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PACS Group Crashes after Hindenburg Report

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Famed short-seller research group Hindenburg Research dropped another bomb this afternoon. PACS Group (PACS - Free Report) was the target today and boy was the report a doozy. PACS went public back in April in the mid-$20s. Since then, the stock has nearly doubled. From the title of the Hindenburg report I knew we were in for a ride. “How To Become A Billionaire In The Skilled Nursing Industry By Systematically Scamming Taxpayers” pointed out the findings of the company’s 5-month investigation.

The major accusation is that PACS abused a COVID-era waiver and inappropriately accessed skilled care Medicare benefits for thousands of patients across its national portfolio of facilities. Hindenburg estimates that the scheme drove more than 100% of PACS’ operating and net income from 2020 to 2023. The news dropped the stock 27% on the day at $31.01 but the stock dropped as low as $22.30.

Moving Averages: Bartosiak starts by examining the stock's moving averages, such as the 50-day and 200-day moving averages. He points out the significance of crossovers and divergences between these averages, which can indicate potential trend changes.

Support and Resistance Levels: Bartosiak identifies key support and resistance levels on the chart. These levels act as barriers that the stock price must breach or hold above, providing traders with critical decision points.

Chart Patterns: He discusses chart patterns like head and shoulders, cup and handle, or flags, and their relevance in predicting future price movements. These patterns can offer valuable insights into potential bullish or bearish trends.

Volume Analysis: He emphasizes the importance of volume analysis in confirming price trends. An increase in trading volume during a breakout or breakdown can validate the significance of a price move.

Dave Bartosiak's technical analysis approach adds depth to our understanding PACS Group’s stock chart. By paying attention to moving averages, support and resistance levels, chart patterns, technical indicators, and volume, he equips investors with a comprehensive toolkit for making well-informed decisions in the stock market. Remember, while technical analysis is a valuable tool, it's important to consider other factors like fundamental analysis and market sentiment before making investment choices.


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