Press Release Source: Schaeffer's Investment Research
Schaeffer's Market Observation Features Tenet HealthcareMonday August 25, 3:40 pm ET
CINCINNATI, Aug. 25 /PRNewswire/ -- Today's Market Observation features Tenet Healthcare (NYSE: THC - News). Schaeffer's Market Observations are market- based reports that provide insight and analysis from a unique and unbiased perspective. Market Observations are published on www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. To receive a free email notification each time a new commentary is written about one of the featured stocks or any of your favorite stocks, click on the following link. Each new subscriber will receive a FREE copy of Bernie Schaeffer's Options 101 CD-ROM (a $49.95 value). http://www.schaeffersresearch.com/addinfo .
* (Logo: http://www.newscom.com/cgi-bin/prnh/20020725/SCHAEFFERLOGO )One Lonely Stock
On my scan of my favorite sentiment filter in PowerTools, I found only one lonely stock on the list of companies with a Schaeffer's put/call open interest ratio (SOIR) in the lowest 20 percent of all those taken over the past 12 months and trading in the bottom 20 percent of its price readings for the past year. This dubious distinction belongs to Tenet Healthcare (NYSE: THC - News).
The maligned healthcare operator closed Friday at 14.68, a price that is lower than 92 percent of the previous year's closing prices. One year ago, the equity was trading in the 48-50 range, but that was before the October implosion. During that month, the company was announced that it was being investigated for its billing practices. In particular, the SEC and FBI were looking into the way it billed Medicare for procedures.
In the week of October 28 through November 1, the stock dropped from 49.31 to 28.75. THC went on to hit an annual low of 11.32 on July 2, but is now attempting to rally off this bottom. However, the rally is closing in on some potential resistance. On the options front, the stock faces a fairly large discrepancy between its call open interest and its put open interest at the 15 strike. Currently there are 3,312 calls compared to only 537 puts at this strike in the September series. This heavy accumulation of calls could hinder any further rally attempts made by the shares.
In addition, technical resistance can be found at the stock's 10-month moving average, which is currently at the 16 level. What's more, this region also marks a point of former resistance back in 1991 (see the chart below).
Click on the following link to see the Monthly Chart of THC since January 1990 with a 10-Month Moving Average http://www.schaeffersresearch.com/wire?ID=83129 .
>From a sentiment perspective, options players continue to pile into THC calls despite its lackluster technical performance. THC's SOIR checks in at 0.30, as calls are more than triple puts in the front three months of options. This is the lowest of all the readings taken over the past 52 weeks.