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.

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

February 1, 2001

CVC is anticipating its leading edge technology to produce a 19% improvement in this year’s revenues. Furthermore, the recent sales of Adelphia Communications for $1.5 billion is expected to strengthen Cablevision’s balance sheet and provide needed capital for the development of its remaining cable holdings. On Thursday, the stock fell back into consolidation, but managed to do so on light volume of 412,200 shares. A quick glace at the daily chart shows that this type of price behavior is common for the stock just before shares run higher. So, if CVC shares can repeat this trend, then we’ll look for the recent high of $90.05 to hold the initial opposition. Upper resistance will likely then come at $95 and $100. We’ll look for potential entries when the stock can penetrate resistance on good volume of at least 550,000 shares. However, should the stock instead turn on strong selling, then look for support to be tested at the 10-dma of $87.37. Should further selling occur, we’ll look to the 50-dma of $82.20 for our strongest support base. Continue to keep firm stops below support at $81 to protect your backside.

Picked on January 19th @ $86.75
Change since picked +1.14
Stop Loss @ $81.00

January 30, 2001

Shares of CVC were given a strong lift on Monday, as Merrill Lynch had good things to say about the company on its month end recommendations report. Merrill stated, “We strongly reiterate our Buy rating and $113 price objective based on 18x our current year cable estimates, an increase of 32% above current levels.” The company went on to state that CVC is the least expensive cable stock, trading at 2.3 multiple points below the group average (13.9x vs. 16.2x average). On Tuesday, CVC shares opened lower and fell to an intraday low of $86.75, but a late day rally helped the stock recover the majority of its losses. This strong recovery was also accompanied by strong daily volume of 1,610,000 shares, which could set the stage for higher prices through the remainder of the week. With that in mind, we’ll look for our first challenge to arise at the all- time high of $91.50. Secondary resistance will likely follow at the $95 mark. Look for quick runs through resistance to trigger our entries when daily volume can meet or exceed the three-month average of 542,000. For support, we’ll look for the initial foothold to come near $87.50, bolstered by a convergence of the 5 and 10-dma’s of $87.50 and $87.44. The $85 should provide a better line of defense, strengthened by previous tops and the 20-dma of $85.34. Further down, we’ll look to the 50-dma of $81.89 for the last safety net ahead of our stop at $81. Use sharp bounces off each of these support levels for potential entry points. We will exit this play no later than the February 14 earnings release.

Picked on January 21st @ $86.75
Change since picked +2.45
Stop Loss @ $81.00

January 28, 2001

The rapid adoption of digital cable into the home is expected to help CVC generate a 15% increase in revenues this year. Furthermore, high-speed, always-on connections via the cable modem are a key ingredient to CVC’s competitive strategy in the year ahead. Finishing the week with a consolidation pattern, CVC has continued to trade mostly flat to lower over the past several days. However, the current consolidation pattern has also been accompanied by light volume of about 290,000 shares, which is a good indication that selling pressure may be easing. Furthermore, shares have held above their previous top at $85, which also gives us confidence that selling pressure is light. However, should CVC retrace further we’ll look for secondary support to arise at the 30-dma of $84.17. This level has already proven it’s significant by supporting today’s intraday decline. Lower support levels should be stronger at $81.50, bolstered by the 50-dma at $81.45. On the upside, we’ll continue to look for initial resistance to come at the 10-dma of $87.29. Higher up, we can expect Tuesday’s high of $89 to present the next test. Upper resistance should prove to be more of a hinderence to achieving new highs. The all time high of $91.50 will be the last hurdle for the century mark. With that said, we’ll look to time entry and exit points around support and resistance levels, ahead of the 2/7 earnings release.

Picked on January 21st @ $86.75
Change since picked –1.31
Stop Loss @ $81.00