Henry Schein Inc. (HSIC) was upgraded to a buy today by TheStreet's Quant Ratings service. Regular readers of my column on Real Money know by now that I like to combine investment techniques, especially strong or weak-rated stocks from a quantitative perspective. Stocks that are rated buy and have bullish charts get my attention.
In this daily bar chart of HSIC, below, we can see that prices have been bottoming since November. If we look back 12 months we can see that prices have made lower highs the past year but HSCI has not made a lower low since early March. There was a successful retest of the March low in late March and prices subsequently came close to breaking the January zenith.
HSIC is above the rising 50-day moving average line but below the declining 200-day line. A rally above $75 breaks the 200-day line and a rally above $80 breaks the highs this year. When prices made a lower low in February and March the On-Balance-Volume (OBV) line did not confirm the new low. The rising OBV line since late March tells me that buyers of HSIC have been more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator is in a take profits mode but above the zero line.
In this weekly bar chart of HSIC, below, we can see that prices are testing the declining 40-week moving average line. The weekly OBV line shows stability the past three months and the weekly MACD oscillator continues to improve from a cover shorts buy signal.
In this Point and Figure chart of HSIC, below, we can see a bullish long-term price target of $101. That will not happen overnight but a trade at $78 and then $80 will greatly improve the picture.
Bottom line: I like the charts and the quantitative buy rating on HSIC. Traders could go long on strength above $78 risking below $69.
