This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Health Care Stocks Are Soaring; Here's How to Invest in Them

NEW YORK (TheStreet) -- Health care-related stocks such as Aetna (AET - Get Report)CNO Financial (CNO) and UnitedHealth (UNH - Get Report) have become momentum trades. Today I'll provide you with information on how to trade them.

Share prices have moved higher for seven of the eight health care stocks in today's "Crunching the Numbers" table (see page 2). The table contains key moving averages, and all eight stocks are above all moving averages, which is a sign of technical momentum.

All eight also have either rising or overbought 12x3x3 weekly slow stochastics, another sign of technical momentum.

The rush to enroll in Obamacare is a factor for these stocks, as open enrollment on HealthCare.gov comes to an end on March 31.

If you already own any of these companies, you can use this information to adjust positions. If you are building positions, consider adding to longs using good 'til cancelled limit orders to buy weakness to a moving average or value levels shown in the table.

If you are reducing positions to book profits, consider doing so using GTC limit orders to sell strength to a moving average or to the risky levels shown in the table.

Aetna ($75.39 vs. $68.59 on Dec.31, up 9.9% year to date) is the nation's largest health benefits company. Shares traded as low as $64.68 on Feb. 13 then rallied to a new all-time intraday high at $76.38 on Thursday. The stock stayed just above its 200-day simple moving average at the 2014 low and tested my quarterly value level at $66.86, providing a buying opportunity. The weekly chart is positive, with its five-week modified moving average at $71.52. This month's value level is $71.03.

Centene (CNC) ($65.20 vs. $58.95 on Dec. 31, up 11% YTD) provides health care services to individuals. The stock traded as low as $56.88 on Feb. 4 staying above its 200-day SMA. The stock traded to a 2014 intraday high at $65.67 on Thursday. The stock began the year below my semiannual pivot, now a value level at $59.60 and tested my quarterly value level at $57.28 at the low. The weekly chart is positive but overbought with the five-week MMA at $62.60. This month's risky level is $67.40.

CNO Financial ($19.15 vs. $17.69 on Dec. 31, up 8.3% YTD) is the parent of insurance companies including Colonial Penn and Bankers Life. Agents of Bankers can sell health care plans offered by Humana. The stock traded as low as $16.07 on Feb. 5 and set a multiyear intraday high at $19.26 on Thursday. The stock began the year below a quarterly pivot at $17.86, which is now a value level. The weekly chart is positive but overbought with the five-week MMA at $18.26. A monthly risky level is $19.47.

Health Net (HNT) ($34.89 vs. $29.67 on Dec. 31, up 18% YTD) is a managed care provider. The stock moved above its 200-day SMA on Jan. 14 and traded to a 52-week intraday high at $35.70 on March 11. The weekly chart is positive but overbought with the five-week MMA at $33.22. My semiannual pivot at $33.12 is now a value level, and there are annual and semiannual risky levels at $36.55 and $39.45, respectively.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AET $99.31 -0.21%
UNH $113.66 -0.34%
AAPL $130.42 1.26%
FB $80.41 1.07%
GOOG $555.48 2.13%

Markets

DOW 18,214.42 -10.15 -0.06%
S&P 500 2,110.74 -3.12 -0.15%
NASDAQ 4,987.89 +20.7530 0.42%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs