America Tests Positive for a Bad Time
by Shane Ormond
On Oct 2, 2020
Yesterday, we looked at Daily Price Chart and an OBV line for ServiceNow, Inc., noting that the stock’s OBV line is sloping up.
Today’s Chart of the Day is a daily price chart for DaVita Inc. (NYSE: DVA).
DaVita Inc. provides kidney dialysis services for patients suffering from chronic kidney failure or end-stage renal disease (ESRD).
The company operates kidney dialysis centers and provides related lab services in outpatient dialysis centers. It also provides outpatient, hospital inpatient, and home-based hemodialysis services; owns clinical laboratories that provide routine laboratory tests for dialysis and other physician-prescribed laboratory tests for ESRD patients; and management and administrative services to outpatient dialysis centers.
Now, below is a Daily Price Chart with the 50-Day Exponential Moving Average (EMA) and 100-Day EMA for DaVita Inc.
Back on July 24, 2019, the DVA 50-Day EMA (blue line) crossed above the 100-Day EMA (red line). This indicated DVA was showing a ‘buy’ signal (circled).
When the 50-Day EMA crosses above the 100-Day EMA, the stock’s buying pressure has begun to outweigh the selling pressure, signaling a ‘buy’ signal.
When the 50-Day EMA crosses below the 100-Day EMA, the selling pressure has begun to outweigh the buying pressure, signaling a ‘sell’ signal.
- 50-Day EMA line Above 100-Day EMA = Buy signal
- 50 Day EMA line Below 100-Day EMA = Sell signal
The Potential for Profits
If you had purchased DVA shares when the 50-Day EMA crossed above the 100-Day EMA on July 24, 2019 – when the stock was around $59.00 – you’d be up 49.9% by now.
Not a bad profit for a yearlong hold of a major healthcare services company.
Now, as you can see, the 50-Day EMA is still above the 100-Day EMA. That means the bullish trend is still in play!
As long as the 50-Day EMA remains above the 100-Day EMA, the stock is more likely to keep trading at new highs in the coming days and weeks.
We’ll be keeping our eye on this stock as it continues to trend upward.
Additionally, we’d like to talk about how a previous Chart of the Day stock has done…
The Power of Options
On July 14, we highlighted K12 Inc. (NYSE: LRN), noting that LRN’s OBV line was sloping up, validating the stock’s bullish trend.
If you happened to have purchased LRN shares on that day, you’d already be up 33.9%.
But… if you had purchased the right option contract, you would be up 187.4% in just two weeks’ time!
That’s the power of options.
Best Regards,
Chuck Hughes
Editor, Chart Of The Day
Written By Chuck Hughes
Before Chuck Hughes won 10 Trading Championships, he was an accomplished Air Force pilot. In fact, he credits his success as a stock and options trader to his disciplined upbringing and career. When he was deciding between a career in the Navy and a career in the Air Force, the Navy told him he’d only have a 33% chance of flying jets. The Air Force gave him 100%. He liked those odds better. 35 years ago, Chuck had a wife, a young daughter, a son on the way, and a huge mortgage to afford. He didn’t want to give up on his lifelong dream and stop flying for a major commercial airline. He knew he needed to supplement his income during the 15 days a month he wasn’t flying. So he used his experience in discipline and math, and his understanding of finance and the stock markets (which he’d always been interested in,) and opened a $4,600 trading account. He made over $460,000 in profits his first two years of trading, and he hasn’t looked back since. When he was diagnosed with Meniere’s disease 15 years later, which commonly leads to vertigo…He knew his career as a pilot wouldn’t last much longer with those odds. But he didn’t have to scurry to find another gig, or panic about how his family would eat… He’d spent the last 15 years perfecting his system and raking in cash. As an options trader, Chuck does not let his emotions get in the way of his trading strategy. He adheres to disciplined and methodical options and stock trades. Because he respects the options game so highly, and understands the true freedom that financial solvency can bring, Chuck was able to design and refine his system and win those 10 Trading Championships. Put simply, Chuck Hughes’ trading strategies work, and in all types of market conditions. They’ve worked throughout the bull, bear, and flat markets America has seen in the last 30 years. Chuck Hughes has spent that time building a reputation as one of the most trustworthy options traders in the industry. His publishing group Legacy Publishing LLC was one of the few trading groups on the planet to have correctly predicted and profited from the 2008 financial crash .As a published author 16 times over, a 10-time Trading Championship winner, and an options-trading teacher for 25 years, he’s learned to trade and teach without an ego.
