September the worst month
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Ramsay Health (RHC)
Technical Recommendation: Hold
(Click here for RHC fundamental research and company information)
RHC was last reviewed with CSL in mid August, and as with CSL, a Reduce rating was put forward. The stock had rallied by 35% since February and was showing signs of slowing, although it was holding above the support of the 56DMA.
Like CSL, RHC bounced from the 56DMA and has since advanced by another 11%.
The stock remains overextended but momentum indicators are holding up relatively well at this stage. I still think risk is skewed to the downside, but given the recent resilience the stock is upgraded to Hold.
There is nothing wrong with the longer-term profile and RHC has been one the favoured stocks for a long time, but there will be high risk and low risk entry levels and this certainly is not one of the latter. (Unfortunately I missed the last one in mid August).
A break below $23.50 would push the stock back into Sell mode.
(click image to enlarge)