For his final "Executive Decision" segment of Mad Money Friday night, Jim Cramer checked in with Michael Neidorff, chairman, president and CEO of Centene Corp. (CNC) , the health plan provider that just concluded a virtual investor day.
The company recently raised its full-year earnings per share guidance by $0.20, from $4.76 to $4.96 a share. Neidorff said the company has seen a decrease in ER visits and other claims as people avoid hospitals and defer elective procedures, but this under-utilization will not last forever.
When asked what Americans can do to prevent a second wave of infections and lockdowns, Neidorff said until we have a vaccine, masks are the answer. He said Asian countries that have a mask culture have seen dramatically lower death rates than we have here in the U.S.
Let's check out the charts.
In the daily bar chart of CNC, below, we can see prices have slipped lower in recent sessions after trading sideways for about seven weeks. CNC is below the cresting 50-day moving average line but above the rising 200-day moving average line.
The daily On-Balance-Volume (OBV) line peaked in January and is still in a declining mode telling us that sellers of CNC have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is crossing the zero line for an outright sell signal.
In the weekly bar chart of CNC, below, we can see a mixed to weaker picture. Prices are still above the rising 40-week moving average line but the weekly OBV line is rolling over and the MACD oscillator is poised to cross to the downside again for another take profit sell signal.
In this Point and Figure chart of CNC, below, we can see a potential downside price target in the $56-$55 area.
Bottom-line strategy: In the short-run the charts of CNC look vulnerable to a deeper dip. It remains to be seen whether support develops in the $56-$55 area.
