stock recommendation, stock option

Begin part 3 of 3

THE PLAYS

Good movers: Many

Tuesday night play results:
ECL: Nice break higher on volume.
NUHC: Good volume as it moves toward the breakout
WOOF: Ruff. Strong price move and solid volume on the breakout.

New Plays:

Upside:

Play Date: 07/19/2006
CRAY (Cray, Inc.--$11.59; +0.56; optionable): High performance computer systems
http://biz.yahoo.com/p/c/cray.html
Earnings: Early August
After Hours: $11.70
STATUS: Flying plateau. Nice breakout in late June from a 19 week base that used the 200 day SMA (7.04) as support on the lows of the base. After moving close to 12 on the run it has worked laterally this month, holding the 10 day EMA (10.98) as it does, refusing to give up the gains even as the market sold. That shows a lot of strength much of the market did not exhibit. Strong money flow is leading higher and relative strength is making the breakout. Strong volume surge Wednesday, and looking for CRAY to continue the breakout move from here. That is where we step in.
Volume: 672.653K Avg Volume: 246.841K
BUY POINT: $11.72 Volume=370K Target=$14.00 Stop=$10.90
POSITION: KQQ JB - Oct. $10c (73 delta) &/or Stock
http://www.investmenthouse.com/cd/cray.html

Play Date: 07/19/2006
NGA (North American Galvanizing--$6.91; +1.16; no options): Hot dip galvanizing, etc.
http://biz.yahoo.com/p/n/nga.html
STATUS: Test breakout. This is a stock that has come out of nowhere and is showing a lot of momentum. NGA broke higher in late June out of an 8 week cup with handle base, surging on strong volume to 7.95 on that breakout move. It fell hard in the selling last week coming back to the 50 day EMA intraday and then rebounding. Strong volume Wednesday as it started back up. Strong money flow and positive 2 to 0 accumulation in the base have set up the run higher. Ready to move in on a continued rebound from here.
Volume: 301.9K Avg Volume: 194.744K
BUY POINT: $7.11 Volume=200K Target=$8.65 Stop=$6.61
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/nga.html

Play Date: 07/19/2006
NOVN (Noven Pharmaceuticals--$19.60; +0.90; optionable): Drug delivery systems
http://biz.yahoo.com/p/n/novn.html
STATUS: Cup w/handle breakout. Volume jumped on Tuesday and we looked hard at NOVN. Wednesday it broke out of its 10 week base on continued strong trade. Strong 4 to 2 accumulation in the base shows net buying, setting up the breakout. Relative strength broke out with the price, a very bullish indication. Ready to move in on a continued break higher and then after a successful test we will add to the position.
Volume: 354.175K Avg Volume: 168.966K
BUY POINT: $19.73 Volume=175K Target=$23.75 Stop=$18.42
POSITION: NPQ JD - Oct. $20c (51 delta) &/or Stock
http://www.investmenthouse.com/cd/novn.html

Cannot stay away from this one.

Play Date: 07/05/2006
VLO (Valero Energy--$64.29; +0.44; optionable): Oil and gas refining
http://biz.yahoo.com/p/v/vlo.html
After Hours: $64.35
STATUS: Double bottom w/handle. Still working on the handle to this 12 week base. Solid. Used the 200 day SMA (57.33) on the lows of the legs as support, nice low volume pullback. Used this base to set up for a new all-time high. Held up well in the recent energy weakness, and that will likely lead to the breakout move.
Volume: 8.279M Avg Volume: 10.086M
BUY POINT: $64.75 Volume=15M Target=$78.50 Stop=$62.45
POSITION: ZPY LN - Dec. $70c (49 delta) &/or Stock
http://www.investmenthouse.com/cd/vlo.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: Big earnings after the close is going to gap AAPL up near 60 on the open. The 50 day EMA is at 58.82.

CELG: Nice recovery off the 50 day EMA on rising though still below average volume.

GME: Sweet. Got some volume as it broke through the 50 day EMA.

MGPI: Still working on the base, moving laterally just below the 50 day EMA. Taking its time, setting up the next move.

MRVL: May be trying to bottom here as volume has spiked the past two sessions.

NVDA: Still working higher after the upgrade, continuing the bounce on strong volume and through the 18 day EMA.

WM: Nice. Volume came in as WM broke higher. It closed well off the intraday high, so want to see it back over 46.50 on continued solid trade.

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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