As we’ve made note of in a previous posting, healthcare issues have lagged many other sectors during the recent advance. When an issue in an unfavored group exhibits interesting technical signs, we should pay attention.
The chart of HCA shown below gives off a number of clues that a trend change is about to happen. There has been a persistent attack at the 83 to 85 resistance area and despite one down week, prices gravitate back to the supply area. Directional movement technical are showing an early trend change indicated in the bottom panel. The very strong candle on the recent breakout is also indicative of money moving into this issue.
We note that the stock is trading above the 50 and 200 period averages as well confirming that the sideways trend is likely to resume on the upside. Accordingly we expect HCA to move above resistance in the weeks ahead.