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Begin part 3 of 3

THE PLAYS

Good movers: BOT; FLS; FVE; FWRD; HUM; VCLK

Wednesday night play results:
DIA: Nice move starting
FLS: Good volume starting it off the 50 day SMA
GLD: Moving higher after the Monday and Friday gaps
GRMN: Did not make the test. May get a bit of a pullback Friday before it continues
SCHN: Cleared the 50 day EMA but not much trade Thursday.
VLO: Still forming a nice handle.

New Plays:

Upside:

Play Date: 07/06/2006
NTES (Netease.com--$22.84; +0.17; optionable): Chinese interactive internet services
http://biz.yahoo.com/p/n/ntes.html
After Hours: $22.81
STATUS: Cup w/handle. NTES spent last week teasing us with intraday moves up to 22.83, but then fading back to close. That, however worked to form up a handle to its 12 week base that formed using the 200 day SMA (19.55) as support. This week it continues working on its handle, moving laterally the past four sessions on low, below average volume. Nice set up to the break higher, and now it needs to show the move. It looked to be getting ready Thursday as volume moved up toward average as NTES tested the water at bit higher level. Just needs to show us the move and stop the tease. Nice action that we think will provide the breakout and net us some gains.
Volume: 1.65M Avg Volume: 1.832M
BUY POINT: $23.12 Volume=2.5M Target=$26.95 Stop=$21.65
POSITION: NQG LX - Dec. $22.50c (50) &/or Stock
http://www.investmenthouse.com/cd/ntes.html

Play Date: 07/06/2006
MCHP (Microchip--$34.35; +1.94; optionable): Semiconductors
http://biz.yahoo.com/p/m/mchp.html
After Hours: $34.35
STATUS: Cup. Not all chips are dead. MCHP has formed part of a cup, now in its tenth week and starting to move higher to form the right side of the base. Volume has started to jump on the upside sessions, doing so once again Thursday on some really tremendous trade. This looks to have started the move higher after its rounded 6 week bottom as MCHP cleared the 200 day SMA, the 50 day EMA and the 50 day SMA (34.26) in one swoop. May test a bit to start Friday, but looking for it to hold and start on up.
Volume: 3.905M Avg Volume: 1.837M
BUY POINT: $34.57 Volume=2.1M Target=$39.95 Stop=$33.48
POSITION: QMT JG - Oct. $35c (54 delta) &/or Stock
http://www.investmenthouse.com/cd/mchp.html

Play Date: 07/06/2006
PRXL (Parexel Intl.--$28.78; +0.65; optionable): Biopharmaceutical services
http://biz.yahoo.com/p/p/prxl.html
STATUS: Reverse head and shoulders. PRXL reported earnings today and Gapped higher on solid volume, something it has shown plenty of the past week. Nice pattern forming at the 50 day EMA (27.51), setting PRXL up for a seven year high. Excellent 4 to 1 accumulation in the pattern (4 up price weeks on rising volume to 1 down price weeks on rising volume) shows great buying, setting up the breakout. Strong money flow is leading higher. After this gap PRXL closed well off the high; it may come back a bit early to fill the gap, then we want to see it continue the move to give us the buy point.
Volume: 483.783K Avg Volume: 269.222K
BUY POINT: $29.32 Volume=404K Target=$34.75 Stop=$27.97
POSITION: VBQ LF - Dec. $30c (54 delta) &/or Stock
http://www.investmenthouse.com/cd/prxl.html

New buy point on current position:

Play Date: 07/06/2006
EEFT (Euronet Worldwide--$37.14; -0.01; optionable): Payment systems
http://biz.yahoo.com/p/e/eeft.html
After Hours: $37.11
STATUS: Breakout test. EEFT moved well for us to end June and is now testing that break higher, forming a handle to its 15 week cup with handle base. Nice test of the 10 day EMA (36.62) this week, showing a doji above that level Thursday as volume started back toward average. Strong money flow is holding tough during this test. Solid, and on a move back up on volume it is giving us a new entry point.
Volume: 402.012K Avg Volume: 380.692K
BUY POINT: $37.65 Volume=500K Target=$43.00 Stop=$36.57
POSITION: HSQ KG - Nov. $35c (54 delta) &/or Stock
http://www.investmenthouse.com/cd/eeft.html

Continuing plays ready to move:

ICUI
IDEV
TSAI
VLO

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

AKAM: Nice test of the break higher, holding over the 10 day EMA on low volume and setting up the next run higher.

CCJ: Recovering, holding above the 50 day SMA the past two sessions as it tests. Looked ready to go gangbusters Monday but needed a test. Still building back quite nicely.

FLR: Easing back on lower volume, forming the handle to the base. This will set it up for a nice break higher.

NVDA: Turning down as expected, falling to 20. This is where it needs to hold and form a right shoulder to a potential reverse head and shoulders at the bottom of a potential cup. That is kind of a wing and a prayer, but this is how things start to turn. If it does and breaks back through the 200 day that is our next upside buy.

WM: Starting to form a handle to the pattern.

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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