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Begin part 3 of 3

THE PLAYS

Good movers: CHRW; CHS; FORM; GS; HOLX; PWAV; STT

Monday night play results:
FSL: Still looks solid, ready to make the move.
GS: Nice intraday test and rebound.
WIRE: Solid move higher.
NDE: Rebounded from the breakdown point.
CHS: Strong break higher
TYC: Still churning along below the 10 day EMA.

New Plays:

Upside:

Play Date: 02/14/2006
IWM (Ishares Russell 2000--$71.53; +0.82; optionable): Russell 2000 ETF (small caps)
http://biz.yahoo.com/p/i/iwm.html
After Hours: $71.51
STATUS: Test 50 day EMA. IWM came back to test the 50 day EMA (69.90) this month after a strong run, moving lower the past week on lower and lower volume. Tuesday it tapped at the 50 day EMA for the third session on the low and then rebounded on the strongest volume since the start of the month. It broke out from a 20 week base to start the year, and this is the first test of that move. Looking to play options on this move as that gives us good leverage. A move to the target makes us a 60%ish move.
Volume: 46.126M Avg Volume: 28.861M
BUY POINT: $71.83 Volume=32M Target=$75.35 Stop=$69.77
POSITION: DIW ES - May $71c (61 delta)
http://www.investmenthouse.com/ci/iwm.html

Play Date: 02/14/2006
MRVL (Marvell Technology--$64.25; +0.92; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/m/mrvl.html
After Hours: $64.03
STATUS: Test 50 day EMA. MRVL tumbled hard Monday and we said we would look at it at the 50 day EMA (62.13). It made that level fast, trading through it on the Tuesday low (61.41). That stopped the decline and MRVL rebounded to close with a gain on even stronger volume. That shows buyers stepping back in at this level to pick up shares of this market leader. Looking for a further move higher on volume to start new positions ahead of a potential split announcement on 2-23.
Volume: 8.508M Avg Volume: 4.695M
BUY POINT: $65.35 Volume=7M Target=$75.75 Stop=$62.05
POSITION: UVM EM - May $65c (51 delta) &/or Stock
http://www.investmenthouse.com/ci/mrvl.html

Downside:

Play Date: 02/14/2006
KMP (Kinder Morgan Energy Partners--$47.12; -0.47; optionable): Oil and gas pipelines
http://biz.yahoo.com/p/k/kmp.html
STATUS: Put. KMP peaked in August, moved in a range and then fell hard through the 200 day SMA (50.36). It worked in a lateral range from 48 to 50 through the end of January, tried to bottom and move higher in early February, but Tuesday it tanked through the bottom of the range on a strong shot of volume. Money flow is diving lower and KMP is ready to make another serious drop. Our initial target is not much lower; we can get a nice 43% gain on that move. If it continues lower we will let it work for us.
Volume: 695.6K Avg Volume: 334.546K
BUY POINT: $46.95 Volume=335K Target=$45.92 Stop=$47.21
POSITION: KMP OW - Mar. $47.50p (-54 delta)
http://www.investmenthouse.com/ci/kmp.html

New buy point on current position:

Play Date: 02/14/2006
IMGC (Intermagnetics General--$44.44; -0.23; optionable): Industrial electrical components. Splits 3:2 on 2-22-06
http://biz.yahoo.com/p/i/imgc.html
STATUS: Flying plateau. IMGC has put in a good move for us with its strong early February run. It has turned to a lateral move the past four sessions to consolidate that gain, moving in a tight range on low, below average volume. It might wait until the 10 day EMA (43.38) rises to meet it; that often sends a stock in this pattern on its next leg higher. Want to be ready, however, as IMGC held up very well in the recent selling and indeed rallied when the market started down early in the month.
Volume: 251.908K Avg Volume: 315.613K
BUY POINT: $45.05 Volume=400K Target=$51.95 Stop=$43.22
POSITION: IMG GI - July $45c (50 delta) &/or Stock
http://www.investmenthouse.com/ci/imgc.html

Play Date: 02/14/2006
WFR (Memc Electronic--$30.78; +0.26; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/w/wfr.html
After Hours: $30.90
STATUS: Flying plateau. Another strong leader that rallied in January, breaking out from a 13 week cup with handle base. It moved higher to start February as the overall market sold, then slipped into the current 1.5 week lateral move. The 10 day EMA (29.88) has now come up to meet the stock, and volume jumped Tuesday as it remained in the tight range. That indicates it is ready to make the move higher. Looking for the break higher on continued strong volume. Solid.
Volume: 4.234M Avg Volume: 2.74M
BUY POINT: $31.12 Volume=3.2M Target=$36.97 Stop=$29.76
POSITION: WFR GF - July $30c (57 delta) &/or Stock
http://www.investmenthouse.com/ci/wfr.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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