Healthcare stocks, with the exception of Aspen Pharmacare have been laggards within a strong overall market. Life Healthcare (LHC) has caught my attention as a name with both short term and long-term upside. For now, I will stick with the short-term where the following technical characteristics suggest underlying strength:
- Recent falling wedge breakout off a strong support zone (1650-1680c), followed by a retracement/re-test of the breakout level.
- MACD indicator making higher lows while price has remained flat. (Upper panel)
- MACD indicator has developed a bullish crossover. (Upper panel)
- Money Flow Index is trending up (lower panel)
- Strong candle structure at the 1765 pivot (P) - typical big green candles at the pivot are indicative of buyers eager to push the price through the support zone.
- Also note Wednesday and Thursday's massive volume.
- We would look for a move through the pivot (P) of 1765 and then 1780c as confirmation as well to add further conviction to the upside potential.
- On the upside, targets would be ~1876c and ~1930c.
- Stop: 1680c
- Recent falling wedge breakout off a strong support zone (1650-1680c), followed by a retracement/re-test of the breakout level.
- MACD indicator making higher lows while price has remained flat. (Upper panel)
- MACD indicator has developed a bullish crossover. (Upper panel)
- Money Flow Index is trending up (lower panel)
- Strong candle structure at the 1765 pivot (P) - typical big green candles at the pivot are indicative of buyers eager to push the price through the support zone.
- Also note Wednesday and Thursday's massive volume.
- We would look for a move through the pivot (P) of 1765 and then 1780c as confirmation as well to add further conviction to the upside potential.
- On the upside, targets would be ~1876c and ~1930c.
- Stop: 1680c