MoonanGF, in the General's opinion CXW was just doin' its 'technical' homework. Not a cause for undo concern.
If you refer to CXW's big 3-month chart here on Y!-F, using the "Bar" option rather than the usual "Line" presentation format, you'll notice that CXW had gapped-up 0.50 of a point between 10/16/01's i-d high of 15.80 and 10/17/01's i-d low of 16.30.
As the General has pointed out on occasion in times past, the market abhors such price discontinuity in the same way that nature abhors a vacuum. So, about a month later, on 11/19/01, CXW returned to fill in that gap when its i-d l reached down to 15.76. For good measure, it lingered in the 15+ area over the proximate succeeding two sessions, 11/20 & 11/21, a behavior that apparently prompted your posting #18732.
The General wanted to respond to your concern (he really did) but by the time he'd read yours, MK had already given it his shot (#18735) and the General, unaware and unforewarned, had made the mistake of reading the next four postings between Mr. Puta & MK, the contents of which necessitated the General having to urgently repair to a pharmacy for some insulin to prevent the onset of a diabetic coma (and the General didn't even know he was diabetic). It was a close call. Not too many pharmacies open at that hour.
Forewarned is forearmed, as they say, so perhaps, from here on out, the General will have to enlist nic's aid in prereading their exchanges to see if its suitable for the General's consumption.
If the reader looks at CXW's big 6-months chart (w/Bar format rather than Line format), it can be noted that, since the end of May, CXW has been tracking in a very gradually ascending channel. It has not violated that channel (which is described by successively higher highs and successively higher lows).
For example, at the recent market's nadir on 9/21/01, CXW's i-d l dipped to its recent nadir of 12.60 versus its 6/16/01's i-d l of 11.66. That uptrend line (UTL4, according to the General's nomenclature) has a slope of +0.013623188 of a point per weekday (pt./wd).
As of tomorrow, 11/27/01, the extant channel's floor is @ 13.24.
Similarly, its recent i-d h of 18.80 on 11/02/01 topped its i-d h of 17.88 on 7/05/01. That soffit's slope is a somewhat flatter +0.010697674 pt./wd.
As of tomorrow, that extant channel's soffit stands @ 18.98.
IF you were to assume a soffit's slope = to its floor's slope (i.e. +0.013623188 pt./wd), the soffit's value a/o tomorrow, 11/27/01, would be 19.36. As such, CXW's channel provides ~6.12 points of maneuvering room, in the General's opinion.
The Oracle at Delphi expects CXW to spend some more time consolidating in the 15.5 to 16.5 area before moving higher. He sees some significant resistance for CXW in the $26 to $28 area with stronger resistance @ the $37.5 level.
Support is where the gap was filled @ ~$15.80 +/- (Note: CXW'a 50 DMA a/o 11/23/01 was @ $15.60) with stronger support @ ~$13 (Note: UTL4 @ $13.24 & CXW's 200 DMA, a/o 11/23/01, was @ $12.35).
The Commercial Services-Security/Safety industry group is ranked #1 out of 197 groupings, according to today's IBD (Page B4) and CXW's A/D rating is currently a "B" (Moderate Accumulation).
Hardly factors to lose sleep over. Now, if the pharmacy runs out of insulin and MK and Mr. Puta keep their dialogue going like it's been, THAT could be a reason for the General to panic.
ugadawg's posting (#18831), yesterday, hyperlinked an elaboration of 2 weeks-old news (see CXW's News page for 12/04/01, here on Y!-F).
It informed us that BB&T Capital Markets' analyst, Barry M. Stouffer, has a 12-month target price of $22 for CXW.
Considering the fact that, yesterday, less than 2 weeks after Stouffer initiated coverage and issued said TP, CXW's i-d h got to 19.25, a mere 12.50% below his TP, Barry could be regarded as a might conservative in his expectations, what with ~11.5 months remaining to achieve his forecast.
In all fairness to the analyst (it's always easy to Monday-morning quarterback), when Barry initiated coverage early on the morning of 12/04, CXW had closed the previous session (12/03) @ 15.85 amd had opened on 12/04 @ 15.95. A $22 12-month TP represented, percentage-wise, a +38.80% and +37.93% appreciation, respectively.
If, however, you (or Barry had) compared his TP to CXW's then (pre-consolidation) 52-week high (18.80), his 12- month TP represented a mere +17.02% appreciation.
Not being in possession of BB&T's report, the General is unable to say what the basis was for Stouffer's $22 TP.
What the General found interesting, was that, if you were to project the parallel technical "channel" that the General described in message #18756 (posted almost 8 days before BB&T's report was announced), projected out 260 weekdays (a year's worth) from 12/04, $22 would be right in there.
Yesterday, when CXW's i-d h ran up to 19.25, the channel soffit's value was @ 19.555652174.
The General would not be surprised if a year-end "Santa Clause" rally saw CXW achieving Stouffer's TP before 2001 went into the history books.
As pointed out in #18756, the Oracle at Delphi doesn't expect much in the way of resistance until the $26-$28 area.
Actually,I've been meaning to post some of this for quite some time. I still follow this stock daily - mostly for sentimental reasons.
One of the things I always look at is the Yahoo "big 1 day" chart. When the stock started it's climb from 13 or so, it seemed that there was usually a relatively big block traded right at the beginning or end of the day - many times it was 25,000 shares, more recently 10,000 or 15,000. And the block was typically at the day's high. I interpret that as someone accumulating with enough volume and frequency to drive up the price. The stock had one of its biggest volume days when it hit 18+, a 52 week high. Since then the volume tapered off, and the price slid, until today, when volume was the greatest since the 18+ day, and there were some big blocks again.
So, my hunch is that somebody continues to accumulate it. A stock like this, with little or no coverage, isn't likely have much activity unless one or a few buyers think it's a good buy. That's not necessarily a ringing endorsement of the stock, but it is interesting if true.
There are others (the General, his Oracle, Flipper, etc.) who understand the technical analysis much better than I do. I'm curious what they think.
Overall, I'm in princessalouie's camp: it's starting to show some promise, but still has a long way to go. They can grow earnings by filling empty beds, refinancing and managing well. But they won't have capital to add facilities for a long time. And what they gain in Federal contracts, they may lose in state contracts. Because of the recession,there should be less wage pressure, more crime and more states looking to save money (although I don't know if the latter will help or hurt).
I agree with your analysis for the most part. I don't think investors should buy CXW as a growth story but rather as a de-leveraging story. Upon completion of a long term bank financing (very easily done) and the expiration of some interest rate hedging contracts that are currently inflating interest expense, this company can easily generate $150 million in annual free cash flow to reduce debt. You do that for a year or two and this stock will be well on its way to $50.00.
Technical indicator. That climb started just around the time when yours truly posted again, after significant absence. Could that be the REASON?
On a different matter, I am saddened you are only following this stock for "sentimental" reasons. By itself it's prebably a bullish signal? What do you think, my friend?:-)))