MedAssets, Inc. (NASDAQ: MDAS)

MedAssets, Inc., a financial and performance improvement company, provides technology-enabled products and services for hospitals, health systems, and other ancillary healthcare providers in the United States. It operates in two segments, Spend and Clinical Resource Management (SCM) and Revenue Cycle Management (RCM). The SCM segment offers a suite of cost management services, supply chain analytics, and data capabilities; strategic sourcing and group purchasing services; medical device and clinical resource consulting services; supply chain outsourcing and procurement services; capital equipment services, including equipment planning, assessment, and deployment services. The RCM segment provides a suite of software-as-a-service or Web-based software and technology-enabled services addressing various revenue cycle processes, such as patient access and financial responsibility, clinical documentation, charge capture and revenue integrity, pricing analysis, claims processing, denials management and reimbursement integrity, payer contract management, extended business office revenue recovery, accounts receivable services, and outsourcing services.

Please take a look at the 1-year chart of MDAS (Med Assets, Inc.) below with my added notations:

1-year chart of MDAS (Med Assets, Inc.)

MDAS has had a rough go of it over the last month and a half, to say the least. In a market that’s mostly been going higher, MDAS has continued to break lower. A level that seems to stand out on the stock is $20. You can see how $20 has been both support (August and November) and resistance (January, February and April) throughout the year. Earlier this week the stock fell back below $20.

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The Tale of the Tape: MDAS has broken $20 and should be moving overall lower. Traders could enter a short trade at $20, while a long trade could be made on a break back above that level with a stop placed below it.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT

Follow me on Twitter: @cmtstockcoach