top stock pick, stock split

Begin part 3 of 3

THE PLAYS

Good Movers: FORR; HPOL

Thursday night play results:
LQDT: Also set up to move higher
NICE: Holding the pullback at the 18 day EMA
WFR: Turned back down on sharp trade
GME: Still set up nicely after overcoming that Wednesday flip.

New Plays:

Upside:

Play Date: 10/28/2006
GES (Guess? Inc.--$55.09; -0.90; optionable): Apparel. Forecast 11-1-06
BACKGROUND: No splits in GES' history, but it is at that prime apparel split range.
http://biz.yahoo.com/p/g/ges.html
STATUS: Flying plateau. After a strong break higher to start the month as GES broke out from an 8 week reverse head and shoulders GES has formed a two week lateral move over the 10 day EMA (54.95). Catching its breath, preparing for the second move higher after the breakout from its 7 month ascending base. A very good rest, and when GES resumes its break higher on strong volume there will be no guesswork needed on this one.
Volume: 362.6K Avg Volume: 812.82K
BUY POINT: $56.78 Volume=850K Target=$65.45 Stop=$53.92
POSITION: GES CK - Mar. $55c (54 delta) &/or Stock
http://www.investmenthouse.com/cd/ges.html

Play Date: 10/28/2006
IAAC (International Asset Holding--$28.17; -0.70; no options): Asset management, international securities and commodities
http://biz.yahoo.com/p/i/iaac.html
STATUS: Test breakout. Strong earnings growth rates put IAAC in the top 100 in the market in that respect, and its pattern is excellent as well. Strong break higher Monday through Wednesday and then a nice test to end the week, tapping at the 10 day EMA (27.02) on the Friday low and a nice rebound. Nice 8 week pattern, nice breakout, and nice test. This is the kind of test we are talking about, i.e. a leader coming back to near support to test its breakout. Ready to move in as it turns and continues back up.
Volume: 249.673K Avg Volume: 238.812K
BUY POINT: $28.77 Volume=358K Target=$34.75 Stop=$26.48
POSITION: - Stock (no option chain)
http://www.investmenthouse.com/cd/iaac.html

Play Date: 10/28/2006
MA (MasterCard--$72.64; +0.44; optionable): Credit cards, etc.
http://biz.yahoo.com/p/m/ma.html
EARNINGS: 11-1-06 before the open
STATUS: Flying plateau. A new issue in late May, MA really got its wheels off the July low, making its first run, and it was a strong one. It hit 75 on that move and needed a breather, fading to the 18 day EMA (70.56) and then working laterally the past three weeks on very low volume, consolidating and setting up the next break higher. Strong volume Friday, this one on an upside move, shows it is ready to start the next run.
Volume: 2.674M Avg Volume: 1.576M
BUY POINT: $73.11 Volume=2.3M Target=$8775.00 Stop=$69.94
POSITION: MA DO - Apr. $75c (51 delta) &/or Stock
http://www.investmenthouse.com/cd/ma.html

Play Date: 10/28/2006
STLD (Steel Dynamics--$61.18; -0.41; optionable): Steel and iron
http://biz.yahoo.com/p/s/stld.html
EARNINGS: Reported 10-19-06
STATUS: Double bottom w/handle. STLD was part of the commodities run up through May and after that run needed to consolidate. It is doing so, forming a ranging 6 month pattern, spending the last week forming a lateral handle. May take some more time to form up a bit more, but the metals are on the move and if it breaks higher from here on a return of volume we will look to move in.
Volume: 858.44K Avg Volume: 1.383M
BUY POINT: $62.22 Volume=2.1M Target=$72.45 Stop=$59.95
POSITION: RQL BL - Feb. $60c (60 delta) &/or Stock
http://www.investmenthouse.com/cd/stld.html

Play Date: 10/28/2006
SUPX (Supertex--$44.60; -1.39; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/s/supx.html
STATUS: Breakout test. SUPX exploded higher Wednesday on a strong earnings report, clearing a 6 month cup with handle base. Despite the woes in the chip sector, SUPX has held up well and is indeed one of the top stocks in the market in terms of earnings growth rates and a strong pattern. May come back and test some more; it was quite a surge Wednesday. If it continues higher from here, however, we will look to move in with some positions. On a further test we will let it come back and then pick it up.
Volume: 196.614K Avg Volume: 176.153K
BUY POINT: From the Friday close: $44.88. Test 43.00: 43.55 on the rebound. Volume=250K Target=$52.95 Stop=$42.55
POSITION: SQO CI - Mar. $45c (55 delta, low OI) &/or Stock
http://www.investmenthouse.com/cd/supx.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, CELG, DRIV, GME, GOOG, ISE, MA, MRVL, NVDA, WEBX

AAPL: Coming back to test the 10 day EMA after that strong gap higher on solid earnings results.

AKAM: Had a tough Friday, unable to make any positive hay with earnings. Heading to test the 50 day EMA (45.76) where we want to see it hold.

DRIV: Market seemed to like the earnings, gapping DRIV sharply higher.

GME: Still ready to make the move, recovering nicely Thursday and holding flat Friday.

GOOG: Testing the strong move a bit.

ISE: Filled most of the gap with the test of the 10 day EMA Friday.

MA: Locked and loaded.

MRVL: Showing some life with a high volume gain Friday, but still below the 50 day EMA.

NVDA: Fell back from the early October high at 34 on rising volume. Needs to hold near this level or has some issues.

WEBX: Tried to make a run on earnings but lost its mojo and broke below the 50 day EMA on strong volume.

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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