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Bearish Play Updates Sunday, November 02, 2003

j2 Global Comms - JCOM - cls: 28.38 chng: -1.22 stop: 31.75*new*

After coming to rest just above critical support at $29 on Wednesday, JCOM looked like the perfect setup for a breakdown play. But just to be on the safe side, we initiated coverage using a $29 trigger, forcing the stock to demonstrate weakness before luring us into taking a position. Thursday's early rebound didn't look good, but we sure liked the way if faded into the close. With a gap below $29 on Friday, the play was triggered to live status and nimble traders could have gotten a favorable entry on the nearly-instant rebound and failure just below $29.50. That rebound didn't have any staying power, and JCOM ended very close to the low of the day. Now that the stock has moved solidly below $29, we'll be looking for a continued slide down to our initial target of $25. Failed rebounds below $30 now look attractive for new entries, while momentum traders can now enter the fray on a break below Friday's $28.25 intraday low. Any weak rebound should now find firm resistance below $31.50, so we're lowering our stop to $31.75 this weekend.

Picked on October 29th at $30.00
Change since picked        -1.62
Earnings Date            1/19/04 (unconfirmed)
Average Daily Volume =  1.71 mln

Link to Current Quote JCOM

WebMD Corp - HLTH - close: 7.79 change: +0.11 stop: 8.51

A volume spike of 156,000 shares in the last five minutes of trading sent HLTH higher, changing what had appeared to be a bearish day into a less bearish one. That volume spike could not carry HLTH over the nearest resistance, however, with that resistance just above $8.00.

HLTH still clings to the 50% retracement of the September 2001 low to the July 2003 high. Oscillators flatten, not hinting at future direction, but the longer HLTH clings to this level, the stronger the chance that it's building a base here from which to rise again. Balanced against that possibility, however, is the resistance that will soon be offered by the many moving averages coursing down toward the current price. The red 10-dma finally caught up with HLTH's prices after the steep declines, with HLTH closing under that average again all this week. We suspect, though, that HLTH may bounce up to meet the stronger resistance offered by its 21-dma, currently at $8.23, or its 30-dma, currently at $8.50.

As we mentioned earlier in the week, conservative traders worried about the potential for a bounce might elect to exit here, while more aggressive traders might hope for a bounce-and-rollover entry or a momentum entry on a fall below last week's low. Conservative traders might alternatively set a tighter stop, perhaps just above the $8.06 level that has been HLTH's high for the last two weeks.

Annotated Chart for HLTH:

Picked on Oct 17 at  $7.93
Change since picked: -0.14
Earnings Date:    11/06/03 (confirmed)
Average Daily Volume:  4.9 million

Link to Current Quote HLTH


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