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Begin part 3 of 3

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THE PLAYS

Good movers: AMT; CELL; BJS

Weekend play results:
DXPE: Holding steady at 45 support
FORR: Nope. Turned down on rising volume.
LMIA: Still hanging in the pattern on lower, below average volume.
UARM: Nice doji at the 50 day EMA
AMT: Turning down hard
BJS: Gapped higher and rolled over on rising trade
PGNX: Volume was up as it tested higher and faded.

New Plays:

Upside:

Play Date: 05/30/2006
CTRP (Ctrip.com International--$47.41; -1.69; optionable): Chinese travel
http://biz.yahoo.com/p/c/ctrp.html
STATUS: Ascending triangle. CTPR is using this 5 week base formed above the 50 day EMA (44.43) to consolidate the late February breakout and run higher up the 18 day EMA (46.93). After a strong breakout a stock will run up that short term MA and then need a deeper test to the 50 day EMA, exactly what CTRP is doing. It continues to make higher lows as it works below at top. Holding up very well in the market selling, fading back to the 18 day EMA Tuesday, but holding that support. Looking for CTRP to make a higher low here and then surge higher on stronger trade to give us the entry into the play.
Volume: 658.515K Avg Volume: 465.372K
BUY POINT: $49.25 Volume=698K Target=$59.00 Stop=$46.78
POSITION: QCT IJ - Sept. $50c (49 delta) &/or Stock
http://www.investmenthouse.com/ci/ctrp.html

Play Date: 05/30/2006
LH (Laboratory Corp.--$58.86; -0.17; optionable): Medical labs
http://biz.yahoo.com/p/l/lh.html
STATUS: Double bottom w/handle. Sweet little 9 week base has formed right at its old (1992) all-time high. Nice use of the 50 day EMA (58.17) as support for the base with the handle coming back to that level last week intraday and rebounding. Friday and Tuesday LH showed nice dojis at the 18 day EMA (58.74) on lower trade. Strong money flow and a relative strength breakout a week back. Very strong action in a weak market, holding its own and using the selling to set up its breakout. Looking for that high volume to return and give us the buy point.
Volume: 355.1K Avg Volume: 678.125K
BUY POINT: $60.45 Volume=1M Target=$70.00 Stop=$58.00
POSITION: LH KL - Nov. $60c (48 delta) &/or Stock
http://www.investmenthouse.com/ci/lh.html

Play Date: 05/30/2006
ORBK (Orbotech--$25.26; -0.01; optionable): Scientific and technical instruments
http://biz.yahoo.com/p/o/orbk.html
STATUS: Test 50 day EMA. Taking another look at ORBK as it broke higher in early May, moving out of a 14 week cup with handle on strong volume. It got caught in the selling and came back to test the move down at the 50 day EMA (25.26). Nice tight doji at the 50 day Tuesday as volume jumped back above average. Looking for more strong volume as it breaks higher through the 18 day EMA (25.67).
Volume: 147.864K Avg Volume: 110K
BUY POINT: $25.77 Volume=165K Target=$30.95 Stop=$25.00
POSITION: OKQ JE - Oct. $25c (61 delta) &/or Stock
http://www.investmenthouse.com/ci/orbk.html

Downside:

Play Date: 05/30/2006
CBG (CB Richard Ellis--$74.58; -1.93; optionable): Property management
http://biz.yahoo.com/p/c/cbg.html
STATUS: Put. After a long, steady move up the 18 day EMA (78.98) through early May, CBG's upside has run out of road. It made what looked to be a routine test of the 50 day EMA (79.14) mid-May, but then fell through that level. It tried to rebound the past three sessions, but Friday showed a doji below the 10 day EMA (77.05) and Tuesday turned down from that level on rising, average trade. The inability to move through the 10 day EMA shows it has weakened considerably. Money flow is diving lower ahead of price, leading the way lower. Looking to move in on a further solid volume move lower. A run to the target lands us a 45%ish gain.
Volume: 825.5K Avg Volume: 715.931K
BUY POINT: $74.22 Volume=850K Target=$74.05 Stop=$75.21
POSITION: CBG SO - July $75p (-46 delta)
http://www.investmenthouse.com/ci/cbg.html

Play Date: 05/30/2006
KFX (KFX, Inc.--$14.14; -0.48; optionable): Specialty chemicals
http://biz.yahoo.com/p/k/kfx.html
STATUS: Put. KFX formed a broad top from February to early May, and then it broke its back, gapping below the 200 day SMA (16.64) two weeks back. It tumbled close to 13 and then rebounded the past week on very low, below average volume. High volume drop, low volume rebound; that shows sellers on the way down, no real buyers on the bounce. Tuesday it tapped the 10 day EMA (14.90) on the high and then rolled over. Looks ready for the next run lower. A move to the target lands us a 44%ish gain.
Volume: 589.2K Avg Volume: 765.188K
BUY POINT: $13.95 Volume=800K Target=$12.40 Stop=$14.48
POSITION: KFX SC - July $15c (-55 delta)
http://www.investmenthouse.com/ci/kfx.html

Good Investing!
Jon L. Johnson and your IH Alerts Team

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