WellCare Health Plans, Inc. - WCG - close: 30.03 change: -0.07

Stop Loss: 29.40
Target(s): 33.75, 37.75
Current Gain/Loss: unopened
Time Frame: 10 to 12 weeks
New Positions: Yes, see trigger

Company Description:
WellCare Health Plans, Inc. provides managed care services targeted to government-sponsored health care programs, focusing on Medicaid and Medicare. Headquartered in Tampa, Florida, WellCare offers a variety of health plans for families, children, and the aged, blind, and disabled, as well as prescription drug plans. The Company served approximately 2.2 million members nationwide as of September 30, 2010 (source: company press release or website)

Why We Like It:
WCG has spent the last three months consolidating in the $27.50-30.00 range. Now the stock is on the verge of breaking out higher. Aggressive traders could buy the afternoon bounce today. I would rather see a little more confirmation first. I'm suggesting a trigger to open bullish positions at $30.75. If triggered we'll use a stop loss at $29.40. It could take several weeks before we see WCG hit our targets. Investors will have to decide whether or not they are willing to take the risk of holding over WCG's earnings report in late February.
FYI: The Point & Figure chart for WCG is bullish with a $41 target.

Trigger @ 30.75

Suggested Position: WCG stock @ $30.75

- or -

Buy the 2011 March $35.00 calls (WCG1119C35) current ask $0.55

Annotated chart:

Entry on January xx at $xx.xx
Earnings Date 02/17/11 (unconfirmed)
Average Daily Volume: 410 thousand
Listed on January 4th, 2010