TARO manufactures, markets and distributes OTC and prescription pharmaceuticals primarily in the Unites States,Canada and Israel, offering topical corticosteroids and antifungal cream products. For the 9 months ended 9/30/00, net sales rose 20% to $73.8M. Net income increased 70% to $6.5M. Revenues reflect the introduction of new products. Earnings also benefitted from increases in gross margins due to improved manufacturing efficiencies.

January 30, 2001

Taro Pharmaceutical manufactures, markets and distributes corticosteroids, antifungal creams and other over-the counter and prescription pharmaceuticals. Shares of TARO have been climbing over the past nine months after hitting a 52-week low of $7.31 on April 14th. On Tuesday, TARO hit an all-time high of $37, representing a 406% gain from the low. We believe that the stock could be on its way to new highs as we move toward the company’s earnings announcement, expected on February 22nd given today’s break away advance. Going forward, support is the 5-dma at $34.48 with additional support at the 10-dma, currently $32.67. Resistance is Tuesday’s intra-day high of $37 and then possibly $39. Traders may consider entry points on a bounce off of $34.50 or a move above $37 on volume of at least 75,000 shares by midday. We plan to set stops at $32.50 to limit potential losses.

Picked on January 30th @ $36.69
Change since picked +0.00
Stop Loss @ $32.50

February 1, 2001

Taro Pharmaceutical Industries swung wildly on heavy volume during Wednesday’s session. Shares of TARO hit an intra-day high of $38.25 before falling to an intra-day low of $32.50 on volume of 297,000 shares. We were stopped out at $32.50, so we are dropping TARO tonight.

Picked on January 30th @ $36.69
Profit/Loss = -4.19 (-11%) (Stopped Wednesday @ $32.50)
Best Profit = +1.56 (+4%)