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TEAM TRADES

OSSI: We jumped on OSSI when it moved off of the 50 day MVA in late January, getting a nice but brief pop on it before it sold back over February and came back to rest at the 50 day MVA once again. We were looking for a bounce again, and Monday saw it move up from a doji right on the 50 day MVA with a nice volume gain. We were ready for it today when it continued that move. Now there was some resistance at 24.20, and in an ideal world we wanted it to clear that resistance on stronger volume. The stock started out like a ball of fire, rallying up to 24 in the first half hour, but we were not chasing as we thought the overall market would have to come back after any move higher. Right after the release of the ISM services, OSSI, started back, falling to 23. It found support there and then rallied over the next hour to our buy point at 25.25. Volume was good. It then pulled back to test the move again, but held at 23.80 and started back up. It stopped again at 24.20, backed down, made a higher low and started back up. Looked like an ascending wedge forming intraday. It broke back over 24.25 and we jumped in with a stock purchase. The breakout did not hold and it spend the next 2.5 hours edging back down. It made an abrupt drop to 23, but in the last half hour bounced back up to close at 23.50. After hours some higher trades came in near 24; we will see what happens. Volume was very good on the session. The one regret we had is that we did not move in sooner on the bounce off of the 50 day MVA. We saw the good bounce start Monday and could have come in a bit earlier.

THE PLAYS:

Reading the Plays: Please note that when we reference the 10, 18, and 50 day moving averages (MVA), those are exponential moving averages (EMA). The 200 day moving average is always simple (SMA). We will note when we reference a particular MVA differently, e.g., a simple 50 day MVA. Please click on the Yahoo and chart links for company and charting information. A "prior high" refers to the high at the start of a base.
For conserving space on listings of stop losses, the symbol (7%) indicates that the stop is 7% below the buy point.

Good movers: PPD, SIMG (now beyond 5% of the buy point in the wedge breakout). ODP cleared the flying plateau pattern on strong volume today after hitting the buy point on the 28th.

Targets hit Monday: SBGI (12.50)
Stop Advisory: INOV (2.18)

Stocks/Indexes from the Monday report:
PENN: Made the drop for the covered call play, tapping the 18 day MVA on the low. Volume still high but lower; will watch for a bounce back up from here. The 18 day is our target, though we noted last night PENN might make it to 33.
HRLY: Pulled back on lower volume, showing a tight doji after Monday's breakout move. This could be just a breather before heading higher again.
PPD: Nice breakout over the February highs, as the stock continued the 18 MVA bounce.
SSRI: Still tight in the ascending wedge.
DGX: Moved to within a few cents of the buy point in the handle, but pulled on continued strong volume with a doji and a slight gain ($0.29). Deflated Monday's exciting move.

Continued plays:
Covered call:
HRB: Moved lower today, closing at the 10 day MVA on lower volume (fell back just under average). If it gives a bounce back from here, we will be ready to buy back the calls. We are looking for a drop to the 18 day MVA at the 48.50 level if it does not hold.

Other continued plays:
NBTY: Falling below support (18 day MVA) in the ascending wedge pattern (covered since 2-07).
RPM: Sold back to the 18 day MVA in an ascending wedge pattern; if it can hold here (volume was still below average though rising) the pattern will have a chance.

Best Plays:
1) LUX: Nice pullback on low volume.
2) ESE: Looks ready for a breakout.
3) INVN: Moving up in an ascending wedge.
4) BBX: Another low-volume pullback.

New plays:

LUX (Luxotica Group--$17.98; +0.03; optionable): Health Services
http://biz.yahoo.com/p/l/lux.html
STATUS: Testing the breakout from a 13-week ascending wedge the stock formed in its 7-month shallow cup (that has the September dip). LUX is now testing the breakout, which took it over the previous highs in the base (18), holding in a three-day lateral move above support (17.75). Volume has been falling, and Tuesday was below average at 139,900 (avg. 234,136) with the stock showing a tight doji. We are looking for a strong move up after the test! Money flow is decent, and steadily rising. Target: 22
BUY POINT: Aggressive: 18.25 on volume of 250,000 or higher. Stop Advisory (7%): 16.97
POSITION: Stock and/or July $15 calls to buy (LUX GC).

http://www.investmenthouse.com/cd/lux.html

Trades on less than 100,000 average daily volume:

ESE (Esco Technologies--$38.00; +0.02; no options): Aerospace/Defense
http://biz.yahoo.com/p/e/ese.html
STATUS: Looks ready to try a move off of its 18 day MVA (37.30) after making a good bounce run from the 50 day MVA that started early February. The stock ran up 7 points with that action, and at the top began a lateral pullback that for now has found support at the 18 day. In the last 8 days the pattern is a pennant, that is tightening up nicely until showing a near perfect doji Tuesday (opening, closing and intraday highs are at 38; the low was 37.90). Volume started building yesterday, and spiked Tuesday with the very short intraday range shown, so we are looking for the stock to break higher from here (volume 61,400; avg. 43,000). Outstanding money flow, decent buying. Target: 45
BUY POINT: Aggressive: 38.45 on continued rising volume. Stop Advisory (7%): 35.76
POSITION: Stock.

