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Begin part 3 of 3

THE PLAYS

Good movers: Not many

Wednesday night play results:
CRAY: Held up well on volume into the close, unlike many stocks.
NGA: Strong volume as it surged but showed a doji to finish the day
NOVN: Gave that move right back but very low volume and actually giving us a better chance to enter.
VLO: Still working on the handle

New Plays:

Upside:

Play Date: 07/20/2006
BW (Brush Engineered--$23.52; +0.52; optionable): Engineered materials for aerospace/defense, telecom, computer, magnetic, optical data storage
http://biz.yahoo.com/p/b/bw.html
Earnings: 7-27-06
STATUS: Cup w/handle. Solid fundamentals growth to go with the nice 14 week base. On 7-11 it upped its guidance, gapping higher on strong volume. It has come back during the selling the past week, filling the gap with a test of the 18 day EMA (21.72) on lower volume. Thursday, a gap higher on strong volume on no real news. Excellent money flow is leading higher, ready to take BW with it. Nice, solid, overlooked but has great sponsorship.
Volume: 762.9K Avg Volume: 321.57K
BUY POINT: $23.89 Volume=482K Target=$28.50 Stop=$22.22
POSITION: BW LX - Dec. $22.50c (68 delta) &/or Stock
http://www.investmenthouse.com/cd/bw.html

Play Date: 07/20/2006
UHS (Universal Health Services--$51.89; +0.67; optionable): Acute care hospitals, ambulatory surgery centers, etc.
http://biz.yahoo.com/p/u/uhs.html
Earnings: 7-28-06
STATUS: Reverse head and shoulders. Big volume and surging to 53.22 on the high, helped by a dividend and share buyback. It gave up two-thirds of the move, but like the 10 week pattern that has formed using the 200 day SMA (49.12) on the low as support; that shows the institutions stepped in to support it at that level. UHS is working its way off the bottom of a base that began in July 2005. It has made higher and higher lows since bottoming in Q4 2005 and Q1 2006. Like this positioning as it gives UHS plenty of upside room if it can make this breakout. Defensive, but able to cover a lot of ground in this pattern and its position in the pattern.
Volume: 932K Avg Volume: 551.744K
BUY POINT: $52.22 Volume=828K Target=$59.95 Stop=$50.69
POSITION: UHS JJ - Oct. $50c (62 delta) &/or Stock
http://www.investmenthouse.com/cd/uhs.html

Downside:

Play Date: 07/20/2006
MAN (Manpower--$59.42; -2.41; optionable): Staffing and outsourcing
http://biz.yahoo.com/p/m/man.html
STATUS: Put. Diving lower on strong volume after bouncing up to test the 50 day EMA this week. It peaked in early May and formed a broad top. It tried to hold the gap up point from mid-April but it is falling now on rising volume. It is ready to fill that gap. A move to the target lands us a 41%ish gain.
Volume: 1.688M Avg Volume: 1.06M
BUY POINT: $59.35 Volume=1.1M Target=$56.75 Stop=$59.85
POSITION: MAN UL - Sept. $60p (-49 delta)
http://www.investmenthouse.com/cd/man.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: Did what it needed to do, and that is gapped above the 50 day SMA (59.50) on those strong earnings.

AKAM: Crash back through the 50 day EMA. Volume was lower, but not sure that will save it.

CCJ: Was on the verge of the break but then fell back through the 50 day EMA in the selling. Holding some support at 38.

GME: From super to goat. Fell back through the 200 day SMA on lower but still above average volume.

NVDA: Trying to cling to some of its gains off of the upgrade and bounce up in the downtrend, but stalled at the 18 day EMA (19.46) Thursday. Needs to step up here.

WM: Similar story as it jumped on Wednesday on volume and sold Thursday on volume. Bounced off the 50 day EMA on the intraday low. Some consolation.

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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