BAX engages in the worldwide development, manfacture and distribution of products, systems and services used primarily in the health-care field. For the 9 months ended 9/30/00, revenues rose 8% to $4.96B. Net income from cont. ops. before accounting change fell 15% to $468M. Revenues reflect growth in the company%s I.V. Systems/Medical products and Renal segments. Net income was offset by the addition of in-process R&D and acquisition costs.

January 2, 2001

Baxter International (BAX) is a global medical products and services company that provides critical therapies for people with life-threatening conditions. The company operates three divisions: I.V. drug delivery systems; bioscience products; and renal care services. Growth in each of its divisions is expected to help the company improve earnings by 13% this year. Currently, the company has 294.14 million shares outstanding with 350 million authorized, not enough for a 2:1 split. However, shares are trading well above their previous split-level of $51.75, which may prompt management to consider a split. In addition, we feel that the chart makes BAX an even more attractive play. After an impressive summer rally, the stock has now resumed a strong uptrend and could be on the verge of another breakout. With that in mind, we’ll look for a close above $90 to signal our entries. Secondary resistance should be a tougher test at the $95 mark. Look to confirm entries when BAX ascends through resistance on volume of 2 million shares or better. However, should the stock consolidate prior to advancing, then look for initial support to come at the $88 mark, bolstered by previous highs and the 5-dma of $87.83. Stronger support should come just lower at $86, braced by the 20-dma of $85.85. We’ll set our stops at $85 to limit risk.

Picked on January 2nd @ $89.63
Change since picked 0.00
Stop Loss @ $85.00

January 4, 2001

Falling sharply through resistance on Wednesday, Baxter hit our firm stop at $85.00. Since the Medical Supplies industry has already had an extended run, it makes trading sense to keep stops below near-term support levels. Although there always remains the possibility for a stock to reverse just under support, it’s a much better trading strategy to take a small loss rather than risking a devastating loss. We’ll keep you posted on future plays.

Picked on January 2nd @ $89.63
Profit/Loss = -4.63 (-5%) (Stopped out Wednesday @ $85.00)
Best Profit = -3.25 (-4%)

January 3, 2001

Dropped, write up to follow.