http://www.investmenthouse.com/cd/ese.html

Updates:

INVN (Invision Tech--$42.75; +1.80; optionable): Scientific & Technical Instruments
http://biz.yahoo.com/p/i/invn.html
STATUS: Covered previously in the short cup with handle earlier this year. INVN has formed an ascending wedge above its 50 day MVA (supporting the lows in the pattern, currently at 35) on low volume. The pattern formed at the top of its breakout (mid-November through mid-December) from a 6-week flat base that sent the stock to the December high at 47.09. INVN, on a stronger surge in volume Tuesday, moved up from support at the 40 level (10 day MVA). Looking for a continued move up into a breakout. The stock shows good money flow and buying. Volume strong at 2.9 million (avg. 2.8 million). Target:
BUY POINT: Aggressive: 44.50 on continued rising volume. Stop Advisory (7%): 41.39. For breakout, 47.09 on volume of 3.8 million or higher. Stop Advisory (7%): 43.79
POSITION: Stock and/or July $40 calls to buy (FQQ GH).

http://www.investmenthouse.com/cd/invn.html

A couple of good-looking financials that we still like:

HARB (Harbor Florida--$19.68; +0.10; no options): Savings & Loan
http://biz.yahoo.com/p/h/harb.html
STATUS: In the tightening pennant pattern at the upper right side of its 6.5-month cup base, with highs right at prior ones in the base. Volume is quite low in the pennant (11,200; avg. 42,000) as it has been for seven days now, and the pattern is shaping up nicely. Looking for a breakout over highs at the 20 range. Target: 24
BUY POINT: 20.10 on volume of 57,000 or higher. Stop Advisory (7%): 18.69
POSITION: Stock.

http://www.investmenthouse.com/cd/harb.html

BBX (Bankatlantic--$11.18; +0.03; optionable): Savings & Loan
http://biz.yahoo.com/p/b/bbx.html
STATUS: BBX tried a breakout from the ascending wedge it formed at the top right of its 6.5-month cup, but the move was just short and the stock pulled back to the 18 day MVA as of Monday and Tuesday, opening there today (11.05) and making the small gain. Volume is looking pretty good on the pullback; it was high on some Friday selling but dropped off right away Monday, continuing to fall today to 85,900 (avg. 227,000). Looking for the stock to use the low volume and support as a springboard for a stronger move. Money flow is excellent. Target: 14
BUY POINT: 11.58 on a strong rise in volume 116,000 or higher. Stop Advisory (7%): 10.77
POSITION: Stock and/or May $10 calls to buy (BBX EB).

http://www.investmenthouse.com/cd/bbx.html

PORTFOLIOS: Each report, we look at these to see which is in a buy position. We don't cover them all each time, just the ones that look ready to pick up a few shares.

THE LEADERS: DGX, FRX, LLL, MIK, BMET, APPB, IGT.

IGT ($66.25; -3.84): Got stronger volume but the stock sold back to the 18 day MVA. If it keeps selling, the 50 day MVA is below at 65, at the level of the up trendline (September and February lows). No news on the selling.

BMET ($29.42; -1.66): Tanked on news of an FDA warning about sterility of products made in one of its plants in Wales. Volume was huge on the selling, but the stock held support at the up trendline for a bounce (the trendline connects September and December closing lows). Still a sell point, since it broke the 200 day MVA.

UP & COMERS PORTFOLIOS: BBBY, SRCL

BBBY ($31.98; -2.23): Got a downgrade and perhaps news that the company was acquiring Harmon Stores was not swallowed well. Big volume but the stock bounced back and remains above the 200 day MVA though below the 50 day. A sell if it cannot recover back over quickly.

MEMBER PORTFOLIO: CSCO, SEBL, EMLX, BRCM, HDI, BRCD, BUD, AMGN, WMT, ORCL, HB, NOC

WMT ($60.76; -2.22): Was in a 4-day lateral move that ended Tuesday, when the stock sold down to the 18 day MVA on strong volume. No specific news, but the retail sector took a hit on changing sentiment because of their success.

BRCM ($40.50; +2.50): Nice recovery the last three days as the stock rallied back over the 50 day MVA Tuesday. Sold back to $39.80 after hours, still holding above the 50 day MVA.

NOC ($103.95; +0.45): Held up with a doji, not increasing Monday's loss but still below the 50 day MVA. That trendline may just hold it (see last night's report for description).

HB ($57.93; -1.50): Fell out of the pennant pattern; too bad, it was a nice one. The stock broke its 18 day MVA but volume was low still (just higher), and HB held the 50 day MVA. Looking for that to support it (the intraday low hit the 50 day MVA simple at 57.47, which bounced HB back up). No news.

BUD ($49.46; -0.44): Has pulled back the last three days (some profit-taking with volume high). Look for a hold at the 18 day MVA (49.13).

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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