Boston, MA 10/04/2013 (wallstreetpr) – Tenet Healthcare Corp (NYSE:THC) (Closed: $46.27, Down: 5.40%) continued its rally on Thursday after the news about the company closing its acquisition of Vanguard Health Systems Inc. pushed the price up by 6% on Wednesday. It was the 4th consecutive positive closing of the stock and 3 of those were huge bullish candles. This rally has all the characteristics of a 3rd wave, violent and unidirectional. The 2nd wave was sharp and deep. So, going by the rule of Alternations in Elliott Wave Theory, we can expect a shallow and time consuming retracement of this rally whenever it finishes. Then another rally would be expected for a new high and the 5 legs would be finished. The volume of 7 million against an average of 1.5 million certainly strengthens up this scenario.
The other bullish confirmations come from the indicators. The weekly MACD is turning up from the zero line remaining all the time in the positive territory and that is definitely one of the most bullish signs. The weekly RSI is already at 60 and raring to go for more.
The rally from the 2011 bottom of $13.84 gathered momentum from the second half of 2012 and reached $49.13 in April 2013. The subsequent price action was an Irregular Flat correction where a higher high was made at $49.47. The correction took the form of a classical Flag pattern with the entire rally from $17.24 to $49.13 as the pole of that. The breakout of the Flag signals the next rally unfolding now. As a Flag generally comes at the midway of a rally, we can expect a lot more to come on the upside now. Actually the pattern gives us targets of $51.33 and $75.50 in the coming months. The larger picture gives us a Saucer pattern developing which has a target of $75 too. Investors could buy this stock on all dips.
