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.