We have reviewed the charts of Centene Corp. (CNC) a number of times and frankly the charts were not all that strong looking. I took a fresh look at the charts today and I was surprised by how much they improved.
(For more, see Jim Cramer: Trust Your Instincts Not the Direction of the Stock)
In this daily bar chart of CNC, below, we can see that prices dipped into late April but then quickly reversed to the upside. Prices are back above the rising 50-day moving average line and the flat 200-day line. CNC is testing the highs of January and it is not far from the highs of November.
The On-Balance-Volume (OBV) line has been gaining strength from the middle of February and tells us that buyers are now more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is pointed upwards.
In this weekly Japanese candlestick chart of CNC, below, we see a promising looking picture. We can see the prior highs of the past year or so and they should not be much in the way of resistance. There are some upper shadows above $70 instead of real bodies. This tells me that there was not as much trading above $70 and not as many traders or investors that may be waiting to "get even".
The weekly OBV line is close to making a new high for the move up and the MACD oscillator is in its most bullish position in a very long time.
In this Point and Figure chart of CNC, below, we used daily price data with a percentage move scaling. A trade at $73 should get things moving on the upside. A $93 price target is indicated.
Bottom line strategy: Aggressive traders could go long CNC at current levels and on strength to $73 and higher. Risk to $65 for now. $93 is our initial price target.
