Below Support- Tenet Healthcare

Published on Wednesday, 25 August 2010 05:56 Written by Christopher Lynn

New York, August 25th (TradersHuddle.com) - Shares of Tenet Healthcare Corporation (NYSE:THC) closed the trading session at $4.01 below calculated support at $4.10 breaking the stock technically, raising concerns by investors, as the move might trigger more selling.

Tenet Healthcare Corporation (NYSE:THC) owns or operates general hospitals and related health care facilities serving communities in the United States. The Dallas, Texas company operates rehabilitation hospitals, specialty hospitals, long-term care facilities, psychiatric facilities, and medical office buildings near its general hospitals, as well as ancillary health care businesses.

Tenet's stock was trading in a well defined range with support at $4.10 and resistance at $4.31; given that this range was broken traders will be closely monitoring the stock?s price action for clues of direction.

From a technical perspective it can be expected that previous support becomes resistance, as the new range gets defined, however, given that Tenet's stock is still near the broken support, traders will be focusing on $4.10 to see if the stock can bounce back and return to its previous range.

Traders wanting to establish a short position in Tenet Healthcare can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $4.10. For traders wanting to establish a long position, wait for price action to take the stock back to calculated support, which will provide a best entry point to build the position.