Small Cap Network Blog

I already blogged it this morning, but I didn’t have room for a chart in my morning notes. So, here I am again telling you about Tenet Healthcare (THC). Why do I need a chart? Because the chart is the story. The stock has made a strong break today, moving past some prior resistance levels. Those of you who follow all of our picks would now be up about 48% on this trade.

The chart tells the story far better than I ever could. Take a look…

The surge was prompted by an upgrade from Credit Suisse. The CS analyst felt Tenet was making good progress on their recovery, and general hospital pricing trends were improving.

The same analyst also raised his target price to $8.00 (it had been $6.00). Our target was originally $7.67. As tempting as it may be to raise our bar and let Credit Suisse fans bid the stock right up to $8.00, we’re not going to do that. Better to sell on the way up than try and pinpoint the top.

There’s something else though. THC hit strong resistance around the $7.67 level in early 2007. It may well find it again. So, we’re not going to get greedy and try and squeeze out an extra 23 cents when the chart has already warned us not to. Besides, if THC reaches $7.67, that still means an 88.9% gain from our November 10th ‘picked’ price. Take a look at the weekly chart and see of you agree.

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