Will CARDINAL HEALTH INC breakout?

CARDINAL HEALTH INC (NYSE:CAH) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NYSE:CAH.

Technical analysis of NYSE:CAH

ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

We assign a technical rating of 10 out of 10 to CAH. Both in the recent history as in the last year, CAH has proven to be a steady performer, scoring decent points in every aspect analyzed.

• Both the short term and long term trends are positive. This is a very positive sign.
• Looking at the yearly performance, CAH did better than 94% of all other stocks. On top of that, CAH also shows a nice and consistent pattern of rising prices.
• CAH is part of the Health Care Providers & Services industry. There are 126 other stocks in this industry. CAH outperforms 91% of them.
• CAH is currently trading near its 52 week high, which is a good sign. The S&P500 Index is trading in the upper part of its 52 week range, but not near new highs, so CAH is leading the market.
• CAH is currently showing a bull flag pattern! A bull flag pattern occurs when prices pull back slightly after a strong rise up. This may be a nice opportunity for an entry.

Looking at the Setup

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NYSE:CAH this score is currently 8:

Besides having an excellent technical rating, CAH also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. A pullback is taking place, which may present a nice opportunity for an entry. There is a support zone below the current price at 84.95, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for CAH in the last couple of days, which is a good sign.

Trading breakout setups.

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

Of course, there are many ways to trade or not trade NYSE:CAH and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

More breakout setups can be found in our Breakout analyzer.