HCA Healthcare Stock Ready To Break Out

Shares of HCA Healthcare Inc (NYSE:HCA) hit a record high in late January, thanks to a positive reaction to the healthcare company's earnings report. This just mirrored the stock's recent technical tenacity, having broke out above a long-term flag pattern in December. More recently, the security has pulled back to its 2015 highs, making now an opportune time to join HCA on its next leg higher.

And while HCA has surged more than 22% over the past six months, there are still some skeptical analysts sitting on the sidelines. Of the 19 brokerages covering the shares, six continue to maintain a "hold" or worse rating, leaving the door open for upgrades to draw more buyers to the table.

Plus, shorts have been in cover mode since the early November peak. Though these bearish bets have declined more than 45% since then, it would still take almost four days to cover the remaining shorted shares, at the average pace of trading. This points to ample sideline cash to help keep the wind at HCA's back.

It's an attractive time to purchase premium on these call options, too, with the June implied volatility of 30.65% among the cheapest across the term structure.

Subscribers to Schaeffer's Weekend Trader Alert options recommendation service received this HCA commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.