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Begin part 3 of 3

THE PLAYS

Good movers: AAPL; FTO; ILMN; SHOO; TXCO; VTIV; WFR

Monday night play results:
AAPL: Jumped higher but faded some in afternoon.
IAG: Started higher on strong trade but closed off its high.
LMNX: Banged up against the top of the range intraday but then fell back to midrange on the close.
LSCC: Low volume continues as LSCC moves laterally, further working on the handle.
BID: Nice lateral move continues.

New Plays:

Upside:

Play Date: 08/22/2006
COHR (Coherent--$36.06; -0.37; optionable): Lasers, precision optics
http://biz.yahoo.com/p/c/cohr.html
STATUS: Double bottom w/handle. Nice lateral move the past four sessions as COHR consolidates the August run that formed the right leg of its 16 week base. Volume jumped sharply higher Tuesday as COHR showed a tight doji, holding the gains and well above the 10 day EMA (35.26). Positive accumulation and money flow going hand in hand as COHR sets up the next break higher. The leader in its sector. May take another couple of days, but with the volume spike we want to be ready to move in if it starts higher once more from the Tuesday close.
Volume: 569.109K Avg Volume: 255.263K
BUY POINT: $36.74 Volume=350K Target=$43.00 Stop=$35.15
POSITION: HRQ AG - Jan. $35c (59 delta) &/or Stock
http://www.investmenthouse.com/cd/cohr.html

Play Date: 08/22/2006
EBAY (Ebay--$27.42; +0.68; optionable): Internet auctions, etc.
http://biz.yahoo.com/p/e/ebay.html
After Hours: $27.40
STATUS: Test 50 day EMA. After a fairly nasty downtrend January to August, EBAY is showing signs of life. It bounced lower and lower below the 50 day EMA (27.03), but started changing its tune in early August. Last week it finally got the guts to break through the 50 day EMA on some strong trade. It immediately started to test, but held this key support and Tuesday was up off the 50 day on a good jump in above average volume. Looking to pick it up as it continues higher on some strong volume. Want to ride it up to the late June peak at 34ish.
Volume: 20.74M Avg Volume: 19.511M
BUY POINT: $27.96 Volume=28M Target=$33.55 Stop=$26.65
POSITION: QXB AY - Jan. $27.50c (58 delta) &/or Stock
http://www.investmenthouse.com/cd/ebay.html

Play Date: 08/22/2006
RNWK (Realnetworks--$10.69; +0.56; optionable): Internet audio services, etc.
http://biz.yahoo.com/p/r/rnwk.html
After Hours: $10.64
STATUS: Ascending base. SNDK announced some new music players to compete with the AAPL Nano, and that stands to benefit RNWK if successful. The news jumped RNWK higher on strong volume, moving it toward the breakout from its 17 week base that formed making higher lows up the 50 day EMA (10.01). Nice, tight base, and these tend to yield big and fast moves higher. Excellent 6 to 2 accumulation (6 up price weeks on rising volume to 2 down price weeks on rising volume) shows a lot of buying.
Volume: 3.982M Avg Volume: 2.231M
BUY POINT: $10.89 Volume=2.5M Target=$13.25 Stop=$10.18
POSITION: QRN AB - Jan. $10c (65 delta) &/or Stock
http://www.investmenthouse.com/cd/rnwk.html

New buy point on current position:

Play Date: 08/22/2006
WEBX (Webex Communications--$36.72; -0.27; optionable): Web conferencing, etc.
http://biz.yahoo.com/p/w/webx.html
After Hours: $36.74
STATUS: Test breakout. Nice strong move last week allowed us to pocket some quick option gain, and now WEBX is making a low volume test of that move. It is not giving up much ground, a good sign of strength. Tapped at some support at 36 on the Tuesday low on very low volume (that is the highs in the pattern) and rebounded to close just negative. Looking for a bit more testing here toward 36, and then we will step back in when WEBX rebounds.
Volume: 349.309K Avg Volume: 682.306K
BUY POINT: $36.32 Volume=690K Target=$41.95 Stop=$35.35
POSITION: UWB LG - Dec. $35c (58 delta) &/or Stock
http://www.investmenthouse.com/cd/webx.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

AKAM: Nice tap at the 18 day EMA and recovering to hold the 10 day EMA on low volume.

CELG: Sagging back down after failing to take out the 50 day EMA.

MGPI: Strong break higher on solid volume as MGPI comes back to life off of the 200 day SMA test.

MRVL: Cannot buy its way back into the upside.

NVDA: Excellent test of last week's strong move up.

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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