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Oxford's strong numbers has bulls smiling

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This morning's better than expected earnings from Oxford Health (NYSE:OHP) has bulls in this stock wearing a smile and wondering "bear market, what bear market?" Today, Oxford Health (OHP) reported earnings of $94.3 million, or $1 a share, which included a recognition of $10 million in tax benefits, and a gain of $6.6 million, related to additional recoveries from New York State Market Stabilization pools. Excluding these one-time items, Oxford (OHP) would have earned $0.85 cents a share in the latest quarter.

Oxford Health Plans Chart - Daily Interval

Today's strong earnings may be a surprise to some, but the bullishness depicted in the point/figure chart and bar chart may not be a surprise to bulls in Oxford Health (OHP). Now that bulls have some good news and "confirmation" from earnings, we look for a break of the 50% retracement level at $38.56. We may see some sideways action from $35-$39 for awhile, but that may then give MACD an opportunity to slowly trend lower near the zero level, round out, and then give traders a signal for the next move higher. Support should not be firming at the $34.90 level. OK to play here as bullish, with stops just under the $34.75 level.

HMO Index (HMO.X) Chart - Daily Interval

The HMO.X not only "confirmed" Oxfords move from January 9th, but also confirms the move today as bullishness spills over to other stocks in the group. UnitedHealthcare (NYSE:UNH) traded a new 52-week high today of $75.64 and Tenet Healthcare (NYSE:THC) trades higher by 2.6% at $64.64, not too far from a recent 52- week high of $66.40. Other stocks with a healthcare theme are also doing well with First Health (NASDAQ:FHCC) making a bold move above its 200-day moving average at $26.06 +3.2% and Trigon Healthcare (NYSE:TGH) setting a 52-week high at $76.65 +3.03%.

Technology under pressure

Technology stocks remain under some pressure today as the Wireless Telecom Index (YLS.X) remains near it freshly achieved 52-week lows of $70.33 -5.85% and the North American Telecom Index (XTC.X) is matching the wireless move lower and also at another 52-week low at $670 -4.8%.

Networking stocks as depicted by the Networking Index (NWX.X) traded down 2.97%, after Ciena (NASDAQ:CIEN) traded a new 52-week low after guiding analysts lower on current quarterly revenues and earnings.

As mentioned in previous commentary, the weakness we continue to find in the telecom service side of the telecom business, we're finding that weakness come into the equipment providers on the heels of news that service providers continue to trip their capital expenditure budgets.

Jeff Bailey
Senior Market Technician
Option Investor

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