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 13, 2001

Cablevision’s drop ahead of tomorrow’s announcement shows us how quickly earnings jitters can move a stock. Today’s sharp increase in volume, which managed to take out previous support levels, adds further evidence that our exit ahead of earnings could help us to avoid additional weakness. With that said, we feel that better opportunities exist elsewhere.

Picked on January 21st @ $86.75
Profit/Loss = -3.25 (-4%) (Stopped Tuesday @ $83.25)
Best Profit = +3.30 (+4%)

February 11, 2001

Increased demand for digital services and high speed Internet access continues to keep CVC shares in the spotlight and should help to improve total revenues by 15% this year. In addition, sales growth will also be augmented by increased pay-per-view, advertising and commercial telephone rates. As for our play, Friday’s trading session was mainly controlled by the bears, which pushed shares lower by 1.29% to a close of $85.29. Daily volume held under the 3-month average, with 400,800 shares trading hands. This weaker level of volume did not generate enough force to push the stock through support at the $85 mark. The 5-dma, which rests at $85.37, may have helped to add support to this level. Nevertheless, should the stock eventually descend to lower levels, we’ll bank on the fact that secondary support at the 50-dma of $83.43 will remain intact. Look for swift bounces off either of these levels to time your entries when accompanied with good mid-day volume of at least 250,000 shares. However, we think there is still plenty of room on the upside ahead of next week’s earnings report. With that said, we’ll look for initial challenges to surface at the 10-dma of $86.44 and just higher at the $86.87. Upper resistance will likely arise at the $90 mark, bolstered by intermediate highs. We’ll look for entries when CVC breaks resistance on good daily volume of 575,000 shares. Remember, due to the short trigger on our play, these resistance levels might also be good areas to lock in gains. We’ll plan your exits prior to CVC’s earnings report of 2/14, as per our policy.

Picked on January 21st @ $86.75
Change since picked –1.46
Stop Loss @ $81.00