stock recommendation, stock option

Begin part 3 of 3

THE PLAYS

Tuesday night play results:
LIFC: Still setting up for the break higher, ignoring the selling.
NTGR: Not bad at all, bouncing on solid volume. Just about there.
RTK: Nice volume again as it hit the buy right before the close. Ready.
GRMN: Nope. Tanked through the 18 day EMA.

New Plays:

Upside:

Play Date: 05/17/2006
MORN (Morningstar--$46.22; +0.76; optionable): Asset management
http://biz.yahoo.com/p/m/morn.html
After Hours: $46.22
STATUS: Reverse head and shoulders. A new issue in May 2005, MORN is setting up for the breakout from its 8 week base that formed on top of the 50 day EMA (43.37). Excellent 4 to 0 accumulation in the base shows all buying as MORN consolidates 5 month run ahead of its next breakout. Have to like all of that buying, and money flow is running as well. Volume jumped well above average this week. Relative strength has already broken out, a nice bullish move.
Volume: 193.004K Avg Volume: 70K
BUY POINT: $46.89 Volume=200K Target=$53.95 Stop=$44.48
POSITION: QMR II - Sept. $45c (62 delta) &/or Stock
http://www.investmenthouse.com/cd/morn.html

Play Date: 05/17/2006
SMDI (Sirenza Microdevices--$11.27; -0.25; no options): Semiconductor integrated circuits
http://biz.yahoo.com/p/s/smdi.html
After Hours: $11.14
STATUS: Test 18 day EMA. SMDI broke out from a 13 month cup with handle base in January, and has rallied up the 18 day EMA (11.26) since. Big move higher to start May but then the market selling brought it back. It sold on lower volume the past week, however, coming back to the 18 day EMA on the test. We are looking for one more strong run higher from SMDI after this test.
Volume: 397.682K Avg Volume: 455.86K
BUY POINT: $11.67 Volume=684K Target=$14.00 Stop=$10.85
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/smdi.html

New buy points on current plays:

Play Date: 05/17/2006
FSL (Freescale Semiconductor--$30.00; -0.53; optionable): Semiconductors
http://biz.yahoo.com/p/f/fsl.html
STATUS: Test 50 day EMA. This is Motorola's semiconductor spin-off, and in its 2 years has moved steadily higher. It broke out from a 5 month flat base in mid-April, surging on strong volume on strong earnings. After peaking on that run in early May at 33, it started to test, holding the 18 day EMA (30.85) originally, but then fell lower last week, coming to the 50 day EMA (29.61). It has moved laterally above the 50 day the past four sessions with volume jumping back up Wednesday. Looking for that volume to continue as FSL rebounds from this test that also filled the April gap higher.
Volume: 2.835M Avg Volume: 2.14M
BUY POINT: $30.95 Volume=2.5M Target=$37.00 Stop=$29.48
POSITION: FSL IF - Sept. $30c (55 delta) &/or Stock
http://www.investmenthouse.com/cd/fsl.html

Play Date: 05/17/2006
WFR (Memc Electronic--$41.00; -0.22; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/w/wfr.html
STATUS: Test 50 day EMA. After a nice surge in early May, WFR sold back with the market, but it has held the 50 day EMA (40.01), the same point where it broke higher in mid-April. A market leader in the semiconductor sector. We want to see volume surge as it rebounds off of the key level.
Volume: 3.426M Avg Volume: 3.129M
BUY POINT: $41.88 Volume=4M Target=$50.00 Stop=$39.72
POSITION: WFR JH - Oct. $40c (55 delta) &/or Stock
http://www.investmenthouse.com/cd/wfr.html

Ready to move: OPLK

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

Keeps those suggestions coming in. Already have some good candidates so send in your favorites. Need some input as to stocks you want to see to replace BRCM, COH, FFIV, PSYS, UNH

BRCM: Strong volume as BRCM moved off the 200 day SMA. Interesting with the volume, but it has a big hole to dig out of.

GME: After rebounding to the 50 day EMA, it looks ready to roll back over.

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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