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Begin part 3 of 3

THE PLAYS

Good movers: ALJ; CRAY; DADE; NGA; OII; VLO; MAN

Tuesday night play results:
ASH: Gapped higher but fell back to close in its handle on earnings that were not up to expectations
COL: Faded back modestly.
DLLR: Continued higher on lower but above average volume

New Plays:

Upside:

Play Date: 07/26/2006
OPEN (Open Solutions--$28.01; -0.09; no options): Software and solutions to financial institutions (data processing, information management)
http://biz.yahoo.com/p/o/open.html
STATUS: Reverse head and shoulders. Financials are looking better, and as OPEN services them, it is looking really good here as well. Nice 10 week base has formed over the 200 day SMA (25.37), using that support to set up a base to break it to a new all-time high. Strong money flow is leading higher even as price moves laterally; we are looking for price to follow the money. Volume moved up to average Wednesday as OPEN showed a tight doji over the 10 day EMA (27.49). It has put in the time, it has formed the pattern, and now it is ready to open up the breakout (dragged that one in by the heels).
Volume: 209.7K Avg Volume: 243.438K
BUY POINT: $28.35 Volume=365K Target=$32.65 Stop=$27.28
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/open.html

Play Date: 07/26/2006
TWGP (Tower Group--$29.82; +0.13; optionable): Property and casualty insurance
http://biz.yahoo.com/p/t/twgp.html
Earnings: Early August
STATUS: Double bottom. Volume was up but still below average Wednesday as TWGP moved up in its 8 week base formed around the 50 day EMA (28.52). This move follows a nice March through May run that needed consolidating. This base fills the bill. May take a few more sessions to move laterally and form a handle, but we want to be ready to move in if TWGP takes off again on strong volume from this level without any further consolidation. Solid fundamentals match the solid technical pattern. TWGP gave us a nice gain, almost towering, earlier in the year on its run before it formed this base.
Volume: 295.877K Avg Volume: 328.791K
BUY POINT: $30.22 Volume=493K Target=$36.00 Stop=$20.50
POSITION: PTQ JF - Jan. $30c (52 delta) &/or Stock
http://www.investmenthouse.com/cd/twgp.html

New buy point on current position:

Play Date: 07/26/2006
BOT (CBOT Holdings--$118.62; -1.59; optionable)
http://biz.yahoo.com/p/b/bot.html
Earnings: 7-20-06
After Hours: $119.00
STATUS: Reverse head and shoulders. Moving laterally the past week following a strong volume and price move on the earnings on 7-20. Volume has tapered the past two sessions as BOT holds above the 10 day EMA (117.55), setting up the next break higher from its 17 week base. Nicely formed base with money flow surging higher. Excellent action and ready to make the next break higher. A move to the target lands us an 85%ish gain.
Volume: 249.7K Avg Volume: 391.152K
BUY POINT: $121.31 Volume=575K Target=$134.90 Stop=$116.95
POSITION: BOT LE - Dec. $125c (49 delta)
http://www.investmenthouse.com/cd/bot.html

Continuing play ready to move:

Play Date: 07/24/2006
AMX (America Movil--$34.16; -1.15; optionable): Wireless telecom
http://biz.yahoo.com/p/a/amx.html
Earnings: 7-26-06
After Hours: $34.50
STATUS: Reverse head and shoulders. Got nervous ahead of earnings, falling to the 10 day EMA (34.05) as volume jumped higher above average. After hours, however, it reported strong results and was trading near 35. Looking for the breakout on this news. To recap: Strong volume gallop higher last Wednesday, then a modest pullback to end the week, holding the 50 day EMA (33.51). Volume turned back up Monday on rising trade and again on Wednesday, moving toward the breakout from a 10 week base. Strong fundamentals. Looking for volume to jump up as AMX pushes past resistance in the base. Solid run in all of 2005, AMX needed a base to consolidate, and this base is getting ready for another run.
Volume: 6.841M Avg Volume: 5.331M
BUY POINT: $35.72 Volume=6.5M Target=$42.85 Stop=$33.57
POSITION: AMX KG - Nov. $35c (59 delta) &/or Stock
http://www.investmenthouse.com/cd/amx.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: No backfilling as AAPL jumped over the trendline on rising, above average volume. Nice move.

AKAM: Looked like hammered carp Wednesday as it sold on big volume ahead of earnings, but the results were huge and AKAM jumped to 35 after hours.

CELG: Traded flat after hours on the earnings after a nice rally into the number.

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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