During Tuesday's fast paced Lightning Round segment of Mad Money one caller asked host Jim Cramer about Centene (CNC) . "You have to hold this one for the long term," noted Cramer.
We last reviewed the charts of CNC on Oct. 28 and recommended that, "Stand aside on CNC as its charts suggest weakness in the weeks ahead."
Let's go to the latest charts.
In the daily bar chart of CNC, below, we can see how prices behaved in the past four weeks since our last review. The shares bounced temporarily to a slight new high and have quickly given back most of the rebound. Prices are now testing/breaking the rising 50-day moving average line and the flat 200-day moving average line.
The On-Balance-Volume (OBV) line has moved lower this month with the price action and the Moving Average Convergence Divergence (MACD) oscillator is close to crossing the zero line for an outright sell signal.
In the weekly Japanese candlestick chart of CNC, below, we can see that the recent candle patterns are bearish -- a large upper shadow followed by a large red real body and an upper shadow again this week.
Both the OBV line and the MACD oscillator show only limited strength the past two months.
In this daily Point and Figure chart of CNC, below, we can see the potential downside price target of $53-$52 and this could mean we see the September lows get broken.
In this weekly Point and Figure chart of CNC, below, we can see a potential upside price target of $97 but that target could "disappear" if prices decline to the $52 area first.
Bottom-line strategy: I can understand that companies can have bullish long-run fundamentals, but I have to deal with the charts as they present themselves here and now. CNC still does not look like a stock I want to buy at current levels.
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