Trade of the Day: Long ASMG - 12/16/13

Long

AmSurg Corp (AMSG)

Monday, December 16, 2013

Company Symbol Industry Rating YTD % Gain Target Stop AmSurg Corp AMSG Health Care Facilities 9.6 +53.44% $48.30 $45.68 The markets are moving higher, but this week brings a handful of potentially big drivers front and center before the holidays arrive. Most importantly, perhaps, is the FOMC Meeting which runs Tues-Wed. Traders are expecting a clearer indication of the timetable for the Fed's taper, which could impact stocks in a big way. If the recent lackluster data is enough to delay the taper, then it looks like the "Santa Rally" is game on. However, if the Fed surprises and announces that it will begin tapering soon, we could see a significant pullback through the end of the year.
For more free, daily swing-trading ideas and set-ups, check out SoTM's Trade of the Day hosted on Marketfy.

AmSurg Corp - Last 30 Days
AmSurg Corp - Last 3 Months
AmSurg Corp - Last 6 Months
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The Trade:

With this situation in play, it is probably good to err on the side of caution when building trades through the early days of this week. Today, AmSurg Corp (AMSG) looks like a great buy for a low risk swing trade.

AMSG is a Small-Cap Health Care Facilities stock with a market beta of 0.8, so it is a relatively safer play than a lot of the nice set-ups at this stage of the bull market. AMSG has been firmly entrenched in a long term up-trend since November of 2012, only pulling back in a significant manner three times in a whole year's time (February, June, August).

Recently, AMSG hit new all-time highs of $48.32 on November 29. Since then, the stock has pulled back through the first few weeks of December, forming a nice solid base around the $45.8 - $46 area. AMSG has tested the support level four times in the past two weeks, holding the line on a closing basis each time.

Today, the stock has broken above its 5- and 10-day moving averages, and is on the verge of pushing above the 18-day as well. AMSG is also exiting the oversold stochastic, which is a bullish sign. Analysts also have the target price for AMSG set at $52 (Barclays), so the street consensus also calls for a move higher.

Given the long-term price action, AMSG looks like it will make a run back to all-time highs in the short-term, which would net a gain of +4.1% from current prices. A close below $45.60, below short-term support, would break the set-up. With a stop at this price, the downside risk here is -1.72%, which makes the reward to risk ratio of this trade nearly 2.5 : 1.

AMSG has an excellent technical set-up, trending firmly higher in the long- and intermediate- term. There is immediate upside to recent all-time highs, and current prices give us a nice entry after a textbook pullback and base. With strong support just below and a favorable reward to risk ratio, AMSG makes for a nice +4.1% gain while offering a relatively low-risk trading opportunity in a week that is sure to bring some serious volatility.

Entery Method:

Buy at the current price (~$46.36).

Exit Method:

Sell at a close below $45.68 (Breakdown) / An intraday price of $48.30 or above (Profit-Taking)

Company Profile:

AmSurg Corp. is the owner and operator of short stay ambulatory surgery centers (ASCs) in the United States. An AmSurg surgery centers are typically located adjacent to or in close proximity to the medical practices of its partner physicians. Its surgical facilities primarily provide non-elective, high volume, lower-risk surgical procedures across multiple specialties, including among others gastroenterology, ophthalmology, and orthopedics. For the year ended December 31, 2012, approximately 1.5 million surgical procedures were performed in its ASCs. As of December 31, 2012, the Company operated 240 ASCs, of which the Company owned a majority interest in 235 ASCs and a minority interest in five ASCs (three of which are consolidated). During December 31, 2012, 149 centers performed gastrointestinal endoscopy procedures, 48 centers performed procedures in multiple specialties, 36 centers performed ophthalmology surgery procedures, and seven centers performed orthopedic procedures.

Stock Rating:

The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 - 10 with 10 being the highest.

Disclosure:

At the time of publication the editor and affiliated companies own the following positions: None

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