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CVC - Cablevision SystemsWeek Ended: 1/27/01
Price 85.44 P/E Ratio n/a 52 Week High 91.50
Last Week - 3.25 Earnings Date 2/14/01 52 Week Low 55.00
Picked At 86.75 Date Picked 1/21/01 Sector Services
Activity
Current 85.44 Open 86.50 Change -15/16
Low 84.25 High 86.81 Volume 363,500

ZACKS | NEWS | PROFILE | HISTORICAL PRICES | OPTIONS | D-CHART
Company Description

CVC, a holding company, owns and operates cable television systems, has ownership interests in companies that produce & distribute national & regional entertainment and sports programming services. For the 9 months ended 9/00, revenues rose 14% to $3.17B. Net loss fell 44% to $327.4M. Revenues reflect increased income from Rainbow Media Holdings and higher revenues per subscriber. Lower loss also reflects a $130.8M gain from cable asset sale.

Play Description

January 21, 2001

Cablevision Systems Corporation (CVC) is a major owner and operator of cable television systems. The company owns such cable programming networks as SportsChannel, American Movie Classics and Bravo. The company has projected its revenue growth to come in at 44.20% over the next 3 years. Along with good fundamentals, the recent advance to new all time highs on increased volume has proven to us that CVC has had good institutional buying support. Furthermore, the company currently has 174.69 million shares outstanding and 400 million authorized, enough for a 2:1 split. As for the chart, CVC shares have just recently pulled back from new highs on descending volume, which is often times a pattern commonly seen before shares turn around and resume their climb higher. The stock has also begun to test support near the intermediate high of $85, as witnessed by today’s intraday low of $85.19. The 10-dma of $85.33 also bolsters support at this level and should make it a good initial safety net. Further down, the 20 and 30-dma’s of $83.81 and $82.97 will offer good support ahead of our stop at $81. Let good mid-day volume of 275,000 accompany a quick bounce of either of these levels, prior to opening positions. On the upside, we’ll look for an initial test at the 5-dma of $88.06 to be followed by stiffer resistance at $90. A much tougher challenge will come at the all time high of $91.50. Additional entry points will be signaled when CVC advances through resistance on 555,000 shares or greater.

Picked on January 21st @ $86.75
Change since picked 0.00
Stop Loss @ $81.00

Update

January 25, 2001

Growth in cable subscriptions is proving to be relatively immune to general economic conditions. Consequently, many analysts are now suggesting that a slowing economy would not appreciably affect revenues for the cable industry. The fundamental strength of the cable sector has likely had a lot to do with CVC’s recent stock performance. As for the chart, CVC shares have continued to consolidate over the past couple of days, but are still holding above support at $85. Furthermore, light volume of about 290,000 shares over the past two days indicates that an upcoming advance might still be in the works. However, should the stock consolidate further, we’ll look to the 20-dma of $84.75 to strengthen support at $85. Just lower, the 30-dma of $84.01 offers further support to the $84 mark. Expect to see the strongest foothold come just ahead of our stop at $81, with a previous top and the 50-dma of $81.27 providing strength to this level. On the upside, we’ll look for a close above the recent high of $89 to signal a breakout. However, the true test will come when CVC faces stiffer opposition at the all-time high of $91.50. A close above this level, when followed by good volume of 550,000 shares or greater will trigger the next leg up. With that said, we’ll continue to use support and resistance to initiate our buys/sells ahead of the earnings release on February 7.

Picked on January 19th @ $86.75
Change since picked –0.38
Stop Loss @ $81.00

January 23, 2001

With the build out of two-way capable networks, cable companies like CVC now have more entertainment options at their disposal. With this additional capacity, CVC is expected to rollout multimedia content (sports, music, online games), which will likely have wide consumer appeal. As for our play, CVC shares gave us the first indication of a trend reversal today, as a $1.50 advance came from established support at $86. Although volume did not meet the three-month average, it was still relatively potent at 429,500 shares traded. Testing an intraday high of $89, CVC did see some profit taking ahead of the close, which left shares at $87.69. With this in mind, we’ll now look to the $89 mark for initial opposition. Just higher, we’ll expect recent consolidation near the $90. Just higher, the all time high of $91.50 will hold the final test before CVC breaks into new territory, so we’ll expect a tough challenge at this level. Look for potential entry points when CVC advances through resistance on strong volume of 550,000 shares or better. On the flipside, we’ll look for the intra-day base at $86 to present initial support. Secondary support will be stronger at $85 bolstered by intermediate highs. Let good mid-day volume of 275,000 accompany a quick bounce off either of these levels prior to opening new positions. Remember to keep firm stops at $81 to protect your backside.

Picked on January 21st @ $86.75
Change since picked +0.94
Stop Loss @ $81.00

 


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