Healthcare Services Group (HCSG) Pops While Others Drop

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 through the following business segments: Housekeeping and Dietary.

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

Chart of HCSG provided by TradingView

During the past several months, HCSG has formed an inverse head and shoulders reversal pattern (green). The head (H) and the shoulders (s) have been noted to make the pattern more visible. The stock’s neckline resistance is currently sitting around $19 (red). HCSG confirmed its H&S by breaking through the neckline, which means the stock could be headed much higher. 

The Tale of the Tape: HCSG confirmed an inverse head & shoulders pattern. A long trade could be entered now, or on a pullback to the $19 area, with a protective stop set under the neckline.

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 


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