top stock pick, stock recommendation

Begin part 3 of 3

THE PLAYS

Good movers: ALNY; GS; CELG; MSTR; RADS

Thursday night play results:
BBY: Nice doji at the 18 day EMA further sets up the move.
WFT: Low volume Friday. Still set to make the move.
CYMI: Slid below the 18 day EMA on low volume.
MCHP: Volume was up as MCHP continued higher off the 50 day EMA.
VMC: Still ready to make the break.

New Plays:

Upside:

Play Date: 03/04/2006
CWTR (Coldwater Creek--$22.07; -0.27; optionable): Retail clothing stores, etc.
http://biz.yahoo.com/p/c/cwtr.html
After Hours: $21.80
STATUS: Cup w/handle. Volume has moved back above average the past two weeks as CWTR completed the right side of its 14 week base. It has eased back to end last week, coming to test the 10 day EMA (21.82) and form the handle, the final shakeout of the last sellers to put demand ahead of supply. Then the stock is cleared to make the breakout. Solid 4 to 2 accumulation in the base (4 up price weeks on rising volume to 2 down price weeks on rising volume) shows strong buying, setting the foundation for the breakout. CWTR needed this consolidation after a good run to end the year, letting it set up for the next breakout to a new all-time high. Top fundamentals to match.
Volume: 1.571M Avg Volume: 1.263M
BUY POINT: $22.81 Volume=1.9M Target=$27.45 Stop=$21.39
POSITION: UCJ GX - July $22.50c (52 delta) &/or Stock
http://www.investmenthouse.com/ci/cwtr.html

Play Date: 03/04/2006
EFJI (EFJ, Inc.--$12.02; +0.40; optionable): Wireless radios, communication infrastructure.
http://biz.yahoo.com/p/e/efji.html
STATUS: Test breakout. EFJI broke out from a 16 week ascending triangle in early January and immediately came back to test the move. It then rallied through early February and then laterally the past four weeks, holding the 18 day EMA (11.60) on the lows. Friday volume jumped as EFJI did the same, looking ready to resume the breakout move. Excellent 8 to 0 accumulation in the triangle and this consolidation (8 up price weeks on rising volume to 0 down price weeks on rising volume) shows solid buying. Money flow is rising ahead of price, a good complement to the accumulation. Ready to break to a new 7 year high. Very solid pattern, very solid fundamentals.
Volume: 326.844K Avg Volume: 202.19K
BUY POINT: $12.22 Volume=303K Target=$14.68 Stop=$11.48
POSITION: EPU FV - June $12.50c (60 delta) &/or Stock
http://www.investmenthouse.com/ci/efji.html

Play Date: 03/04/2006
NETL (Netlogic Microsystems--$37.76; -1.11; optionable): Semiconductor memory chips
http://biz.yahoo.com/p/n/netl.html
After Hours: $41.71
STATUS: Test breakout. NETL broke out from a short 5 week cup base on Thursday, completing a test of and rebound off the 50 day EMA (32.81), the level that acted as support during the short base. Positive accumulation and surging money flow. Volume jumped last week as NETL made the move off the 50 day EMA, another indication of strong buying in this market leader. Friday NETL eased back, starting the test of the strong run higher. It may come on back to test the 10 day EMA (36.08) before it is ready to continue the breakout move. This is a strong stock, however, and we want to be ready for when it turns back up on a solid volume shot. Again, a strong leader with strong fundamentals to match, and we want to pick it off as it rebounds. We will also look for positions quickly off the bounce if it tests the 10 day EMA.
Volume: 331.764K Avg Volume: 346.85K
BUY POINT: From the Friday close: $38.55. Test 36: $36.55 on the rebound. Volume=500K Target=$46 Stop=$36
POSITION: LKT GG - July $35c (80 delta) or LKT GH - July $40c (49 delta) &/or Stock
http://www.investmenthouse.com/ci/netl.html

Play Date: 03/04/2006
ORCC (Online Resources--$13.15; -0.06; no options): Outsourced internet financial technology services to financial service providers
http://biz.yahoo.com/p/o/orcc.html
After Hours: $13.21
STATUS: Cup w/handle. ORCC has formed a short but nice 6 week base on top of the 50 day EMA (12.56), this base forming right on the heels of the breakout from an 11 week base in January. Nice base on base pattern, and they really work to weed out the sellers and place the stock in the hands of strong holders. ORCC bounced off the 50 day EMA (12.56) Wednesday and then spent Thursday and Friday easing back toward the 10 day EMA (12.95), working on the final shakeout. Strong 4 to 0 accumulation shows all buying in the current base. Strong money flow is moving higher ahead of the price. May take another day or two to complete the pattern, but a solid leader with strong fundamentals ready to break to a 6 year high.
Volume: 135.426K Avg Volume: 132.562K
BUY POINT: $13.55 Volume=199K Target=$16.25 Stop=$12.85
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ci/orcc.html

Play Date: 03/04/2006
QCOM (Qualcom--$47.63; -0.20; optionable): Telecom equipment and licensing
http://biz.yahoo.com/p/q/qcom.html
After Hours: $47.82
STATUS: Reverse head and shoulders. A nice little 8 week accumulation base has formed, using the 50 day EMA (46.78) as support for the 'head.' This base consolidates the January breakout and rally from QCOM's larger base, one that started in December 2004. Positive 3 to 1 accumulation in the current base shows plenty of buying above the 50 day EMA, a key support level. Strong money flow. A current leader in this market, showing strong fundamentals to go with its pattern that is ready to break to a 5 year high.
Volume: 11.38M Avg Volume: 12.96M
BUY POINT: $48.88 Volume=19M Target=$57.95 Stop=$46.55
POSITION: AAO GW - July $47.50c (59 delta) &/or Stock
http://www.investmenthouse.com/ci/qcom.html

Play Date: 03/04/2006
RMBS (Rambus--$32.21; -0.53; optionable): Semiconductor memory chips
http://biz.yahoo.com/p/r/rmbs.html
After Hours: $32.15
STATUS: Cup w/handle. RMBS exploded higher to start 2006 when it announced a deal with AMD and success in one of its seeming unending litigation cases. It shot to 35 and needed a blow. The current 8 week base is giving it that rest and is shaping up nicely, easing back Thursday and Friday on lower, below average volume as RMBS sets up the next move, holding easily above the 50 day EMA (27.40) as it does. Positive accumulation in the base and some strong fundamentals to go along with it. RMBS will likely spend the next couple of sessions completing the handle formation (the 10 day EMA is at 31.23), but then will be ready to make the breakout. Nicely formed.
Volume: 1.916M Avg Volume: 6.553M
BUY POINT: $33.82 Volume=9.8M Target=$41.55 Stop=$31.45
POSITION: BNQ EF - May $30c (66 delta) or BNQ HG - July $35c (55 delta) &/or Stock
http://www.investmenthouse.com/ci/rmbs.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.

top stock pick
stock recommendation