It is clear to see from the declining MFI that Healthway's price lacks buying momentum. Price is currently at 12c, midpoint of a cup pattern formed from June to August this year. The brim of the cup is at 14.5c and the trough at 9.5c. A cup and handle formation is usually an uptrend continuation pattern but this handle is too long. The 20dMA, 50dMA and 100dMA have all bundled above recent price action and impose resistance at 12.5c. Support is provided by the rising 200dMA, currently at 11c. With the proposed rights issue and a TERP of 11c, the support provided by the 200dMA might be tested in time. However, volume has been diminishing with the declining price. There is no negative divergence and I do not foresee any drastic price decline.
On the weekly chart, we see a buy signal on the MACD, the first in 4 months. However, the lack of buying momentum and volume makes this signal suspect. The rising 50wMA provides support at 10.5c in case of a bigger price decline.
Strategy: Overall, price action looks rather weak. Buying now would be a hedge at best and it would be a long term investment. As I am already vested, I will accumulate if a pullback to 11c happens.
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