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Play of the Day (For Tuesday)
Interactive Chart
Monday, March 05, 2001

PHCC - Priority Healthcare Corp. $43.81 +1.31

Sunday's Comment:

Priority Healthcare Corporation is a national specialty pharmacy and distribution company that provides specialized pharmaceutical services for patients with chronic diseases or genetic disorders that require high-cost, complex therapies. This weekend we welcomed PHCC to our list of momentum plays on the heels of the stock achieving a new 52-week high of $43.75 on Friday. Let's back up a bit to the events leading up to the new high. On February 22nd PHCC released their most recent earnings report which came in one cent above expectations. This has been a great year for investors of PHCC, since December the stock has nearly doubled in value; from a mid-December low of $22.69 to Friday's high of $43.75. The only dark cloud hanging over PHCC's new high was the fact that volume came in slightly lower than the average. Normally PHCC trades about 541,000 shares based on a three-month average, but Friday's high was recorded on volume of only 491,000. So going into next week we will look for volume to build as PHCC attempts new highs. Possible entry points might include a bounce off support at $42.00 or a new move higher to $44.00. Additional support exists at the 5-dma at $41.00, should the consolidation area at $42.00 fail. Look for additional support from the NASDAQ Composite Index (COMPX) and the CBOE Health Care Index (HCX.X) when considering starting a new play. We will post a stop loss at $39.00 on this play.

Monday's Update:

Since reporting its quarterly and annual financial results two weeks ago, Priority has moved ahead nearly 13 percent to Monday's close of $43.94. What's more, over the past three months, the company's stock has nearly doubled in price from a December 2000 low of $22.69. Despite this recent strong move forward, we think that Priority could move higher still. The stock's solid intermediate and long-term uptrends are bolstered by a strong MACD and positive On-Balance Volume, which suggests that Priority has the legs to go higher. To that end, with yesterday's $1.31 advance, Priority had a breakaway gap that cleared former resistance at $42.00. As for the downside, the stock appears to have support at its 10-day moving average of $40.67, followed by its most recent consolidation base of $38.00. Traders considering a position in Priority should look for strong volume, 250,000 shares or more traded by noon EST, on a move through yesterday's intra-day high of $44.25 before placing their trades.

Picked on March 4th @ $42.50
Change since picked +$1.31
Stop Loss at $39.00

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