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 8, 2001

CVC shares were able to generate a 0.77% gain on the day despite having gapped lower at the open. In fact, the stock ascended to its highest level of the week ($86.75), before falling back to close just below resistance at the 10-dma of $86.46. With that said, we’ll look for this level to offer initial opposition followed by a tougher challenge at the 20-dma of $87.04. Daily volume may need to exceed 575,000 shares to fuel a rally above these levels. As for support, we’ll now look for the stock to find an initial base at the 5-dma of $84.96. Should shares fail to hold at this level, then continue to expect a strong foothold to reside at the 50-dma of $83.24. Consider entry points on sharp bounces off support when confirmed by volume of 250,000 shares or more traded by noon.

Picked on January 19th @ $86.75
Change since picked –0.34
Stop Loss @ $81.00

February 6, 2001

On news of today’s strategic alliance with Princeton Video, CVC shares gave a swift bounce off the 50-dma ($82.81) and reversed course from last weeks fall. Wall Street’s favorable response came as CVC signed a deal that will allow the company to gain full access to Princton’s groundbreaking technologies. As for the stock, today’s sharp 2.12 percent ascent came on heavy buying of 728,200 shares. This type of sharp reversal might be exactly what we need to turn the short-term trend up. Keeping this in mind, we’ll now look for the initial test to come near the $87 mark, bolstered by a convergence of the 10 and 20-dma’s of $86.57 and $86.71. Upper resistance will likely harden at $90. Now, should the stock penetrate this level, we’ll look for one final test to come at the all time high of $91.50, before the stock faces untried ground. Sharp advances through resistance, when followed by good volume of 575,000 shares, will set off our entry signals. On the other hand, should CVC retest support, we’ll look for the 50-dma to be the safety net ahead of our stop at $81. Remember, we will exit this play prior to CVC’s earnings report on February 14.

Picked on January 19th @ $86.75
Change since picked –1.15
Stop Loss @ $81.00

February 4, 2001

A strong increase in customer growth and rising average revenues per cable subscriber continues to attract investors to this established cable provider. Furthermore, the company’s diverse group of entertainment holdings provides investors with a well-rounded set of revenue streams. Despite these good fundamentals, the company did experience a quick pullback today, as traders reacted to news that MGM purchased 20% of Cablevision’s Rainbow Media group for $825 million in cash. CVC made the move because, according to Josh Sapan, president and chief of Rainbow Media, “The deal paves the way for Cablevision to proceed with a tracking stock for Rainbow's national assets.” On the day, CVC shares gapped down in the morning, which lead to further selling throughout the day. CVC fell to our lower resistance level, but did get a nice bounce off the 50-dma of $82.32 before closing at $83.20. A quick move like this is often followed by more short-term volatility, so be prepared for some good intraday swings ahead of our February 7th exit for earnings. Keeping this in mind, we’ll look for the 50-dma to stand as the only remaining support level ahead of our stop at $81. On the upside, the 20-dma of $86.17, bolstered by today’s opening price of $86.10 will likely be the first opposition level. Higher up, CVC could face further challenges at the 5 and 10-dma’s of $87.51 and $87.02.

Picked on January 21st @ $86.75
Change since picked –3.55
Stop Loss @ $81.00