Technical Look (CSL, MO, VIVO, CAH)

Today, I took an initial position in Cardinal Health, Inc. (CAH) based on a recommendation from my friend at Dividend Inc. Please refer to his posting for some background on Cardinal Health.

Let's get into the technical look for several stocks that I've been following.

Carlisle Companies (CSL).

• 56.45% above 52wk low
• 2.5% yield
• 12.8 P/E
  

I've netted 20% in this position in about two months time frame. Because the stock possess a great technical pattern, it was easy for me to initiate a trade. Refer to my historical post here. The story is that Carlisle broke out of its $22 range, retested that level and never looked back. Today, the stock got as high as $26.29 but closed at $25.97. This action got me feeling bearish about this stock. Let's look at the one year chart below. I drew what's known as the Fibonacci retracement from the peak of $36.37 to the bottom of $16.36. The midpoint (50%) is $26.37, a key level. If Carlisle can break above this range, it will be very bullish for the stock. But for those who bought at breakout of $22.30, you are sitting on 16% gain excluding dividend.



Now, I've draw the same retracement line but from the bottom of $17 to the peak of $26.46. Something extraordinary is present here in the chart. The halfway (50%) is $21.77 ~ $22. This is where I'll be looking to get back if the stock retrace. If it doesn't, I already made 20% in two months.


If you long this stock, I suggest selling it.

Altria Group Inc (MO)

• 17.5% above 52wk low
• 7.4% yield
• 11.39 P/E

I wrote about the the "Ascending Triangle" on my last post. The stock could not hold the range and I am faced with tough decision to make, sell it or hold it. Another indication I use is the 200day moving average line. The stock is currently holding above that range. A hard judgment call has to be made and thus I will stick with what I believe to be a stronger indication, the 200day MA. If the stock break below it, I will sell all my holdings.


Meridian Bioscience Inc. (VIVO)

• 35.84% above 52wk low
• 3.6% yield
• 26.82 P/E
• !!!11.4 short ratio!!!

The stock had a tremendous run since I wrote about it on April 7th. The green arrow indicated my purchase. I didn't sell out of my position because I was comfortable enough to hold this stock through this downturn. Sure enough the stock turned and I am rewarded with some modest gain of 12%.
The stock is approaching its resistance point (blue line) so I'd be aware of that. The short ratio is big so this could be a short covering rally.


If you are long this stock, hold on to it. I am.

Cardinal Health, Inc. (CAH)

• 11.14% above 52wk low
• 2.3% yield
• 9.29 P/E

This analysis will be rather technical so stay with me. MACD is making a lower low while the stock made a double bottom (two blue arrows). I initiated a position today based on the fact that this company has a very strong fundamental, but was punished by the analyst after lowering their earning guidance. The green box shows an above normal selling and yet the stock did not test its previous low. Such strong price action plus amazing fundamental convinced me this is the next stock to own.

Here is some fundamental number behind Cardinal Health. The stock is currently trading at $30.84 or P/E of 9.29. Using the post split out figure from the company, Cardinal Health is trading at P/E of 12.76, below the P/E of 20.28 I have in my model. The dividend payment for 2009 is relatively safe because they are paying out 30% of their earning. My downsides risk is at $27 range.



The market sentiment and news headline may be bad, but stocks discount all future events. Today, we got a none confirmation of the Dow Theory. Yet, I took a position in Cardinal Health because as Charles Dow stated back in 1901 that "Stocks fluctuate together, but prices are controlled by values in the long run"

Art
Disclosure: Long CAH, VIVO, and MO. No position in CSL