stock recommendation, stock pick

Begin part 3 of 3

THE PLAYS

Good movers: BCSI; GRMN; OPTN; FCX

New Plays:

Upside:

Play Date: 06/11/2007
RATE (Bankrate--$45.49; +3.06; optionable): Online financial and banking service
http://biz.yahoo.com/p/r/rate.html
EARNINGS: Announced 5-2-07
STATUS: Cup w/handle. Strong breakout on strong volume Monday as RATE cleared the highs in the handle to its 21 week base. Beautiful action as it breaks higher inside of a larger 14 month pattern. Excellent break higher, and as it continues we are looking to pick up a partial position (most likely half) and then look for a successful test to pick up additional shares. Monday was a strong move and it may come back some on Tuesday initially to test; if it does and it holds the line and starts to bounce, all the better.
Volume: 874.67K Avg Volume: 478.797K
BUY POINT: $45.85 Volume=500K Target=$54.95 Stop=$42.77
POSITION: QIB HI - Aug. $45c (58 delta) or QIB KI - Nov. $45c (53 delta, 211 OI) &/or Stock
http://www.investmenthouse.com/cd/rate.html

Play Date: 06/11/2007
WAT (Waters Corp.--$61.24; +0.94; optionable): Scientific & technical instruments (Chromatography, etc.)
http://biz.yahoo.com/p/w/wat.html
EARNINGS: Announced 4-24-07
STATUS: Flat base. Volume has picked up sharply the past week on the upside sessions (Wednesday and Monday) as WAT made a test of the 50 day EMA (59.64) and bounced toward the breakout from its 10 week flat base. Strong 4 to 1 accumulation (4 up price weeks on rising volume to 1 down price weeks on rising volume) shows nearly all buying, and the surging money flow corroborates that accumulation. Looking for a continued strong move to step in and pick up WAT as it moves to a new 7 year high.
Volume: 1.42M Avg Volume: 805.073K
BUY POINT: $61.57 Volume=1.2M Target=$70.95 Stop=$59.48
POSITION: WAT HL - Aug. $60c (56 delta) or WAT KL - Nov. $60c (53 delta, low OI) &/or Stock
http://www.investmenthouse.com/cd/wat.html

Downside:

Play Date: 06/11/2007
QQQQ (Nasdaq 100 Trust--$46.82; -0.09; optionable)
http://biz.yahoo.com/p/q/qqqq.html
STATUS: Put. The NASDAQ 100 has a toppy look the past 6 weeks as it moved to a new high but volume did not follow it. Indeed, the Q's gained volume in the recent selling. The Q's rebounded the past two sessions but after moving through the 10 day EMA (46.95) it finished negative as very low volume was not enough to push it. It just about matched the highs three weeks back that has the look of a left shoulder to a potential head and shoulders. Looks ready to fail here and we are looking for a move down to near the February high at 45.50. A move to the target lands a 41%ish gain.
Volume: 97.154M Avg Volume: 113.619M
BUY POINT: $46.72 Volume=115M Target=$45.65 Stop=$47.04
POSITION: QQQ SV - July $48p (-65 delta)
http://www.investmenthouse.com/cd/qqqq.html

Play Date: 06/11/2007
XLU (Utilities ETF--$39.80; +0.52; optionable)
http://biz.yahoo.com/p/x/xlu.html
STATUS: Put. The utilities are under tremendous pressure. XLU collapsed lower in late May, recovered to the 18 day EMA (now at 40.96), and then tanked again, falling through the 90 day SMA (40.16). It rebounded with the market the past two sessions, tapping at the 90 day Monday and then fading back from there. Low low volume on that bounce. Looking for XLU to roll back over here and head down to the February/March lateral consolidation near 38. A move to the target lands a 50%ish gain.
Volume: 9.541M Avg Volume: 5.504M
BUY POINT: $39.75 Volume=1M Target=$38.25 Stop=$40.21
POSITION: XLU SN - July $40p (-50 delta)
http://www.investmenthouse.com/cd/xlu.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.

Need some more input on replacing ISE (buy out), NYX (bomb out), and DRIV.

AAPL, AKAM, CELG, DRIV, GME, GOOG, ISE, MA, PCLN, NVDA, NYX

AAPL: Disappointed in not making the iPhone access to programmers more open. Any excuse to sell, falling to the 10 day EMA on strong volume.

GME: Still setting up for another buy over the 18 day EMA

GOOG: Nice test of the strong move higher. A test to the 10 day EMA (506) and a bounce from there is a new entry point.

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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