A Prescription for Every Timeframe

• Posted by Greg Harmon
• on January 18th, 2011

The Health Care Sector had a rough week last week but has been looking pretty good on a in the weekly and monthly charts. That got me thinking. My trade ideas are typically short term in nature but other traders and investors have different horizons. So here are some trade ideas in the Health care sector for the day trader, swing trader, position trader and long term investor. A prescription for every timeframe.

Day Trader

Right out of the open tomorrow Intuitive Surgical looks ready to continue its push from Friday higher. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicator are both rising with the price and on good volume. This looks ready to run to resistance at the 303 to 305 area. 280 looks like a good place for a stop.

Swing Trader

Dendreon has been in a range for the last 3 months and now looks to be headed to test the top of that range. If it can get through the top at 39 then it will see resistance at 43 and then 45 higher. This could take a couple of days to play out.

Position Trader

China Biotics is testing the 15.65 resistance level for the third time in 8 months. This time it has a rising RSI and a MACD that is improving and about to cross higher. It is also now above the 200 day Simple Moving Average (SMA). On a break of the line there is resistance at 18and then 18.50 and 19, before it can attain the target of the Inverse Head and Shoulders pattern (roughly the 200 day SMA is the neckline) of 20.

Investor

Athenahealth is also approaching a triple top but may be a few days off. The MACD has just crossed and turned positive and the RSI is rising. As it hits the top a longer term investor should note that it has spent its entire lifetime of less than 4 years below 47.40 and above 22 (roughly). A break of this $25 channel would suggest a target of 72. Obviously that would not happen quickly.

Four timeframes, four prescriptions. Pick the one that suits your diagnosis and take your medicine accordingly.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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