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Oxford Health, looking "healthy"

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Oxford Health (NYSE:OHP) $40.25 +3.79% is a name familiar to bullish traders and today's "gap higher" looks like a "break away" gap after the stock generated a "break away" gap in May. It wasn't by chance that we used Oxford Health's chart in this weekend's "Ask the Analyst" column to address a trader's question regarding the "exhuastion gap."

After the company reaffirmed FY03 guidance yesterday, saying it sees EPS in the range of $4.17-$4.27, the stock may look "cheap" on price/earnings ratios. Yesterday, I thought to myself... "this stock looks cheap, why isn't it surging on this guidance?" I guess I just had to wait a day.

Oxford Health (OHP) - Daily Interval

After reaffirming guidance yesterday, shares of OHP look to generate a "running gap" higher today. I'd like to see the stock trade 2 million shares to hint that bulls from the "running gap" are adding to positions with OHP's guidance as they set their bullish objectives higher. While today's trade at $40 now has OHP's initial bullish vertical count hinting at $67, I would think OHP bulls will start out with a price target of $51, just below the June highs. If we were to see OHP get near the $50.00 level and "gap higher" then, that may be the "exhaustion gap" a trader might monitor.

OHP is a component of the HMO Index (HMO.X) 697.67 +1.69%, which is breaking to another all-time high in today's session.

The major market averages reached their highs of the session at the mid-morning hour, but traded back off those levels on news that a suicide bomber blew himself himself up on an Israeli bus in Jerusalem, killing at least 15 passengers and wounding nearly 70. The attack followed several days of Israeli and Palestinian violence.

As this news has been absorbed, the major averages have managed to edge back near their session highs with the Dow Industrials (INDU) 9,105 +0.56% gaining 51 points, while the broader S&P 500 index (SPX.X) 989.29 +0.45% gains 4.5 points.

The NASDAQ-100 Index (NDX.X) 1,630.95 +0.2% shows a fractional gain as does its Tracking Stock (AMEX:QQQ) $30.18 (unch). Weakness in the Semiconductor Index (SOX.X) 374.82 -2% is being partially offset by the Biotech Index (BTK.X) 475.48 +1.88% after bullish comments on the sector by Merrill Lynch and CSFB earlier this morning.

Economic data is light today, with only the Fed's Beige Book due out at approximately 02:00 PM EST. The Fed's Beige Book is a compilation of economic conditions from each of the 12 Federal Reserve districts. While the data are anecdotal and qualitative in nature, the observations given from the 12 districts can swing trader/investor perceptions.

For those interested in reading this report, it should be available at the following link later today. http://www.federalreserve.gov/fomc/beigebook/2003/

Jeff Bailey

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