Express Scripts Has a Good Story

For six months, Express Scripts has worked upwards, defining a clear up-trending channel. Over the past month, ESRX has traded within a tight sideways trading range.

Looking at the volume bars, I see periodic spikes of volume on up-close days (the green volume bars below). The almost regular spikes strongly suggest institutional accumulation is going on.

Notice that after each time the stock was either quiet or sold off, the first above-average volume spike on an up-close day nearly always led to further gains within the next few days. These were usually extended moves of several percent.

ESRX could exit from the current tight trading range in either direction. The high volume spike five days ago, coming off the bottom of the range, and the previous evidence of accumulation, suggests further gains, and a breakout upwards, is the more likely scenario.

I like to find additional tailwinds for all my trades. I look to seasonal track records for evidence the stock has drawn interest from institutions this same time of year in previous years. ESRX doesn't disappoint.

ESRX has risen an average 10.6% over the next 13 weeks, with gains in 16 out of 21 years. 12 of the gains were double-digits. This is pretty strong, albeit circumstantial, evidence that institutions, the major drivers of stock gains, repeatedly play a run-up in ESRX into the fall.

Express Scripts provides pharmacy benefit and healthcare management services. It will likely be playing a major role in the drive to cut healthcare costs in the future. Fundamentally, the stock is growing earnings at a 25% rate and has a 22% Return on Equity. It does not pay a dividend, and the next earnings release will be around July 29th.

Look for a continuation on the upside to enter, or wait until it closes above 64 on decent volume for confirmation of its intentions. It is very unlikely the institutions are done buying it for this year.

This would make an excellent stock-only trade. The near-term goal would be the 2012 high of 66.06, which would represent a 6.4% gain from the current price.

ESRX has actively traded options with tight Bid/Ask spreads, so covered calls and various directional option strategies, such as bull call debit spreads and bull put credit spreads should also do well.

The next six months have been very good to Express Scripts stock in the past. So far this year it looks like more of the same.

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, type in

By Gregg Harris, MarketTamer Chief Technical Strategist

Copyright (C) 2013 Stock & Options Training LLC

Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.

Gregg Harris is the Chief Technical Strategist at with extensive experience in the financial sector.

Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.

As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.

Related Posts


MarketTamer is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of MarketTamer are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.

This company makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.

The content on any of MarketTamer websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options. The educational training program and software services are provided to improve financial understanding.

The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.