Additional Trading Ideas:
In addition to tonight's new candidate(s), consider these stocks as possible trading ideas and watch list candidates. Some of these may need to see a break past key support or resistance:
JCI, FB, FXI, NSM, GM, AVT, CRUS, VRSK
PANW, SEAS, TITN,
NEW BEARISH Plays
Community Health Systems - CYH - close: 38.87 change: -0.58
Stop Loss: 40.65
Current Gain/Loss: unopened
Entry on September -- at $--.--
Listed on September 04, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.3 million
New Positions: Yes, see below
Why We Like It:
CYH owns or leases 135 hospitals across the country. The company lowered their revenue guidance in mid July, which explains the big gap down. Then miraculously the stock filled the gap and more with a late July rally (thanks to an up market). Unfortunately the bounce was erased as CYH collapsed during the stock market's August sell-off.
Now CYH has broken down below significant support at its 200-dma and now the $40.00 level. The next stop could be the $35.00 area or possible the $32-30 zone. However, I will point out that CYH does have potential support at a longer-term trend line of higher lows dating back to early 2012. It's possible CYH could bounce in the $36-37 zone on this trend line. Still odds are good CYH trades below this trend.
We are suggesting new bearish positions now, at the opening bell tomorrow morning. We'll use a stop loss at $40.65, which is just above the 10-dma. Our initial target is $35.25.
Suggested Position: short CYH stock @ (the open)
- (or for more adventurous traders, try this option) -
Buy the Oct $37 PUT (CYH1319v37) current ask $1.05