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Begin part 3 of 3

THE PLAYS

Thursday night play results:
ALXN: Still in the nice test of the breakout move, holding the 18 day EMA.
LVLT: Gapped higher but trade was lower and it could not hold most of its move.
SKX: Tried to continue the move on some decent trade, but it was not the day for it.
AMT: Faded to the 10 day EMA on low, below average volume. Still set to move
SINA: Very nice test at the 18 day EMA

New Plays:

Upside:

Play Date: 12/02/2006
HOLX (Hologic--$49.03; -1.00; optionable): Diagnostic medical imaging systems for women (mammograms)
http://biz.yahoo.com/p/h/holx.html
STATUS: Double bottom w/handle. After a big 2005 move HOLX needed a break and it fell into the current 8 month base. It is now setting for the next break higher. Got a bit rough in November, falling out of the handle but then getting right back into the saddle. Last week it bounced up to the top of the handle and some resistance at 50, fading Friday to test near support at the 10 day EMA. Money flow continues moving higher ahead of price. After this pullback to test near support we are looking for HOLX to deliver a new breakout and start its next run higher.
Volume: 619.792K Avg Volume: 1.054M
BUY POINT: $50.44 Volume=1.5M Target=$60.45 Stop=$47.72
POSITION: QHX CJ - Mar. $50c (53 delta) &/or Stock
http://www.investmenthouse.com/cd/holx.html

Play Date: 12/02/2006
MO (Altria Group--$84.00; -0.21; optionable): Cigarettes, beverages, etc.
http://biz.yahoo.com/p/m/mo.html
STATUS: Cup w/handle. You could also call this a breakout test as MO surged in mid-November on a dismissal of a big jury award. It rallied to 85.55 as it cleared a 12 week base formed after MO broke to a new high in August. Pulling back nicely the past two weeks to test the 10 day EMA (83.73), holding near support and setting up the next break higher. Ready to move in as MO makes the next break higher. Excellent sector as the market faces its long run to this point. When it breaks higher it is likely to have lots of mo-mentum (couldn't think of a rhyme with Altria).
Volume: 6.403M Avg Volume: 11.041M
BUY POINT: $84.62 Volume=14M Target=$98.45 Stop=$82.78
POSITION: MO CQ - Mar. $85c (53 delta) &/or Stock
http://www.investmenthouse.com/cd/mo.html

Play Date: 12/02/2006
NUE (Nucor--$58.64; -1.21; optionable): Steel and iron
http://biz.yahoo.com/p/n/nue.html
STATUS: Breakout test. NUE is working laterally in a 6 week move over the 18 day EMA (58.40), consolidating the strong late October breakout from its 6 month double bottom with handle base that took NUE to a new all-time high. Good lateral move, holding at the 18 day EMA (58.40) Friday. Set up well to make the next breakout and run toward another nue high.
Volume: 4.077M Avg Volume: 4.501M
BUY POINT: $60.27 Volume=6M Target=$71.89 Stop=$57.75
POSITION: NUE DL - Apr. $60c (52 delta) &/or Stock
http://www.investmenthouse.com/cd/nue.html

Play Date: 12/02/2006
WNR (Western Refining--$28.87; +0.55; optionable): Oil and gas refining
http://biz.yahoo.com/p/w/wnr.html
STATUS: Breakout test. A New issue in January, WNR just broke out of its second base of its life, a four month cup with handle pattern. Solid breakout to end November, coming back to tap the 10 day EMA Friday on the low and then moving back up. The new leader in its sector. Looking to move into positions as it continues the breakout. Then we will add to positions on the first test. Love these new issues breakout of solid bases; a rather refined type of play.
Volume: 490.4K Avg Volume: 680.484K
BUY POINT: $29.12 Volume=685K Target=$34.95 Stop=$27.31
POSITION: WNR CF - Mar. $30c (52 delta) &/or Stock
http://www.investmenthouse.com/cd/wnr.html

Downside:

Play Date: 12/02/2006
BER (W.R. Berkley--$35.21; +0.10; optionable): Property and casualty insurance
http://biz.yahoo.com/p/b/ber.html
STATUS: Head and shoulders. After trying to form a 6 month cup with handle base, BER broke down, dumping through the 200 day SMA (35.88) last Monday on a strong surge of volume. After that dump lower it rebounded but on low volume, showing a doji Friday just below the 10 day EMA (35.35). That indicates the rebound is running out of gas. Money flow is diving lower even as the price rebounded. Looking for BER to turn back over and start back down. A move to the target lands a 50%ish gain, and we can bear that.
Volume: 854.6K Avg Volume: 784.6K
BUY POINT: $35.04 Volume=865K Target=$33.50 Stop=$35.41
POSITION: BER MG - Jan. $35p (-43 delta)
http://www.investmenthouse.com/cd/ber.html

Play Date: 12/02/2006
DIA (Diamonds Trust (DJ30)--$122.05; -0.23; optionable)
http://biz.yahoo.com/p/d/dia.html
STATUS: Put. This is the Dow's tracking ETF, and with the struggles DJ30 is showing the past month, particularly the churning Thursday and Friday as it makes a higher low below the November high, it looks ripe for a move lower to the 50 day EMA (120.09). Basically all the reasons in the summary apply to why this play is appealing. We don't want to look for too much of a fall, but a move to the target lands a sparking 44%ish gain.
Volume: 14.517M Avg Volume: 7.65M
BUY POINT: $121.92 Volume=8M Target=$120.00 Stop=$122.21
POSITION: DAW MR - Jan. $122p (-40 delta)
http://www.investmenthouse.com/cd/dia.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

AKAM: Fell to but held the 50 day EMA. This is the lick log where it needs to show us a move.

CELG: Modest Friday move and now it is at the November high. Needs to crush it.

DRIV: Still in the interim toppy pattern. Will likely test the 50 day EMA or even lower to fill that late October gap.

GME: Good action last week considering the market.

ISE: Still set to move up off the 18 day EMA.

MRVL: Still interesting, moving laterally along the 10 day EMA on low volume. Trying to set up the next move.

NVDA: Back to the 18 day EMA on rising, above average volume. Could test the 50 day EMA (33.32). We are looking at selling some December or January $35 strike calls. December sells for $1.45 (UVA LG); January sells for $2.70 (UVA AG). We would buy them back when NVDA tests and holds the 50 day EMA.

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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