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Coventry Hlth Care - CVH - close: 69.52 chg: +0.93 stop: 66.99

Company Description:
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 Rico. (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.

Suggested Options:
We are suggesting the June calls.

BUY CALL JUN 65.00 CVH-FM OI=241 current ask $6.10
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
 

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