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 10, 2000

Quest Diagnostics is a leading provider of medical testing services. The stock traded to an intra-day high of $125.94 on volume of 382,000 shares during Friday’s session, following two Bush victories in the Florida courtrooms. Unfortunately for the stock, Al Gore won a major case in the Florida Supreme Court after the bell on Friday so we may see some selling on DGX Monday morning. DGX appears ripe for a split with the stock trading well above $100/share and with enough authorized shares for a split. However, DGX has no split history so an announcement could come at their next BoD or with their January earnings release. From a technical perspective, DGX has support at the 5-dma, now up to $120.61 with additional support at $118.25, the December 5 intra-day low. Resistance has moved up to Friday’s intra-day high of $125.94 and then $133, the October 20 intra-day high of $133. Traders may consider entry points on a bounce off of $120.61 or a move above $126 on volume greater than 300,000 shares by midday. We have moved our stop up to $118 in accordance with our current conservative trading style and to lock in gains.

Picked on November 26th @ $104.38
Change since picked +19.13
Stop Loss @ $118.00

December 21, 2000

Quest Diagnostics ran into some selling pressure on Wednesday along with the rest of the market. The stock fell to an intra-day low of $115.63on light volume. Our stops were triggered at $118 so we are dropping DGX tonight.

Picked on November 26th @ $104.38
Profit/Loss = +13.63 (+13%)(Stopped out Wednesday @ $118.00)
Best Profit = +25.25 (+24%)

December 19, 2000

Quest Diagnostics, a leading provider of medical testing services, continues to consolidate in the $120-$130 range on light volume. On Tuesday, shares of DGX fell below the 10-dma, hitting an intra-day low of $121 on volume of 294,000 shares, half of the average daily volume. We have become concerned with DGX because it closed below the 10-dma for the first time since November 29th and it could signal a reversal. For now, support is the December 15th intra-day low of $120.31 with additional support at the December 11th intra-day low of $118.50. There is resistance at the 5-dma, currently at $125.81 and then $128, Monday’s intra-day high. A bounce off of $120.31 or a move above $125.81 on midday volume of at least 300,000 shares may be possible entry points. Our stops remain steady at $118 to lock in gains.

Picked on November 26th @ $104.38
Change since picked +17.88
Stop Loss @ $118.00

December 17, 2000

Medical testing service provider Quest Diagnostics has been consolidating in the $120-$130 range for the past two weeks. SG Cowen initiated coverage of DGX with a "Strong Buy" rating on Friday morning. However, the new coverage was not enough to move the stock out of its trading range. Shares of DGX hit an intra- day high of $127.94 on volume of 496,000 shares. We have been impressed with the movement in DGX, as the stock continues to trend higher in a generally weak market. DGX is currently in split territory. The shares are trading above the century mark and the company has enough shares for a split, so an announcement could come out of their next BoD or with the quarterly earnings report in January. Going forward, support is the 5-dma at $125.61 with stronger support at $123, just below the 10-dma. Resistance remains at the December 12th intra-day high of $128.63 and then $130. Traders may consider starting new plays on a bounce off of $125.61 or a move above $128.63 on volume greater than 300,000 shares by midday. We are keeping our stops at $118 to protect profits.

Picked on November 24th @ $104.38
Change since picked +23.13
Stop Loss @ $118.00