iStock.com/Peshkova RDNT Stock: Embedded Patterns Are Powerful
Things are not always as they seem. For example, the S&P 500 and the Dow Jones Industrial Average have been correcting for much of this year, and these two major market indices have not forged a new high since January 2018. Based on the performance of these indices, one might assume that stocks have not been performing well this year, but that is not actually true.
A number of sectors have been standouts in 2018. In recent weeks, these sectors have pushed higher to forge new all-time highs. The healthcare and biotechnology sectors are among the sectors currently outperforming, and they have played a hand in pushing the Nasdaq composite index to new all-time highs.
I am focusing on RadNet Inc. (NASDAQ:RDNT) stock because I believe this healthcare stock has just begun its journey toward much higher RDNT stock prices. My bullish beliefs are centered around a number of embedded technical price patterns that have developed on the RadNet stock chart that are supporting such an outcome.
The first technical price pattern is highlighted on the following RadNet stock chart.
Chart courtesy of StockCharts.com
The technical price pattern highlighted on the RDNT stock chart is a cup-and-handle price pattern.
Cup-and-handle price patterns are characterized by two distinct troughs. These troughs are created because a significant level of price resistance prevents the stock price from advancing. When identifying the pattern, the rule of thumb is that in order to qualify as a cup-and-handle price pattern, the first trough must be much bigger than the trough that follows.
This significant level of price resistance responsible for creating the cup-and-handle price pattern resided at $9.50. This level of price resistance was first established in October 2007, which means that this pattern was in development for 10 years.