I would like to be able to set it to show the tray balloon when a specific contacts goes online, not just all contacts.

If I understand it, this is already possible.
Add nick to your contact list.
right click nick
select notifications
set sound for PM, join,leave

I new I could do those things. i want just the tray balloon to appear when only a specific contact comes online, not everyone in my contact list. as it is now I can set the tray balloon to show when any/all of my contacts go online or no tray balloon for any.

i want to be able to set the tray balloon to show for going online per contact.