Healthcare Services Group (NASDAQ: HCSG)

Healthcare Services Group, Inc. engages in the provision of keeping, laundry and dietary services to long-term care and related health care facilities. It operates its business through the Housekeeping and Dietary segments.

Take a look at the 1-year chart of Healthcare (NASDAQ: HCSG) below with my added notations:

Over the course of the past several months, HCSG has hit the $26 mark (red) as resistance multiple times. The stock has recently turned down from that level again, but could be looking to finally break higher. A solid close above $26 would likely lead to much higher prices for HCSG.

The Tale of the Tape: HCSG has a key level of resistance at $26. A long trade could be entered on a hold above that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $26.

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