AMN Healthcare Services, Inc. (NYSE: AHS)

AMN Healthcare Services, Inc. provides healthcare workforce solutions and staffing services in the United States. The company operates through three segments: Nurse and Allied Healthcare Staffing, Locum Tenens Staffing, and Physician Permanent Placement Services. Its services include travel nurse staffing under the American Mobile, Onward Healthcare, Nurses Rx, and O’ Grady-Peyton brands; rapid response nurse staffing, a shorter-term staffing solution for four to eight weeks under the NurseChoice brand; local, or per diem, staffing for daily shift work or on as-needed basis under the Nursefinders brand; and locum tenens staffing for specialties, clinicians, and dentists on an independent contractor basis on temporary assignments from a few days up to one year under the Staff Care, Linde Healthcare, and Locum Leaders brands.

Take a look at the 1-year chart of AMN (NYSE: AHS) with the added notations:

AHS Breaks Lower

For most of 2016, AHS had been trending higher. In addition, during the course of the past 6 months the stock had tested the $34 level (red) as support on multiple occasions. Now that the $34 level has been broken, the stock should be taking another leg down.

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The Tale of the Tape:: AHS broke a key level of support at $34. A trader could enter a short position on any rallies up to or near $34 with a stop placed above the level. If the stock were to break back above the $34 level, a long position might be entered instead.

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