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Begin part 3 of 3

THE PLAYS

Weekend play results:
BMRN: Low volume pullback to complete the 10 day EMA test.
GPN: Nice doji at the 10 day EMA
ISIL: Could not advance the move further but not a bad 10 day EMA test.
RSTI: Doji after the strong Friday move, testing the 10 day EMA on the low. Not bad.
SIRF: Low volume as it still tests the 18 day EMA.

New Plays:

Upside:

Play Date: 02/21/2006
ADM (Archer Daniels Midland--$31.19; +1.11; optionable): Corn products used for ethanol
http://biz.yahoo.com/p/a/adm.html
STATUS: Flying plateau. ADM broke out from a 12 week flat base in January and rallied to 32. This month it has moved laterally over 30 as the 18 day EMA (30) rose to meet it. Tuesday the President was out and about touting renewable energy, and thus ADM jumped on volume. Money flow is still leading the stock higher. Relative strength looks ready for another breakout. Looking solid and just needs to clear the highs in this pattern for us to start the play.
Volume: 6.584M Avg Volume: 3.708M
BUY POINT: $31.62 Volume=4.2M Target=$37.95 Stop=$29.94
POSITION: ADM FF - June $30c (67 delta) &/or Stock
http://www.investmenthouse.com/ci/adm.html

Play Date: 02/21/2006
RMD (Resmed--$41.41; -0.46; optionable): Medical appliances
http://biz.yahoo.com/p/r/rmd.html
STATUS: Cup w/handle. Low volume the past two weeks as RMD makes the test of the 10 day EMA (41.35), forming the handle to its 13 week base that sets RMD for the breakout to a new all-time high. Positive 3 to 2 accumulation in the base (3 up price weeks on rising volume to 2 down price weeks on rising volume) shows net buying along with strong money flow leading higher ahead of price. Nice test and looking for volume to come back in as RMD makes the break higher. Solid market leader with great fundamentals to go with the pattern.
Volume: 411.2K Avg Volume: 497.727K
BUY POINT: $43.11 Volume=747K Target=$51 Stop=$41
POSITION: RMD GH - July $40c (56 delta) &/or Stock
http://www.investmenthouse.com/ci/rmd.html

Play Date: 02/21/2006
SLB (Schlumberger--$118.51; +4.03; optionable): Oil and gas services company. Splits 2:1 on 4-10-06
http://biz.yahoo.com/p/s/slb.html
After Hours: $118.58
STATUS: Test 50 day EMA (111.53). After a nasty drop this month, SLB jumped off the 50 day EMA Tuesday after three days at that level. Taking another run at it though energy is all over the map right now; SLB has a lot of institutional support and it showed as volume jumped at the 50 day EMA. Would like to see a little more volume as it moves higher. A move to the target lands us a 70%ish gain.
Volume: 6.993M Avg Volume: 5.977M
BUY POINT: $120.11 Volume=8M Target=$130 Stop=$116.95
POSITION: SLB ED - May $120c (53 delta)
http://www.investmenthouse.com/ci/slb.html

New buy point on current position:

Play Date: 02/21/2006
HOLX (Hologic--$50.99; -0.72; optionable): Medical appliances
http://biz.yahoo.com/p/h/holx.html
After Hours: $50.80
STATUS: Flying plateau. Nice low volume on the lateral move this month, allowing HOLX to consolidate the strong January move yet refusing to give up any ground. That is a sign of strength and investors not wanting to give up any shares. HOLX has run well for us and has run a long way, one of the stronger performers in 2005. This consolidation is giving a breather for another leg higher. Volume has started higher the past three sessions, indicating it is ready to try that move. Want to see strong trade as it moves through the buy point. Money flow is leading higher and accumulation in the 4 week lateral move is a solid 2 to 0 (2 up price weeks on rising volume to 0 down price weeks on rising volume). That sets it up for the move; now it just has to show it.
Volume: 563.4K Avg Volume: 857.532K
BUY POINT: $52.38 Volume=1.1M Target=$62 Stop=$49.54
POSITION: QHX FJ - June $55c (50 delta) &/or Stock
http://www.investmenthouse.com/ci/holx.html

Downside:

Play Date: 02/21/2006
CDIS (Cal Dive--$36.29; +1.04; optionable): Oil and gas service company
http://biz.yahoo.com/p/c/cdis.html
After Hours: $36.30
STATUS: Put. Head and shoulders. There is a joke about this pattern, but we will save that for another time. While SLB bounced off its 50 day EMA, CDIS fell through its 50 day, showing a lack of big money stepping up to support it. CDIS formed the head at the January high and then tanked from that peak on high volume. It ran lower the past three weeks, breaking the 50 day EMA as it did. The past week it rebounded to test the move, but could only make it to the 10 day EMA (36.67) on the high. It really did not form a right shoulder, instead falling right through the neckline at 36ish last week. Looking for it to roll over here at the 10 day EMA and follow the money flow lower. A move to the target lands us a 45%ish gain.
Volume: 1.45M Avg Volume: 1.627M
BUY POINT: $35.95 Volume=1.8M Target=$33.95 Stop=$36.72
POSITION: KPQ OU - Mar. $37.50p (-60 delta)
http://www.investmenthouse.com/ci/cdis.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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