THC Stock: Tenet Is a Gritty Healthcare Winner

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Tenet Healthcare Corp (NYSE:THC) had a couple of scares in recent months, but each time, THC stock clawed itself back in a sign of continued resiliency.

THC Stock: Tenet Is a Gritty Healthcare WinnerMeanwhile, healthcare stocks as a whole continue to show relative strength versus the broader market, so from a trend follower’s perspective, the sector — and THC stock — still offers some of the better opportunities on the long side.

In the off chance you haven’t noticed, the going for U.S. equities has been getting incrementally more choppy thus far in 2015, and while there have been some shorter-lived directional moves, it still has been difficult to hide from the choppy environment. When you’re trading in such an environment, it pays off to look at things in relative terms — in other words, look for pockets of relative strength where we can put some money to work for more than just a few days.

Such environments lend themselves particularly well to look at things in relative terms, i.e. to look for pockets of relative strength where we can put some money to work for more than just a few days.

Looking at the below ratio chart where I divided the Health Care SPDR (ETF) (NYSEARCA:XLV) by the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), we see that while this sector has shown great relative strength for years, even the most recent uptrend of relative strength since last summer remains intact (holding above the red dotted line of support).

Meanwhile, another little spurt of relative strength in the sector attempted to push the ratio above the black diagonal line of resistance, which increasingly looks like it will succeed sooner rather than later.

xlv spy
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THC Stock Charts

With the relative picture still looking strong for the healthcare sector as a whole, looking at the multiyear chart of THC stock, we see a similar story still unfolding there. Through this lens, shares built a multiyear base from 2007 into early 2013, then finally released higher past the lower black horizontal line of resistance. The rally finally came to an end with a classic over-shooting move in August/September 2014, and has since consolidated below the next higher horizontal line of resistance around the $52 area.

thc stock weekly
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On the daily chart, we see that the slide off the September 2014 highs ended in February, and THC stock began to rally again. The stock then formed an important higher low in early May, more or less holding above its 100-day simple moving average (blue line).

thc stock charts daily
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The clear line of resistance around the $52-$52.50 area is what the stock now needs to overcome on a daily closing basis in order for a next upside move toward the $55-$56 area to unfold.

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Download Serge’s trading plan in the Essence of Swing Trading e-book here. As of this writing, he did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/05/tenet-healthcare-corp-thc-stock-grit/.

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