HMSY makes a run at $21

HMS Holdings Corp. provides cost containment services to government and private healthcare payers and sponsors. The company’s services include co-ordination of benefits and program integrity services. Its co-ordination of benefits services provide cost avoidance services that offer validated insurance coverage information, which is used by government-sponsored payers to co-ordinate benefits for incoming claims; and program integrity services identify improper payments on a pre-payment and post-payment basis, identify and recover overpayments, detect and prevent fraud and abuse, and identify process improvements.

Take a look at the 1-year chart of HMS (Nasdaq: HMSY) below with my added notations:

Excluding a drop in April, and a rally in August, HMSY has traded in somewhat of a range. Since the end of February the stock has commonly stalled at $21 (purple), and starting at the beginning of June HMSY has always found support at $18 (red). At some point the stock will test or break one of these two levels again and provide potential trading opportunities.

The Tale of the Tape: HMSY has key levels to watch at $21 and $18. Long trades could be considered at $18 or on a break through $21. Short trades could be made at $21 or on a break below $18.

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

@cmtstockcoach