In my September 23 review of Centene Corp (CNC) I wrote that "Healthcare has been an outperforming segment of the US stock market but this weakness in CNC could be a canary in the coal mine. Avoid the long side of CNC and check your other holdings in this area."
Let's check on CNC now.
In this updated daily bar chart of CNC, below, I see a weak chart picture. CNC rallied from October but the indicators did not support the gains.
The daily On-Balance-Volume (OBV) line moved sideways from October and did not confirm the price gains.
The Moving Average Convergence Divergence (MACD) oscillator has struggled to stay above the zero line the past two months and is back below it in sell territory.
In this weekly Japanese candlestick chart of CNC, below, I can see some upper shadows above $85 in recent weeks telling me that the path of least resistance is likely to be lower as traders reject the highs. CNC is below the declining 40-week moving average line.
The weekly OBV line is looking stalled in December. The MACD oscillator is in sell territory below the zero line.
In this daily Point and Figure chart of CNC, below, I can see that the software is projecting an upside price target in the $101 area but a trade at $79 or lower is likely to weaken the picture.
In this weekly Point and Figure chart of CNC, below, I see that a trade at $78.26 or lower should refresh the downward trend.
Bottom line strategy: Continue to avoid the long side of CNC.
