New Plays, Saturday, 05/07/2005
New Option Plays
by OI Staff
HAVING TROUBLE PRINTING?
Call Options Plays
Put Options Plays
Coventry Hlth Care - CVH - close: 69.52 chg: +0.93 stop: 66.99
Coventry Health Care is a national managed health care company based in
Bethesda, Maryland operating health plans, insurance companies,
network rental /
managed care services companies, and workers' compensation services companies.
Coventry provides a full range of risk and fee-based managed care products and
services, including HMO, PPO, POS, Medicare Advantage, Medicaid, Workers'
Compensation and Network Rental to a broad cross section of employer and
government-funded groups, government agencies, and other insurance carriers and
administrators in all 50 states as well as the District of Columbia and Puerto
(source: company press release)
Why We Like It:
We have had our eye on CVH as a bullish candidate for days but we wanted to wait
until after the company reported earnings. CVH turned in its Q1 report on May
3rd and beat Wall Street's estimates. The company also guided higher for the
next quarter. Technically the stock is bullish with a strong up trend. CVH has
been slowly consolidating higher along its rising trendline of support for the
last three weeks but we
suspect this is a pause by investors waiting for the
earnings report. CVH's P&F chart has produced a bullish triangle breakout but
the target is only $72. We suspect that this time CVH will surpass its P&F
target. We suggest readers use a trigger at $70.51 to confirm the breakout over
the $70.00 level. Our short-term target will be the $74.75-75.25 range.
We are suggesting the June calls.
BUY CALL JUN 65.00 CVH-FM OI=241 current
BUY CALL JUN 70.00 CVH-FN OI=206 current ask $2.85
BUY CALL JUN 75.00 CVH-FO OI=102 current ask $1.05
Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/03/05 (confirmed)
Average Daily Volume = 973 thousand