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| PLAY > New Plays |
Sunday, December 24, 2000 |
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New Split Plays
None
New Candidate Plays
None
New Momentum Plays
| RHB - Rehabcare Group Incorporated $46.75 (+6.00) |
Rehabcare (RHB) is one of the largest contract managers of hospital-based rehabilitation services in the United States. The services it provides include hospital-based acute rehabilitation, skilled nursing and outpatient programs as well as contract therapy services to nursing homes and medical staffing services. Business has been going well for the company, but even more exciting is the breakout formation on RHB's chart. Friday's advance broke into new territory and set a new all time high ($47.56), which is the reason why we're picking up RHB as a momentum play. A closer look at the chart shows that the stock has a tendency to advance sharply higher when shares break into new highs. Furthermore, we feel that continued weakness across the broader market could send more money into defensive sectors, like healthcare. With that said, we believe that RHB could be on route to test the $50 mark. To reach this level, the stock will likely need the strength of good buying (125,000 shares or better) to fuel a rally. Should this occur, we would look for a tougher challenge to come at the $55 mark. As for support, RHB should encounter a good initial base at $46, which is formed by two intermediate highs. Just lower, the recent high near $45 should provide a good secondary base for the stock. Look for entries when mid-day volume of 50,000 shares can accompany a bounce from either of these support levels. We'll set stops at $42 to protect our backside. For this type of momentum play, we'll let support and resistance determine our entry and exit points.
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