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Begin part 3 of 3

THE PLAYS

Good movers: SMDI, SMSI, ALTR, AMT, CELL, KFX

Weekend play results:
DXPE: Charged higher on volume almost $5 but gave most of the move back
MOLX: Nope. Turned lower and fell thru the 50 day EMA. May set up a double bottom at 34 but that remains to be seen.
ZOLT: Faded back but held above the 10 day EMA
ZUMZ: Coming back to test some more but on very low trade & still in the pattern.
JOBS: Nice doji at the 18 day EMA
ALTR: Diving lower on volume

New Plays:

Upside:

Play Date: 06/05/2006
CIEN (Ciena--$4.54; -0.11; optionable): Telecom processing systems
http://biz.yahoo.com/p/c/cien.html
After Hours: $4.55
STATUS: Cup w/handle. Strong volume to end last week as CIEN moved up off the lows in its 11 week base. It started to come back Friday after hitting an early high and fading, continuing that pullback on much lower, below average volume. It is working on its handle, the low volume pullback that shakes out sellers. One of the group of telecom leaders that enjoyed a strong November through March run, CIEN has set up a nice base and is trying to start to lead again. We will let it continue to work on the handle as the market makes this test; how it holds up will show us a lot about the buyers in the stock.
Volume: 16.107M Avg Volume: 25.081M
BUY POINT: $4.85 Volume=38M Target=$5.88 Stop=$4.51
POSITION: EUQ JA - Oct. $5c (48 delta) &/or Stock
http://www.investmenthouse.com/ci/cien.html

Play Date: 06/05/2006
ININ (Interactive Intelligence--$10.52; -0.02; no options): Contact center automation, self-service automation software, etc.
http://biz.yahoo.com/p/i/inin.html
STATUS: Ascending base. ININ jumped higher in late April, moving out of an 8 week flat base with a sharp, solid volume move. After rallying to 11.87 it fell into the current 6 week pattern, using the 50 day EMA (9.87) as support. It used that level the past three sessions, showing a nice doji Monday on a strong burst of volume. No real news other than an announcement it would host a conference. Strong money flow and positive accumulation go hand in hand. Looking for some continued solid trade as it breaks higher through the buy point.
Volume: 226.302K Avg Volume: 80K
BUY POINT: $11.21 Volume=120K Target=$13.45 Stop=$10.43
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/ci/inin.html

Downside:

Play Date: 06/05/2006
RVI (Retail Ventures--$14.88; -0.67; optionable): Department stores
http://biz.yahoo.com/p/r/rvi.html
STATUS: Head and shoulders. While many retailers are holding up well, RVI is struggling, having set up a 7 week top, breaking through the neckline of the pattern at 15 Monday as volume spiked. Ready to step in as RVI continues lower. It may not enter into a major dive, but even strong stocks go through corrections and this pattern is a sweet downside set up. A move to the target lands us a 40%ish gain.
Volume: 678K Avg Volume: 374.312K
BUY POINT: $14.78 Volume=375K Target=$13.75 Stop=$15.05
POSITION: RVI SD - July $15p (-46 delta)
http://www.investmenthouse.com/ci/rvi.html

Play Date: 06/05/2006
XTO (XTO Energy--$40.69; -1.41; optionable): Independent oil and gas
http://biz.yahoo.com/p/x/xto.html
STATUS: Put. XTO set up two consecutive head and shoulders bases, the first bouncing off the 200 day SMA (42.83), the second crashing through that level in May. It fell on strong volume to 37 on the low and then rebounding to test the 200 day. It gapped higher Monday, not quite making it to that level before rolling back over on rising volume. Money flow is heading lower ahead of price. Looking to move in on further downside and pick up some gain on the downside move. A move to the target lands us a 46%ish gain.
Volume: 3.186M Avg Volume: 3.509M
BUY POINT: $40.48 Volume=3.2M Target=$38.35 Stop=$41.25
POSITION: XTO SH - July $40p (-41 delta)
http://www.investmenthouse.com/ci/xto.html

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

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 in 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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