top stock pick, stock recommendation

Begin part 3 of 3

THE PLAYS

Good movers: AMT; DBRN; CYMI; DXPE; GG; RIO; SLB; AMD

Weekend play results:
BLKB: Stalled out for the day on low volume.
DJO: Didn't get the volume to make the move. Still set up
FSH: Gapped higher and rolled over.
HAE: Tried to make the run on some solid volume, but could not hold it.
RES: Gapped higher but really went nowhere. If it holds and continues higher we will start the play.
WEBX: Continued higher on above average volume

New Plays:

Upside:

Play Date: 05/01/2006
CELG (Celgene--$41.82; -0.34; optionable): Biotechnology
http://biz.yahoo.com/p/c/celg.html
After Hours: $41.74
STATUS: Cup w/handle. A capital run from July 2005 to the end of March 2006 put some nice money in our pocket. Then CELG needed a rest and faded back in early April. It held some support at 36 from the January and February highs in its base, moving laterally for three weeks. Last week it started higher, rallying on some strong earnings results after struggling at the 50 day EMA (38.92). Gapped higher and faded back Friday on low volume, then eased back a bit further Monday on low volume as well. May take another couple of days to complete the handle, but if it starts to run from here we are not going to back off from starting the play.
Volume: 3.008M Avg Volume: 3.477M
BUY POINT: $42.72 Volume=5.2M Target=$50.95 Stop=$40.71
POSITION: LQH JV - Oct. $42.50c (52 delta) &/or Stock
http://www.investmenthouse.com/ci/celg.html

Play Date: 05/01/2006
HLTH (Webmd Corp.--$11.69; +0.25; optionable): Healthcare information service
http://biz.yahoo.com/p/h/hlth.html
After Hours: $11.45
STATUS: Test breakout. Announced strong earnings mid-April and surged higher on strong volume, making the breakout from its 6.5 month cup with handle base. Excellent 8 to 2 accumulation (8 up price weeks on rising volume to 2 down price weeks on rising volume) shows strong buying in the base. Ready to break to a new 5 year high. Volume was up Monday, back above average as HLTH came off the 18 day EMA (11.23) after breaking out from the base and a nice, quick test. Ready to move in as it continues higher.
Volume: 4.024M Avg Volume: 2.586M
BUY POINT: $11.98 Volume=3.5M Target=$14.38 Stop=$11.22
POSITION: HUT JB - Oct. $10c (72 delta) &/or Stock
http://www.investmenthouse.com/ci/hlth.html

Play Date: 05/01/2006
OIS (Oil States Int.--$41.25; +0.88; optionable): Oil & gas service company
http://biz.yahoo.com/p/o/ois.html
STATUS: Cup w/handle. OIS is looking for an all-time high with a breakout from the current 14 week base that formed using the 200 day SMA (34.45) on the lows as support. That is where the institutions either step in or step out; they were stepping in here, bouncing OIS back up. It formed the handle the past two weeks, holding the 18 day EMA on the lows. Volume has started to pick up the past week and was up Monday as OIS tested toward the breakout. Positive 4:3 accumulation in the base shows net buying, setting up the breakout. Looking for a good surge as OIS moves through the buy point.
Volume: 726K Avg Volume: 776.742K
BUY POINT: $42.05 Volume=1.2M Target=$49.95 Stop=$39.88
POSITION: OIS IH - Sept. $40c (59 delta) &/or Stock
http://www.investmenthouse.com/ci/ois.html

Play Date: 05/01/2006
QGEN (Qiagen--$15.07; +0.17; optionable): Biotechnology
http://biz.yahoo.com/p/q/qgen.html
STATUS: Cup. QGEN rallied hard in February, clearing a 6.5 month base with quite a surge up to 15.50. It has tested back the past 8 weeks, holding the 50 day EMA (14.29) at the mid-April lows. It rebounded and Monday cleared some interim resistance in the base at 15. Excellent 4 to 0 accumulation in the base shows all buying as it consolidated that earlier breakout. Ready to move in as the solid move continues.
Volume: 244.46K Avg Volume: 292.732K
BUY POINT: $15.22 Volume=439K Target=$18.32 Stop=$14.55
POSITION: QXE HC - Aug. $15c (58 delta) &/or Stock
http://www.investmenthouse.com/ci/qgen.html

Downside:

Play Date: 05/01/2006
MHP (McGraw-Hill--$54.89; -0.77; optionable): Publishing
http://biz.yahoo.com/p/m/mhp.html
STATUS: Put. After a good run from February into March MHP peaked and formed a broad top in April. It slipped lower to end the month, dropping on strong volume through the 50 day EMA (56.04). It rebounded to test on lower volume, trying to move through that level Monday. Instead it rolled over on much stronger volume. Ready to move in as MHP continues lower. Same type of broad top it showed in November that led to a sharp decline in January. Looking for a similar move here. A drop to the target lands us a 40%ish gain. If it is falling hard when it hits the target we will look at letting it continue on toward 52 where there is some support.
Volume: 2.59M Avg Volume: 1.713M
BUY POINT: $54.61 Volume=2M Target=$53.00 Stop=$55.05
POSITION: MHP RK - June $55p (-47 delta)
http://www.investmenthouse.com/ci/mhp.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