HMS Holdings Corp (NASDAQ: HMSY)

HMS Holdings Corp. provides cost containment services to government and private healthcare payers and sponsors. The company’s services include co-ordination of benefits and program integrity services. Its co-ordination of benefits services provide cost avoidance services that offer validated insurance coverage information, which is used by government-sponsored payers to co-ordinate benefits for incoming claims; and program integrity services identify improper payments on a pre-payment and post-payment basis, identify and recover overpayments, detect and prevent fraud and abuse, and identify process improvements.
Take a look at the 1-year chart of HMS (Nasdaq: HMSY) below with added notations:

HMSY has been trading sideways for the last 2 months, while forming a common pattern known as a rectangle. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. HMSY’s rectangle pattern has formed a $23 resistance (blue), which actually goes all the way back to February, and a $20 support (red). At some point the stock will have to break one of the two levels created by the rectangle pattern.

The Tale of the Tape: HMSY is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $20, or on a breakout above $23. The ideal short opportunity would be on a break below $20 with an expectation of a fall down to the $18 level (green).
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