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All,
Another up week for my portfolio, this is really getting scary <G>. Of
course, most of the gain was from AOL which now represents more than 1/3 of
my portfolio. It was up about 20 for the week and according to Schwab was
up more in after hours trading Thursday. With AOL joining the S&P 500
Monday we may see another few days of up pressure, but all bets are off
after that. AOL is somewhere in the high 150s or low 160s depending on
whose quotes you believe and I'm currently carrying a target of 203 and a
stop of 125 3/4. That's almost an obscene spread <G>. If I don't hit my
target early in the week, I may cover on any signs of weakness later this
week.
EGGS closed below my stop Thursday, but is close to support. I'll
watch it for signs of an up turn Monday morning. If we don't get it, I'll
close the position Monday afternoon.
I'm fully invested right now, but would like at least one new position
to open if I close AOL and/or EGGS. I searched the HMO and Nursing Home
sector for a suitable fallen angel with good fundamentals and came up with
HealthSouth Corp (HRC).
HRC at 15.4375 is in a Short Term Up Trend Channel (STUTC). Using a
standard deviation (SD) at 2, the top is 18 1/2, using SD at 1 the bottom is
13 1/2. It hit an all time high of 30.81 on 4/20/98 then fell out of bed to
a low of 7.6875 on 10/8/98. It broke out of its Short Term Down Trend
Channel (STDTC) in mid-October. It is still a long way from the top of its
Intermediate Term Down Trend Channel (ITDTC) which is currently just above
27. After the STDTC break out, I constructed the current STUTC from the
10/8/98 low and it has remained in it ever since giving us a well confirmed
channel. I got a MetaStock Tema Binary Wave Composite, QStick buy signal in
early December. The Binary wave and QStick are both barely positive and
rising. All in all, a good pattern. The fundamentals are good with the
price/sales at 1.73, debt/equity at 0.76, profit margin at 38%, and 34%
sales growth. The only down side is flat earnings but that's why it's a
fallen angel. If I open a position, I'll set the initial target just under
the top of the ITDTC at 27 and the stop just under the bottom of the STUTC
at 12 3/4.
JimG
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