The one sector I am looking to buy into for the first time in 10 years!

These two healthcare companies have just been added to my watchlist!

Let’s start with the biggest healthcare company…

#1. 10 Years on and Netcare is finally giving me a healthy buy signal!
 
You’re looking at the weekly chart of Netcare.

It is clear Netcare has had a very strong support (floor level) at around R12.14. The first time this price bounced off was in 2011.

The price then went back down and bounced off this level again in March 2022.
And now that the price tested and bounced off the level again, this showed me that buying (demand) was taking place, pushing the price up.

However, I still needed one more indicator to show momentum was picking up. So, I added one more indicator to the chart.

How the RSI has given me a solid reason to buy Netcare

The second indicator, I’m looking at is below the price chart with the RSI – Relative Strength Index (squiggly black line).

The RSI is a leading indicator that can help make a probability prediction whether the market is about to turn up or down.

There are three different ways to interpret the RSI, but for this article I want to look at the Bullish Divergence.

All you need to know is this.

When the RSI shows higher lows on the indicator (rising blue line), then it tells us we can expect upward momentum in the share price shortly after.

This is known as a Bullish Divergence.

As you can see, the RSI has clearly shown higher lows, while the price has been moving in a sideways formation. This tells me, we can expect the price of
Netcare to head up in the next couple of weeks.

In summary, I’ll be buying Netcare because:
1.    Netcare has bounced off a 10 year support
2.    The RSI is showing a Bullish Divergence.

I expect I’ll very soon be sending a buy signal out to my group of Red Hot Storm Traders. If you’d like to find out how to join you can go here.

Now let’s take a look at health company #2…

#2: This pattern has sparked a buy signal for the first time in six years

The next healthcare company I’m looking at is Mediclinic. We’ll also look at the weekly chart below.