Quest Diagnostics is a clinical laboratory testing company which offers testing services used by the medical profession in the detection, diagnosis, monitoring and treatment of diseases. For the 9 months ended 9/30/00, net revenues increased 86% to $2.58B. Net income before extra. item rose from $13.3M to $76.7M. Revenues reflect the SBCL acquisition and improved operating performances. Earnings benefitted from improved gross margins.

December 3, 2000

Quest Diagnostics is the leading provider of gene-based medical testing equipment, information and services in the US. Shares of DGX traded to an intra-day high of $115 on heavy volume of 831,000 shares. The move comes following news that UBS Warburg chief global strategist Edward Kerschner had added the stock to Warburg’s Highlighted Stocks list. As far a split announcement, DGX has enough shares for a split with 46.2 million shares outstanding and 100 million shares authorized. A split announcement could come at their next BoD or with their next earnings release, expected at the end of January. Until then, support is the 50-dma at $111.06 with additional support at the 5-dma of $109.13. DGX is sitting just below major resistance at $115. A breakout above $115 could send the stock to $119.50, the November 9 intra-day high, before DGX runs into further resistance. Traders should be looking for a bounce off of $111 or a move above $115 on midday volume of at least 350,000 shares to start new plays. Our stops are holding steady at $108 to protect profits.

December 7, 2000

Medical testing service provider Quest Diagnostics bounced back after opening in negative territory on Wednesday. Shares of DGX traded as low as $116.81 early in the session. However, the stock made a huge comeback, hitting an intra-day high of $125.88 before closing at $120.75 on light volume of 352,000 shares. The stock was relatively quiet on Thursday, trading in a tight range on volume of 214,000 shares. DGX is hitting some resistance above $120, so we are getting a bit concerned about the decreasing volume. Going forward, DGX has support at Thursday’s intra-day low of $119.63 with stronger support at $116.81, Wednesday’s intra-day low. Resistance is Thursday’s intra-day high of $122.75 and then $125.88, Wednesday’s intra-day high. A bounce off of $119.63 or a move above $122.75 on midday volume of at least 350,000 shares may be possible entry points. We have bumped our stops up to $116 to protect profits.

Picked on November 26th @ $104.38
Change since picked +15.88
Stop Loss @ $116.00

December 5, 2000

Quest Diagnostics, a provider of medical testing services, took a breather on Tuesday following three days of gains and a 21% move from the low to the high. On Tuesday, shares of DGX dipped to an intra-day low of $118.25 on volume of 321,800 shares. We are not too concerned with the action on Tuesday because the move came on very light volume and the stock remains in a firm upward trend. From a technical perspective, DGX has support at the December 1 intra-day high of $115 with additional support at $113.69, the 50- dma. Resistance is now at the $120 mark and then Monday's intra-day high of $122. Traders may plan to open new positions on a bounce off of $115 or a move above $120 on volume greater than 350,000 shares by midday. We have moved our stops up to $113 to lock in gains.