#$thc

[frankzorrilla]

Morning Gap

We are walking into a decent overnight gap higher, I'm not a fan of chasing gap ups nor buying my alerts if they trigger right at the open.  Oil names and miners were the big winners yesterday, we've highlighted a bunch of those name last week here --CHK,CLF,CNX,BTE,WPX,MUR,ECA.  $AR was the big standout from yesterday's list, another oil name, Huge Base Breakout

On my list today; WLB, FOE, WAB, PAH, THC, FEYE, FIVN, SPNC, VNCE, DBD, DDS, TWTR, CENX, SAIA, YELP.

There are 3-5 day long swing set-ups.

I only have an interest if they go through yesterday's high plus a few pennies.

Most of these are tight set-ups, the stops are close by, and it won't be hard to tell when you are wrong.

CHARTS

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at [email protected] or 646-480-7463.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

[estimize]

Last Health Care Providers Reporting This Afternoon, Poised to Benefit from Reform

Two of the last Health Care Provider & Services companies from the S&P 500, Tenet Healthcare Corp. and Express Scripts, are scheduled to report earnings results after today's closing bell. The industry as a whole has put up 29% earnings growth and 14% revenue growth in the fourth quarter.

Tenet Healthcare has an Estimize EPS consensus of $1.20, inline with the Wall Street expectation after a flurry of recent revisions which have lifted the estimate $0.11 in the last week. A result of $1.20 would represent earnings growth of 179% YoY. Revenue estimates remain nearly in-line at around $4.4B. Results for Q4 and 2014 overall are expected to be boosted by the late-2013 acquisition of Vanguard Health Systems, as well as an increased number of insured patients due to health care reform.  

Tenet released some encouraging preliminary Q4 results on January 12. Same-hospital adjusted admissions grew 4.8%, inpatient admissions grew 4.0%, outpatient visits increased 9.5% and paying admissions increased 6.1% year-over-year. Commercial admissions set a quarterly record, with the largest increase in same-hospital commercial growth in more than a decade.

Express Scripts also reports this afternoon, with Estimize EPS expected at $1.39, a penny ahead of the Street and company guidance. This would put earnings growth at 24% for Q4, the third consecutive quarter of double digit growth. Revenues are anticipated to come in at $25.7B, roughly $93M above the Wall Street estimate.  

The nation’s largest pharmacy benefit manager (PBM) has been tightly managing costs as of late. At the end of 2014 Express Scripts entered into an agreement with AbbVie, adding it’s lower priced Hepatitis C drug as the primary option to patients, and removing higher-priced options from Gilead Sciences and Johnson & Johnson. Back in the spring, the company announced layoffs of 1,890 employees and the closings of two Texas facilities, mainly due to lower prescription volume and the subsequent loss of UnitedHealth Group, one of it’s biggest clients. Despite those hardships, the better-than-expected enrollment of 8 million insured lives through public exchanges should help to offset some of the losses in 2014.

[adamhgrimes]

Quantitative screens: relative strength scans

One of the very real problems stock traders face is knowing where to focus their attention. Some traders are restricted to certain sectors or sets of stocks, but, even then, quantitative screens can be a useful first step. For traders who have access to the entire universe of stocks, there are still easily over a thousand candidate names, once we’ve filtered for reasonable volume and a decent amount of trading activity. Where to start?

I’ll write more on this soon, but one useful place to start is with a list of short-term relative strength leaders. At the end of this post you will find a screen that has been very useful to me over the years, both for swing trading and daytrading. Even if you are a longer-term “hands off” investor, it may still make sense to look at a list like this, just to make sure you know what is going on in the market–most people read things about the market and other peoples’ opinions of the market, but we can learn about the market by reading the market itself–valuable perspective, that.

Consider this a starting point for idea generation. For practical trading, I’d go through the list and remove those names that are very overextended (LNKD?), and perhaps put them on another list to watch for trades at a later date. (If the market fails, some of these leaders will offer spectacular shorts. A list like this is not just a shopping list for long positions!) Personally, I’d focus my attention on names that are consolidating (e.g., TREX, TMH, THC–what is it with the T’s??) and perhaps look to buy them on breakouts. Also, you might notice some friends from last week on this list–very interesting to see how things come together.

(If you find a list like this useful, we do publish this list, and several other quantitative screens in my daily research with Waverly Advisors.)

Download (XLSX, 432B)

Quantitative screens: relative strength scans was originally published on Adam H Grimes