Jim Cramer Explains the Repeating Chart Pattern for National HealthCare Corporation

National HealthCare Corporation (NYSE:NHC) was among Jim Cramer’s stock calls on Mad Money, as he advised investors to stick with the largest tech companies in the market. Cramer mentioned the stock during the episode and stated:

Last but not least, there’s National HealthCare Corp. Take a look at the daily chart. This is another operator of senior housing that’s been putting up good numbers. Fitzpatrick points out that National HealthCare has a reliable repeating pattern where the stock pulls back to the 50-day moving average and then institutional buyers snap it up… If the stock gets too far above the 50-day moving average, these institutionals seem to close up shop and wait for a better entry point.

We’ve seen the same pattern seven times over the past year. Now, in Fitzpatrick’s view, this kind of pattern needs periodic rest before it can trigger another rally. He points out that National HealthCare’s experienced a series of flat tops that ultimately led to next buying opportunity, as the floor of support at the 50-day, this is another one, it’s the 50-day moving average gradually catches up with the share price. At this point, he thinks the stock’s moving up to another level, but it won’t be too long before we get another shallow pullback that could make for an excellent entry point.

Photo by Adam Nowakowski on Unsplash

National HealthCare Corporation (NYSE:NHC) manages senior living, skilled nursing, homecare, and hospital facilities that provide medical care, rehabilitation, and daily living assistance. Additionally, it runs pharmacies, offers behavioral health treatments, and provides business management services.

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