A key level of resistance has formed in the chart of Teladoc Health (TDOC). If this level is broken, a breakout could occur.
TDOC is a virtual health provider with a telehealth platform delivering 24-hour, on-demand healthcare via mobile devices, the Internet, video, and phone. Its platform connects members with a network of physicians and behavioral health professionals.
The company has benefited from strong demand for the telehealth market during the pandemic. Its expansion into international markets should help boost growth over long-term. Acquisitions should also aid growth.
TDOC had $1.2 billion in cash at the end of the latest quarter, compared with $984 million in long-term debt. The company also has a sky-high current ratio, indicating it has more than enough liquidity to handle short-term obligations.
The company has seen huge sales growth. Revenue has risen an average of 62.1% over the past five years and is expected to rise 140.9% this quarter. Though the stock looks overvalued with a Price to Sales of 20.5 and a Price to Book of 15.1.
The stock has shown strong near and long-term momentum. This has led to a “Buy” rating in our POWR Ratings system. It holds a grade of “A” for Trade Grade, which is based on short-term momentum. This is reflected in the chart below.
Take a look at the 1-year chart of TDOC below with my added notations:
Chart of TDOC provided by TradingView
During the past five months, TDOC has formed a key level of resistance around the $235 (red) mark. The stock has tested that level multiple times since its August peak, and it is currently sitting right under that level again. A solid close above $235 should lead to higher prices for TDOC.
A long trade could be entered on a breakthrough of the $235 resistance level, with the expectation for a breakout.
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Christian Tharp, CMT
TDOC shares fell $5.29 (-2.28%) in premarket trading Thursday. Year-to-date, TDOC has gained 13.12%, versus a 1.78% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp, CMT
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock. More...
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