A Healthcare Stock Breaks Out Toward 525% Gains

A Healthcare Stock Breaks Out Toward 525% Gains
By Ann Sosnowski, Diligent Investor

Over the last year, the SPDR Select Sector Health Index (XLV) has stood still. And as the above chart shows in gold color, the XLV has actually dropped more than 8.66% from just the beginning of 2008.


But this doesn’t mean that the healthcare industry is full of terminally ill stocks.


One of the most promising companies on my radar right now is in the healthcare industry, where you can find many undervalued opportunities that could prove profitable in a recession.

This healthcare stock is riding on the most important demographic of our lifetime: the baby boomer generation.


Compared to the XLV, this stock is in a breakout pattern, meaning it’s poised to start investors on the road to 525% gains.


Back in June and July 2007, this stock showcased a double-top formation, a bearish indicator, which wiped away 40% of the stock’s value. After correcting, it’s rising again and has already broken out above its latest flat-line run around $8 per share.


Interestingly enough, that support line at $8 per share is the stock’s 50% Fibonacci retracement. In the past, this support was used to launch the stock almost 100% in a matter of months.


With a merger about to be approved that could give this company a monopoly on bone implants around the world, as well as low debt compared to cash on hand and a whopping quarterly revenue growth of 33.60%, this could be your only chance to get in at the low point of a healthcare stock that will inject safety into your portfolio… and give you 525% gains.


Ann Sosnowski
Editor, Diligent Investor