CVS is a drugstore chain specializing in prescriptiondrugs, over-the-counter drugs, photofinishing services and film, greeting cards, beauty & cosmetics, convenience foods and seasonal merchandise. For the FY ended 12/30/00, net sales increased 11% to $20.09B. Net income applicable to Common increased 18% to $731.4M. Revenues reflect increased same store pharmacy sales. Net income benefitted from improved gross margins.

February 18, 2001

CVS Corporation is one of the largest retail drugstore chains in the US with 4,114 retail drugstores across the country. The stock hit a 52-week low of $27.75 on March 8th during the height of the NASDAQ madness. Since then, investors have been moving money into profitable “safety” stocks, such as CVS. On Friday, shares of CVS hit an all-time high of $62.20, representing a 124% gain from the low. Friday’s breakout took out the old high from December 29th and we believe that it could move even higher as the NASDAQ continues to search for a bottom. The MACD is positive and the RSI is indicating that CVS has a long way to go before becoming overbought. Going forward, CVS has support at Friday’s intra-day low of $60.30 with stronger support at $59.29, the 10-dma. Resistance is currently at the all-time high of $62.20. Heavier resistance may come in at the $65 mark. Traders may consider entry points on a bounce off of $60.30 or a breakout above $62.20 on midday volume of at least 1.4 million shares. We plan to place stops at $57 as downside protection.

Picked on February 18th @ $61.59
Change since picked +0.00
Stop Loss @ $57.00

February 22, 2001

CVS Corporation gapped down on Wednesday following a strong CPI number. The stock hit an intra-day low of $59.40 before making a small comeback to close at $59.58 on volume of 3.35 million shares. Our stops were triggered at $60, so had to drop CVS on Wednesday.

Picked on February 18th @ $61.59
Profit/Loss = -1.59 (-3%) (Stopped Wednesday @ $60.00)
Best Profit = +2.16 (+4%)

February 20, 2001

CVS Corporation, a leading retail drugstore chain, continued to move higher on Tuesday. Shares of CVS hit an all-time high of $63.75 early in the session. Unfortunately, the stock pulled back on an earnings warning from Duane Reade (DRD), an Northeast drugstore change. The stock ended the day at $61.99 on volume of 2.84 million shares. Hopefully, the DRD news will not have any lasting effects on CVS. On the technical side, CVS has support at Tuesday’s intra-day low of $61.70 with additional support at $60.35, the 5-dma. Resistance is the all-time high of $63.75 and then possibly $65. A bounce off of $61.70 or a breakout above $63.75 on midday volume of at least 1.4 million shares may be potential entry points. We have bumped our stops up to $60 in the event of a momentum reversal.

Picked on February 18th @ $61.59
Change since picked +0.40
Stop Loss @ $60.00