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Begin part 3 of 3
THE PLAYS
Good movers: ABAX; ECOL; MGI; MINI; NVDA; PARL; TKS
Wednesday night play results:
ECOL: Nice break higher from the handle.
INFA: Volume edged higher. Looks ready.
KOMG: Looking good but needs some more volume.
TKC: Strong run higher.
New Plays:
Upside:
Play Date: 02/16/2006
LUK (Leucadia National--$52.44; +0.44; optionable): Telecom services, healthcare services, real estate, wineries
http://biz.yahoo.com/p/l/luk.html
STATUS: 18 day EMA test. A jack of all trades, LUK broke out from a big 10 month base in November, and then formed an 8 week cup with handle that broke out in late January. It rallied to 54 on that move and has faded back tot eh 18 day EMA (52) to test the breakout during the market selling. Nice volume Thursday as it held the 18 day and then rallied. Looking for it to clear the 10 day EMA (52.50) on strong volume to start the play.
Volume: 466.9K Avg Volume: 271.275K
BUY POINT: $52.69 Volume=350K Target=$59.75 Stop=$51.75
POSITION: LUK FJ - June $50c (62 delta) &/or Stock
http://www.investmenthouse.com/cd/luk.html
Play Date: 02/16/2006
MRGE (Merge Technologies--$27.03; +0.65; optionable): Healthcare information
http://biz.yahoo.com/p/m/mrge.html
STATUS: Double bottom w/handle. Strong volume jump Thursday after lying dormant for 8 weeks as MRGE moves toward the breakout from its 10 week base. Solid 3 to 0 accumulation (3 up price weeks on rising volume to 0 down price weeks on rising volume) shows solid buying to set up the breakout. Formed over the 50 day EMA (25.72), an important support level. Ready for a new all-time high.
Volume: 702.656K Avg Volume: 519.55K
BUY POINT: $27.58 Volume=750K Target=$33 Stop=$25.95
POSITION: MQP FE - June $25c (68 delta) &/or Stock
http://www.investmenthouse.com/cd/mrge.html
Continuing plays ready to move:
Play Date: 02/11/2006
CNQR (Concur Technologies--$16.99; -0.03; optionable): Technical and system software
http://biz.yahoo.com/p/c/cnqr.html
After Hours: $16.93
STATUS: Flying plateau. Stronger volume Wednesday as CNQR moved toward the breakout from its 4 week lateral pattern. Strong money flow is leading higher and CNQR tried to follow it Thursday but closed flat after rallying to 17.50. Looking for a continued move with a return of the strong volume. Solid market leader.
Volume: 280.408K Avg Volume: 293.925K
BUY POINT: $16.88 Volume=415K Target=$20.38 Stop=$15.88
POSITION: JCQ HC - Aug. $15c (72 delta) &/or Stock
http://www.investmenthouse.com/cd/cnqr.html
Play Date: 02/11/2006
GME (Gamestop--$41.7; +1.07; optionable): Electronic games stores
http://biz.yahoo.com/p/g/gme.html
After Hours: $41.71
STATUS: Breakout test. Just looking for some more volume here as GME tapped the 18 day EMA (40.37) on the low and rebounded to post a solid gain. Looks ready. To recap: GME broke higher in January out of a 7 month base that formed after a strong run the first half of 2005. This base has allowed it to consolidate that move and set up for the next run. The mid-January breakout took GME to 43.50 on the run and then it made a nice, orderly and low volume pullback to test that move last week, holding the 18 day. In short, it used the selling to test the move, but there was no dumping the stock as volume was quite low. Strong money flow continues to lead higher. Relative strength broke out on the move, a very bullish indication. Looking for a bounce off this near support on a good return of volume to enter the play.
Volume: 976.2K Avg Volume: 1.697M
BUY POINT: New: $42.05 (orig. $41.11) Volume=2M Target=$48.95 Stop=$39.89
POSITION: GME GH - July $40c (53 delta) &/or Stock
http://www.investmenthouse.com/cd/gme.html
Play Date: 02/08/2006
PSSI (PSS World Medical--$17.67; +0.08; optionable): Medical equipment
http://biz.yahoo.com/p/p/pssi.html
STATUS: 18 day EMA test. Low volume continued as PSSI shows a tight doji over the 10 day EMA (17.46), continuing the test of the strong late January breakout move. Very nice orderly action in February despite the market selling. PSSI has set up the move, showing solid upside volume on the Tuesday gain. Looking for that volume to return but stronger as it makes the next move.
Volume: 177.184K Avg Volume: 520.932K
BUY POINT: $17.89 Volume=781K Target=$21.47 Stop=$16.95
POSITION: QYP EW - May $17.50c (53 delta) &/or Stock
http://www.investmenthouse.com/cd/pssi.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, BRCM, CELG, COH, FFIV, GME, MRVL, NVDA, PSYS, UNH
BRCM: Splits next week (2-22). Huge gap higher in late January on strong earnings and the split announcement. Tested the 18 day EMA this week and started higher Thursday with the pre-split run.
FFIV: Testing the 50 day EMA after a breakout to start the year. Needs some strong volume as it continues higher through the 10 and 18 day EMA (61.66) to give us an entry point.
NVDA: Made the break higher Thursday.
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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