the next move higher. A break over 52.50 on strong volume is our next entry point.

COH: Close to a trend reversal move to end last week, breaking the downtrend that started in July. Needed some more volume but a good recovery.

UNH: Nice doji right on top of the 10 day EMA on strong volume. Looks ready to continue the move, and a good point to add some positions as it continues higher.

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.

TXN: Meltdown in early October, but then moved laterally the past week showing some excellent volume Wednesday and Thursday as it posted upside sessions. Looks as if it is going to make a bounce here. Has some stiff resistance at 32, however.

SWN: Energy continues to struggle and with oil diving it puts all of the sector in some jeopardy. Nonetheless, SWN continues to hold the 50 day EMA unlike many energy stocks.

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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