In his second "Executive Decision" segment of Mad Money Tuesday evening, Jim Cramer again sat down with Michael Neidorff, chairman and CEO of Centene Corp. (CNC) , the health plan provider with shares that are up over 50% in just the past four months.
Neidorff said that Centene is still not a household name, but they are a $100 billion company and have $7 billion in organic growth. He reiterated that the Affordable Care Act has been a success and people on the program love it.
Let's see what the charts look like the day after the State of the Union address.
In the daily bar chart of CNC, below, we can see that prices turned sharply higher in early October when the broad market soared. In less than a month prices rallied above the 50-day moving average line and the slope of the line turned positive by the end of the month. CNC also closed above the bottoming 200-day line by the end of October. Impressive gains. Recently CNC has corrected to the downside and just closed slightly below the cresting 50-day moving average line.
There is some weakness in the daily On-Balance-Volume (OBV) line, which tells us that sellers of CNC have been more aggressive lately. The Moving Average Convergence Divergence (MACD) oscillator crossed to a take profits sell signal back in late November and is now close to the zero line and a possible sell signal.
In this weekly bar chart of CNC, below, we can see that the indicators on this time frame are showing the beginning of some weakness.
Prices are still above the rising 40-week moving average line but the weekly OBV line has turned down and the MACD oscillator has been narrowing.
In this daily Point and Figure chart of CNC, below, we can see that the software is projecting a potential downside price target in the $59 area. Not a big decline but it could weaken further.
In this weekly close only Point and Figure chart of CNC, below, we can see a potential longer-term price target of around $94.
Bottom-line strategy: CNC could experience a sideways trading range bounded by $58 and $66 for several weeks. Longer-term, new highs to the $94 area may be seen.