DaVita HealthCare Partners Inc (NYSE: DVA)

DaVita HealthCare Partners Inc. provides kidney dialysis services for patients suffering from chronic kidney failure or end stage renal disease. It operates kidney dialysis centers and provides related lab services primarily in outpatient dialysis centers and in contracted hospitals. The company offers outpatient, hospital inpatient, and home-based hemodialysis services; owns clinical laboratories that provide routine laboratory tests for dialysis and other physician-prescribed laboratory tests for ESRD patients; and management and administrative services to outpatient dialysis centers. In addition, the company offers DaVita Rx, a pharmacy that provides oral medications to patients with ESRD; disease management services; vascular access services; ESRD clinical research programs; physician services; and direct primary care services. As of March 31, 2014, it operated 2,173 outpatient dialysis centers, including 2,098 centers located in the United States; and 75 centers located in 10 countries outside the United States.

To review DaVita’s stock, please take a look at the 1-year chart of DVA (DaVita Healthcare Partners, Inc.) below with my added notations:

1-year chart of DVA (DaVita Healthcare Partners, Inc.)

DVA has been trading sideways for the last 2 months. Over that period of time the stock has formed a decent resistance level at $70 (red). In addition, the stock has also created a level of support at $67 (blue). At some point the stock will have to break one of the two levels the rectangle pattern has created.

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The Tale of the Tape: DVA has clear levels of support ($70) and resistance ($67). The possible long positions on the stock would be either on a pullback to $67, or on a breakout above $70. The ideal short opportunity would be on a break below $67.

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