Centene Shares Are Definitely Not Healthy

The healthcare enterprise reports earnings Tuesday before the market opens.

The charts of healthcare company Centene (CNC) have looked bearish ever since our review of February 10, 2022 where I recommended that "It looks like CNC has made a short-term top reversal with an earnings beat. When prices decline on good news it is a sign to sell. Traders who are long CNC should sell and take their profits."

Centene is scheduled to report their quarterly numbers on Tuesday and the charts are still weak. Let's check.

In this daily bar chart of CNC, below, I can see that prices made an unstainable rally in July and August. This rally ultimately became the "head" of a head and shoulder top formation. Prices declined in September and October and broke the June lows. CNC made yet another rally into early December (the "right shoulder") and has declined in recent weeks to break the October low. CNC now trades below the bearish 50-day moving average line and the declining 200-day line.

The On-Balance-Volume (OBV) line has been weak since August and tells me that sellers of CNC have been more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is bearish. 

 

In this weekly Japanese candlestick chart of CNC, below, I see a bearish picture. Prices have made a top pattern since late 2021. A neckline can be "seen" across the $75 area or level. The slope of the 40-week moving average line is negative. The weekly OBV line has been weak since September. The MACD oscillator is bearish.

 

 

In this daily Point and Figure chart of CNC, below, I see a chart in a downtrend with a downside price target in the $65 area.

 

 

In this weekly Point and Figure chart of CNC, below, I can see a more bearish picture with a target in the $55 area.

 

 

Bottom line strategy: I have no special knowledge of what CNC will tell shareholders Tuesday morning but the charts and indicators are weak and I would look for further declines in the stock price in the weeks ahead.

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