Don't Ignore This Chart!

Henry Schein Starts to Shine


Outside of company specifics, the broad market environment and the sector are the biggest influences of a stock's price. The S&P 500 hit a new high recently so we are in a bull market. The Health Care SPDR (XLV) also hit a new high recently and it is one of the leading sectors. This combination bodes well for stocks in the healthcare sector and I will highlight a breakout in Henry Schein (HSIC), a company that supplies dental products and services, as well as healthcare products and services.

First, the long-term trend is up. The chart shows a large inverse head-and-shoulders pattern from November to July. This is a big bullish reversal pattern and the stock broke above resistance with a surge in early August. In addition, the PPO(50,200,0) turned positive and this means the 50-day EMA is above the 200-day EMA.

The stock advanced some 20% from early June to early August and then corrected with a falling wedge. The pattern is a bit volatile with the spike above 84 and gap in late August, but I still view it as a correction after the big surge. Notice that is retraced 50-61.8% of the advance. More importantly, it looks like the correction is ending as the stock broke out of the pattern.

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Topics for Tuesday, September 11th:

  • Stocks Still Outperforming Bonds (TLT, 2-yr Yield)
  • DAX, Shanghai and EEM Weigh on World (sans USA)
  • XLI, XLP and XLU Lead in September (plus sectors)
  • Industry Group ETFs (IBB, HACK, AMLP...)
  • NOT On Trend (ITB, XES, XME, SLX…)
  • Q&A: Scanning for Strong Downtrends and Setting Profit Targets
  • Stocks to Watch: Two BBand Squeezes (BAC, JPM)
  • Click here to Watch

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- Arthur Hill, CMT

Senior Technical Analyst,

Book: Define the Trend and Trade the Trend
Twitter: Follow @ArthurHill

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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