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Begin part 3 of 3

THE PLAYS

Good movers: BHI; CLHB; LUK; NAK; TWGP

Monday night play results:
BUD: Took the day off on lower, below average volume. Still nice action.
CMRG: Still a nice test of the 18 day EMA in a tight range. Volume jumped back above average, indicating a move may be afoot.
TNL: Nope. Tanked through the 50 day EMA. Will watch it as volume was lower.

New Plays:

Upside:

Play Date: 05/23/2006
GLBL (Global Industries--$17.82; +0.56; optionable): Construction services for offshore oil and gas industries.
http://biz.yahoo.com/p/g/glbl.html
After Hours: $17.92
STATUS: Test 18 day EMA. GLBL is making the second test of the 18 day EMA (17.07) after its mid-April breakout from a 6.5 month cup with handle base. Solid volume on the upside moves and a relative strength breakout this month shows the stock's strength as it rises in a selling market. Solid 7 to 5 accumulation in the base. Great volume Tuesday as GLBL moved up and held much of its move. Ready to move in as it continues off the 18 day.
Volume: 2.204M Avg Volume: 1.179M
BUY POINT: $18.25 Volume=1.5M Target=$21.95 Stop=$17.00
POSITION: GQO IW - Sept. $17.50c (59 delta) &/or Stock
http://www.investmenthouse.com/cd/glbl.html

Play Date: 05/23/2006
SPSX (Superior Essex--$30.97; +0.10; no options): Communications wire and cable, magnet wire, fabricated insulation.
http://biz.yahoo.com/p/s/spsx.html
STATUS: Breakout test. Strong breakout in early May from a 12 week cup with handle base, surging on high volume to 34. It spent the past two weeks fading back to the 18 day EMA (30.77), testing the move. Nice low volume shows few sellers. Monday volume spiked as SPSX tested below the 18 day EMA and then rebounded to hold that support; nice shakeout. Tuesday it tried to rally but faded back, showing a nice hammer doji. Strong 3 to 1 accumulation in the base (3 up price weeks on rising volume to 1 down price weeks on rising volume) shows plenty of buying to set up the breakout and run higher. Excellent test with volume coming back into the stock. Ready to move in as it follow the money flow higher. Nice relative strength breakout with the price move, and holding the breakout on this test. Ready to move in as it continues this bounce.
Volume: 265.014K Avg Volume: 170.946K
BUY POINT: $32.12 Volume=256K Target=$38.55 Stop=$30.55
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/spsx.html

Play Date: 05/23/2006
SWB (Smith & Wesson Holdings--$6.73; +0.20; no options): Guns
http://biz.yahoo.com/p/s/swb.html
After Hours: $6.85
STATUS: Ascending base. Nice base on base pattern, forming the current 6 week base above the 50 day EMA (6.25), setting up the next move after the break higher from an 8 month base in April. Solid 3 to 1 accumulation in the current base shows buyers still moving in even as it consolidates. Relative strength broke out this week even as the stock continues to move in its base, a very bullish indication for a price breakout. With the legislation regarding liability for gun manufacturers, this play has some extra juice behind it.
Volume: 367.1K Avg Volume: 333.868K
BUY POINT: $6.95 Volume=501K Target=$8.35 Stop=$6.55
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/swb.html

Downside:

Play Date: 05/23/2006
ZEUS (Olympic Steel--$30.36; +0.94; optionable): Steel and iron
http://biz.yahoo.com/p/z/zeus.html
STATUS: Put. A nice mover in its sector, ZEUS peaked in late April, reversing on high volume the day it hit its all-time high and then gapping lower to the 50 day EMA (31.71) two sessions later. It bounced but made a lower high this month on lower volume, falling two weeks ago back to the 50 day. Monday it gapped lower through that level on volume. Tuesday it rallied back to the 50 day but then faded back as volume backed off to below average. Looking for the selling to continue as ZEUS works off its strong run. This one is not oversold. A move to the target lands us a 43%ish gain.
Volume: 242.321K Avg Volume: 235.267K
BUY POINT: $29.96 Volume=300K Target=$27.45 Stop=$30.65
POSITION: SBQ SF - July $30p (-42 delta)
http://www.investmenthouse.com/cd/zeus.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

Had a lot more late entries come in so we are still sorting through them, taking a good look at each. As soon as we get that done we will post the new list. The responses are varied ranging, for example GM, CCJ, BNI, SNDK, CVH, DIS, PALM, ET, SNDK, etc. Any last minute choices will be considered, though I hate to say that given all the candidates sent in. Replacing: BRCM (this one is on the bubble), COH, FFIV, PSYS, UNH

AAPL: Still trying to hold the 200 day SMA (63.37).

CELG: Trying to recover the 50 day EMA (39.68) as it holds some support at 37.50. Working on a new base.

MRVL: Well, it bounced up to the 50 day EMA Friday and now it is back below the 200 day SMA. About all you can say is it filled the gap on the Tuesday intraday reach lower.

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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