eHealth Inc. (EHTH) Breaks Back Over a Key Level

eHealth Inc. (EHTH) engages in the provision of Internet-based health insurance agency services for individuals, families, and small businesses. It operates through the following segments: Medicare and Individual, Family, and Small Business…

Take a look at the 1-year chart of eHealth (NASDAQ: EHTH) below with the added notations:

Chart of EHTH provided by TradingView

Over the course of the past several months, EHTH has formed a key level to watch at the $60 (blue) mark. That level was support twice back in August and September, and then resistance earlier this month. EHTH is currently hovering back above that level now, and a pullback could bring another $60 support test.

A trader could enter a long position on a pullback down to the $60 level with a stop placed under it. However, if traders are bearish on the stock, a short trade could be made on a break back below the $60 mark.

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