us stock market, stock recommendation

Begin part 3 of 3

THE PLAYS

Good movers: BHI; FSL; GLBL; IFO; LTD; SPSS; SPSX

Tuesday night play results:
ORBK: Big reach lower and a rebound to close flat on big volume. May have set the bottom.
LTD: Strong volume move higher.
RSYS: Nice doji at the 18 day EMA
CBG: Bounced up on volume.
KFX: Doji at the near support at 14.

New Plays:

Upside:

Play Date: 05/31/2006
CELG (Celgene--$41.45; +1.15; optionable): Biotechnology
http://biz.yahoo.com/p/c/celg.html
After Hours: $41.50
STATUS: Ascending base. Good price/volume action the past three sessions with a good spike Friday as CELG gapped higher and another rising volume session Wednesday as CELG posted a nice gain off the 50 day EMA (39.85). CELG looks ready to move out of its 8 week consolidation over that support level after its strong 2005 to March 2006 run. Positive accumulation and strong money flow. Looking for continued strong volume as CELG makes the breakout from its base to a new all-time high.
Volume: 3.901M Avg Volume: 3.636M
BUY POINT: $42.95 Volume=5.5M Target=$51.50 Stop=$40.55
POSITION: LQH JV - Oct. $42.50c (55 delta) &/or Stock
http://www.investmenthouse.com/cd/celg.html

Play Date: 05/31/2006
HLEX (Healthextras--$30.04; +0.43; optionable): Pharmacy benefit management
http://biz.yahoo.com/p/h/hlex.html
STATUS: Double bottom w/handle. HLEX enjoyed a nice run in late 2005 and early 2006, making something of a climax move in mid-March. That topped it out on that long run and then it slipped into the current 10 week pattern that made a couple of bottoms over the 200 day SMA (26.70). Nice set up for a break higher, moving laterally the past three sessions just below the 50 day EMA (30.31), showing a good above average volume spike Wednesday. Money flow is way out in front, surging higher ahead of price. This is a strong market leader that is ready to make the next breakout and give us a nice run.
Volume: 363.546K Avg Volume: 315.128K
BUY POINT: $30.57 Volume=473K Target=$36.72 Stop=$29.34
POSITION: HUE IF - Sept. $30c (54 delta) &/or Stock
http://www.investmenthouse.com/cd/hlex.html

Play Date: 05/31/2006
NTGR (Netgear--$23.41; +1.55; optionable): Telecom communications equipment
http://biz.yahoo.com/p/n/ntgr.html
After Hours: $23.69
STATUS: Cup w/handle. NTGR has formed an 8 month base, setting up for a new all-time high. Big surge to end April on strong earnings, sending NTGR to 25, the September 2005 and the high on the left side of the base. That turned it back, and NTGR faded this month, forming the handle to the base. Volume jumped back up Wednesday after a very low showing the prior week. Strong money flow is leading higher. Heading toward the breakout on solid trade. Ready to move in as NTGR continues higher through the buy point.
Volume: 1.413M Avg Volume: 712.017K
BUY POINT: $23.75 Volume=1M Target=$28.50 Stop=$22.55
POSITION: TUD IX - Sept. $22.50c (62 delta) &/or Stock
http://www.investmenthouse.com/cd/ntgr.html

Continuing plays ready to move:

Play Date: 05/24/2006
RNT (Aaron Rents--$27.00; +0.18; no options): Rental & leasing services. http://biz.yahoo.com/p/r/rnt.html
STATUS: Test breakout. Volume jumped well above average Wednesday as RNT tapped the 50 day EMA (26.56) on the low and rebounded for a modest gain. Looks to have completed the test. To recap: Broke out from a 8 month cup with handle base in February and rallied up the 18 day EMA. It topped in late April and fell below the 50 day EMA (26.54) but rebounded last week on strong volume, making a new breakout, or really continuing the prior breakout run. After that Friday blast higher RNT faded back for the past week to test the 18 day EMA to close out the week. Relative strength broke out on the move, a very good indication for the continued move higher. Strong money flow is leading higher and after this test RNT is ready to follow it once more.
Volume: 517K Avg Volume: 293.542K
BUY POINT: $28.35 Volume=398K Target=$34.00 Stop=$26.37
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/rnt.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, AKAM, CCJ, CELG, FLR, GME, MGPI, MRVL, NVDA, SGMS, WM

New additions: AKAM, CCJ, FLR, MGPI, SGMS, WM

AAPL: Not a great development, getting the strong downside volume it did not have Tuesday.

CELG: See play above.

WM: Volume moved up toward average as WM moved off the 18 day EMA..

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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