us stock market, stock recommendation

Begin part 3 of 3

THE PLAYS

Good movers: AKAM; BWS; CMG; COH; NVDA; NUE; TIE; UTSI

Monday night play results:
AEOS: Tried to continue the move but had no will behind it.
BAMM: Gapped higher, couldn't hold it on low volume.
BEAS: Slipped back on lower volume after the strong Monday break higher
CMG: Jumped higher but volume was light even though it was coming in strong late in the session.

New Plays:

Upside:

Play Date: 10/24/2006
ATHR (Atheros Communications--$20.90; +0.91; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/a/athr.html
EARNINGS: Announced 10-23-06 after the close
STATUS: Test 200 day SMA. ATHR is in a 7 month cup with handle base of sorts, fading back to the 200 day SMA (20.10) the past week, holding that level Monday, and bouncing Tuesday after its earnings results. It gave back a chunk of the move, but has set up this nice pattern, and importantly, it didn't sell off, instead holding its nice pattern. Looking for ATHR to continue higher from here and give us our buy point.
Volume: 6.682M Avg Volume: 2.704M
BUY POINT: $21.45 Volume=4M Target=$27.50 Stop=$20.05
POSITION: QRA CD - Mar. $20c (64 delta) &/or Stock
http://www.investmenthouse.com/ci/athr.html

Play Date: 10/24/2006
BEAV (BE Aerospace--$24.46; +0.25; optionable):
http://biz.yahoo.com/p/b/beav.html
EARNINGS: 10-30-06 before the open
STATUS: Double bottom w/handle. Sweet lateral move the pat week, working over support at 24 as the 10 day EMA (23.87) rising to meet it this week. After a solid 6 month base, this looks like the little shakeout that is finally going to send it higher for the breakout and run higher. Strong money flow is up ahead of price. Looking for that break higher to move into the play.
Volume: 620.704K Avg Volume: 939.767K
BUY POINT: $25.26 Volume=1.4M Target=$29.00 Stop=$23.75
POSITION: BQV AE - Jan. $25c (54 delta) &/or Stock
http://www.investmenthouse.com/ci/beav.html

Play Date: 10/24/2006
CVD (Covance--$65.87; -0.37; optionable): Drug development services
http://biz.yahoo.com/p/c/cvd.html
EARNINGS: 10-25-06 after the close
STATUS: Test 50 day EMA. Taking another look at CVD right before its earnings. It broke out from a 4.5 month base in early September, rallying to 68 on the move. It has come back to the 50 day EMA (65.15) the past 5 weeks on low, slow volume. It is holding the 50 day EMA and just above the tops of the prior base. A market leader on all fours, showing a doji Tuesday that tapped the 50 day EMA on the low and rebounded to flat on rising though still slightly below average volume. Looking for a strong break higher to move in, and we will look at some positions ahead of the earnings report that is Wednesday after the bell.
Volume: 283.5K Avg Volume: 367.326K
BUY POINT: $66.88 Volume=450K Target=$74.95 Stop=$64.92
POSITION: CVD AM - Jan. $65c (59 delta) &/or Stock
http://www.investmenthouse.com/ci/cvd.html

Play Date: 10/24/2006
IWM (Ishares Russell 2000--$75.90; +0.15; optionable)
http://biz.yahoo.com/p/i/iwm.html
STATUS: Cup w/handle. IWM is working on the 2 week handle to its 6 month base, fading back to the 10 day EMA (75.46) and holding that level on low volume this week. As we have noted, the small caps are forming up well for a breakout. We are just going to wait and let it break higher on volume. Our buy point is a bit aggressive, but if the volume is there we are ready to move in. A move to the target lands a 50%ish gain.
Volume: 30.507M Avg Volume: 45.353M
BUY POINT: $76.15 Volume=55M Target=$79.25 Stop=$75.25
POSITION: IOW AW - Jan. $75c (62 delta)
http://www.investmenthouse.com/ci/iwm.html

Good Investing!
Jon L. Johnson and your IH Alerts Team

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 in 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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