Here’s your breakout trade for Monday. Check out DaVita Health Care ($DVA) (April 08, 2022)
DVA
This is DaVita Health Care ( NYSE: DVA ). You can see what’s going on here, this stock had a heck of a breakout today. It is only up less than 5 percent, so based on what some of these other stocks have been doing, oh my gosh, 20 percent, it’s only a 5 percent move.
If we look at the weekly chart, again, we can get a sense of what is happening. I am looking at this stock as kind of making a decisive breakout from this trading box. The same thing here, I will draw the same box here, this is the breakout from this thing. The box is really like $10.00, and so I am looking at this stock and I can see it running up, 130.00 isn’t that big of a deal right from where it is now, not that much at all, 5ish percent.
But the way this stock is moving, and by the way, this volume has been increasing, I think a good price target for this would be more like 135.00, I don’t see why it can’t go back up to this level. This is a company that does dialysis for end-stage renal disease.
And so, now that the lockups tend to be over there are more people that can go in and get themselves assessed and treated. They realize that after a couple of years of lockdowns and them not getting treatment (I know somebody that this happened to), now they can finally go in and get looked at again and realize, I’m in the end stage of renal disease, maybe I need dialysis.
I am looking at this as having more upside, but you always have to prepare for the downside. And so I would say that if you are buying this stock I would have the stop right down here so you are not risking that much money. The reason here is because if the stock falls back below this breakout, well then it was a fake-out, the breakout just didn’t work.
If instead, you say, well I’m going to put the stop down here. Well, if you are going to do that, then why don’t you put it down below this level here? And the reason you are not going to do that is that you are slowly ratcheting down your stop from a relatively small loss to a huge loss, you don’t want to do that. I would say, take a small position here, if you are making this trade, and then just see what happens when it starts to pull back, and it will, they always do.
Free Chart