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Begin part 3 of 3

THE PLAYS

Weekend play results:
CHRS: Gapped higher but could not hold the move, fading to the 10 day EMA on low volume.
LPSN: Rallied hard early but gave the move back to close flat.
SIRF: Fading to the 18 day EMA (27.75) on stronger, above average volume.
SCUR: Eased back to the 10 day EMA on low trade.

New Plays:

Upside:

Play Date: 12/05/2005
ADTN (Adtran--$31.41; +0.89; optionable): Telecom equipment
http://biz.yahoo.com/p/a/adtn.html
After Hours: $31.50
STATUS: Double bottom w/handle. ADTN is stretching laterally over the 50 day EMA (29.85), forming the handle to its 9 week base. Volume jumped back above average Monday as ADTN moved higher off the 50 day, heading toward a breakout from this short but nice base. Positive accumulation is setting up the breakout; want to see continued strong trade as ADTN moves through the buy point. Very good volume the last four sessions as ADTN held the 50 day EMA and started higher. Looks ready to make its move. Solid pattern, solid fundamentals to match.
Volume: 1.372M Avg Volume: 1.194M
BUY POINT: $31.75 Volume=1.4M Target=$37.65 Stop=$30.22
POSITION: RQA EF - May $30c (65 delta) &/or Stock
http://www.investmenthouse.com/cd/adtn.html

Play Date: 12/05/2005
ALO (Alpharma--$28.03; +1.27; optionable): Drugs (specialty generics for humans and animals)
http://biz.yahoo.com/p/a/alo.html
STATUS: Cup w/handle. Making the breakout on strong volume from its shallow 13 week base that formed using the 50 day EMA (25.51). Strong 4 to 1 accumulation (4 up price weeks on rising volume to 1 down price weeks on rising volume) shows a lot of buying, setting up the breakout move. Money flow is surging higher ahead of price. Relative strength is ready to breakout; when it does that is a good corroboration of the price breakout. This current pattern is part of a much larger 5 year double bottom with handle. Very nicely set up to give us a good run higher.
Volume: 1.033M Avg Volume: 639.897K
BUY POINT: $28.34 Volume=800K Target=$33.97 Stop=$26.55
POSITION: ALO CE - Mar. $25c (69 delta) &/or Stock
http://www.investmenthouse.com/cd/alo.html

Play Date: 12/05/2005
HUM (Humana--$48.46; +0.33; optionable): Health benefits (insurance)
http://biz.yahoo.com/p/h/hum.html
STATUS: Cup. HUM broke higher Thursday from the 50 day EMA (45.49), continuing the formation of its 13 week cup base. Not much volume last week as HUM moved off the 50 day, but it picked up Monday, approaching average on the move. Solid 3 to 1 accumulation gives it a good base to move higher from. Strong fundamentals and technical pattern are a great combination. Ready for a breakout to a new all-time high. Want to see that volume kick in as it continues higher.
Volume: 1.453M Avg Volume: 1.51M
BUY POINT: $48.69 Volume=2.3M Target=$55.99 Stop=$36.98
POSITION: HUM EJ - May $50c (55 delta) &/or Stock
http://www.investmenthouse.com/cd/hum.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: Stalling out a bit but still in the very strong uptrend over the 10 day EMA (69.05).

BR: Gapped higher but gave most of the move back as volume remained below average. Still trying to set up for the next move to continue the double bottom base.

NVDA: Hanging onto the 18 day EMA by its teeth. Volume remained well below average so no heavy selling Monday as NVDA tries to recover from the downgrade.

STN: Continues to trade all over the map, sliding through the 200 day SMA Monday. Lower volume but still average after the high volume Friday selling. Needs to bounce here.

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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