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Begin part 3 of 3

THE PLAYS

Good movers: BGC; BHI; CELG; CLHB; IFO; RTK; SMDI; SWB

Thursday night play results:
BGC: Strong volume move continues
CSH: Gapped higher but not the breakaway volume we wanted
IMA: Surged higher but gave it all back.
CELG: Nice continued break higher

New Plays:

Upside:

Play Date: 06/03/2006
ABI (Applera Corp-Appliaed Biosystems--$29.79; -0.01; optionable): Products, technologies to support genomics research, etc.
http://biz.yahoo.com/p/a/abi.html
STATUS: Test breakout. ABI broke out from a reverse head and shoulders base in late May, gapping higher on solid trade. That did not give us much to work with but since then it came back to test the gap higher, filled it, and then started back up. It stalled Friday at the breakout highs at 30, but we expect it to makes its break this week. Tremendous 8 to 2 accumulation (8 up price weeks on rising volume to 2 down price weeks on rising volume) shows all buying. Strong money flow is a good complement. Ready for a break higher this week and looking to move in at that point.
Volume: 1.496M Avg Volume: 1.214M
BUY POINT: $30.11 Volume=1.5M Target=$36.00 Stop=$29.11
POSITION: ABI IF - Sept. $30c (52 delta) &/or Stock
http://www.investmenthouse.com/cd/abi.html

Play Date: 06/03/2006
JTX (Jackson Hewitt--$32.60; +0.10; optionable): Tax services
http://biz.yahoo.com/p/j/jtx.html
STATUS: Test breakout. A new issue in June 2004, has formed three bases to this point, breaking out of the third in mid-May and rallying to 34. In the market selling it came back, tapping at the 50 day EMA (30.80) in late May and then rebounding, moving laterally along the 18 day EMA (31.84) to close out last week. Excellent 3 to 0 accumulation in the base shows plenty of buying to send the stock higher. Nice doji Thursday and Friday on a strong surge in volume indicates JTX is crouching for the breakout to come. Want to see continued strong trade as it makes the move.
Volume: 349.6K Avg Volume: 273.772K
BUY POINT: $33.32 Volume=411K Target=$39.98 Stop=$32.00
POSITION: JTX JF - Oct. $30c (65 delta) &/or Stock
http://www.investmenthouse.com/cd/jtx.html

Play Date: 06/02/2006
MOLX (Molex--$36.15; +0.06; optionable): Electromechanical components
http://biz.yahoo.com/p/m/molx.html
After Hours: $36.20
STATUS: Test breakout. MOLX broke out from a 27 month cup with handle in early April. It rallied just over 39 on the move and then sold off in the May market selling, undercutting the 50 day EMA (35.52) but then posting a sharp rebound. It spent the past week moving laterally over that level on very low, below average volume. Money flow has risen during that lateral move. Looking for that to spur the next break higher and continue the run. Good test for a solid market leader.
Volume: 272.996K Avg Volume: 631.323K
BUY POINT: $36.65 Volume=900K Target=$43.98 Stop=$35.35
POSITION: OXQ KG - Nov. $35c (65 delta) &/or Stock
http://www.investmenthouse.com/cd/molx.html

Play Date: 06/02/2006
ZUMZ (Zumiez--$33.96; -0.97; optionable): Apparel stores
http://biz.yahoo.com/p/z/zumz.html
STATUS: Reverse head and shoulders. Split in late April, rallied a bit more and then fell into the current 5 week base, using the 50 day EMA (31.56) as support. Excellent 3 to 0 accumulation in the base (3 up price weeks on rising volume to 0 down price weeks on rising volume) shows all buying, setting up the next breakout and run for this strong market leader. One of those retail leaders we referred to.
Volume: 320.651K Avg Volume: 288.748K
BUY POINT: $35.05 Volume=433K Target=$42.00 Stop=$32.95
POSITION: QUY KG - Nov. $35c (56 delta) &/or Stock
http://www.investmenthouse.com/cd/zumz.html

New buy point on current position:

Play Date: 06/03/2006
JOBS (51job, Inc.--$27.20; -0.38; no options): Staffing and outsourcing
http://biz.yahoo.com/p/j/jobs.html
STATUS: Test 18 day EMA. Withstood the Friday jobs report rather well, tapping back to the 18 day EMA (26.77) on the low and recouping some of the losses. Volume moved up to average after trailing off the past week as JOBS moved laterally, testing the strong April and May run higher. Withstanding the jobs report was a good test. A break higher from here on strong volume will be a good indication of JOBS continued strength and a new run coming.
Volume: 293.118K Avg Volume: 241.553K
BUY POINT: $28.65 Volume=350K Target=$34.65 Stop=$26.65
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/jobs.html

Continuing plays ready to move:

Play Date: 05/16/2006
LIFC (Lifecell--$27.50; -0.01; optionable): Biotechnology
http://biz.yahoo.com/p/l/lifc.html
STATUS: Test breakout. Volume edged higher Friday as LIFC tried the move but closed flat, still sitting on top of the 18 day EMA (27.03) as it tests the strong late April breakout. It came back to the 50 day EMA two weeks back, and now it looks perched to make us a strong move this week.
Volume: 481.887K Avg Volume: 703.503K
BUY POINT: New: $28.05 (orig. $26.97) Volume=1M Target=$34.95 Stop=$25.08
POSITION: QKL IY - Sept. $27.50c (62 delta) &/or Stock
http://www.investmenthouse.com/cd/lifc.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

AAPL: Rebounding to test the 200 day SMA (63.98) but rolling over Friday just below that level. AAPL peaked in January and looks to be in the process of forming a big double bottom base, currently working on the second leg.

AKAM: Tried the next move Friday, gapping above the 50 day EMA (31.57) but then giving all of the move up and more. Still working on its new base and will likely make some test of the May low near 28 once more before this is done.

CCJ: Trying to make the breakout from a short double bottom with handle. No volume Friday on the gap out of the handle, however.

FLR: Gapped above the 50 day EMA on strong volume. Short double bottom has formed over support at 85. Looks mucho bueno here for a move higher to 100.

SGMS: Still working laterally in a tight range on low volume above the 50 day EMA. Setting up a new upside move. A move over 38.90 on strong trade is the entry.

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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