Short This Soon-to-be-Ailing Health Care Stock

by Sam Collins | October 10, 2012 1:33 am

Short This Soon-to-be-Ailing Health Care Stock

Community Health Systems (NYSE:CYH[1]) — This owner and operator of 131 hospitals, 63 licensed home care agencies and 30 licensed hospice agencies has been downgraded by several research analysts. On Sept. 21, S&P lowered its rating from a “hold” to a “strong sell,” saying that the stock was overvalued after advancing 65% year to date and trading above their target.

CYH has higher-than-average debt, and revenues for 2013 are expected to be at the lower end of estimates.

Technically, the stock recently fell from a resistance line at $30-$31. Its next support is at the 200-day moving average at $23.66, and if it breaks it, then the target would be the June low of $20-$21.

CYH is on our list of Stocks to Sell in October[2]. It also appears to be a short-sale candidate at the current price. Short-selling is a high-risk, speculative technique, so a stop-loss order should be entered to protect against unlimited losses. Check with your broker for any margin requirements.

10 10 12 cyh 300x214 Short This Soon to be Ailing Health Care Stock
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chart key 300x84 Short This Soon to be Ailing Health Care Stock

Endnotes:
  1. CYH: http://studio-5.financialcontent.com/investplace/quote?Symbol=CYH
  2. Stocks to Sell in October: http://investorplace.com/2012/10/stocks-to-sell-apc-cyh-esi-mos-qlgc-tecd/

Source URL: http://investorplace.com/2012/10/trade-of-the-day-community-health-systems-nyse-cyh-2/
Short URL: http://invstplc.com/1fvGAKR