NEW YORK (TheStreet) -- I have been positive about the health care industry as profits increase on new business mandated by the Affordable Care Act.
Six of the eight companies profiled here beat analysts' earnings estimates for the second quarter, and all have set all-time or multiyear intraday highs this year. The biggest year-to-date gainers are Health Net (HNT) , which is up 58%, Centene (CNC) , up 34%, and WellPoint (WLP) , up 28%.
Dow component UnitedHealth Group (UNH) has announced that it will participate in as many as 24 of Obama Care's individual health insurance exchanges in 2015, up from four this year.
Most insurance companies have indicated that they will have contingency plans for the upcoming enrollment period as they are worried that a flood of traffic could result in new glitches in healthcare.gov.
During the first enrollment period last year, the Web site had back-end problems with connections to insurers, and that resulted in consumers' complaints, tying up phone lines. By a government count, 10.3 million people are enrolled in Obamacare.
The profiles below provide trading guidelines for the stocks and two 'crunching the numbers" tables follow.
Aetna (AET) ($83.95) set an all-time intraday high at $85.72 on July 22, and fell as low as $74.81 on Aug. 7, even though the company reported higher-than-expected earnings on July 29. The stock is above all five moving averages in today's first "crunching the numbers" table with rising 12x3x3 weekly slow stochastics.
Semiannual and weekly value levels are $82.98 and $80.61, respectively, with monthly and quarterly risky levels at $84.38 and $87.87, respectively.
Centene ($78.93) set an all-time intraday high at $81.98 on July 22, and fell as low as $70.98 on Aug. 6, even though the company posted earnings that beat estimates on July 22. The stock is above all five moving averages in today's first "crunching the numbers" table with rising 12x3x3 weekly slow stochastics.
Weekly and semiannual value levels are $74.34 and $74.28, respectively, with monthly and semiannual risky levels at $81.00 and $82.74, respectively.
CNO Financial Group (CNO) ($17.45) set a multiyear intraday high at $19.33 on March 11, and traded as low as $15.55 on May 19. The stock has been trading around its 200-day simple moving average since May 7, when the average was $16.40.
CNO reported earnings that missed estimates on July 28, and its stock fell to a secondary low at $15.89 on Aug. 1. The stock closed Monday on the cusp of its 200-day SMA, which is now at $17.38.
The weekly chart is positive with its five-week modified moving average at $17.30. Monthly and semiannual value levels are $16.92 and $15.03, respectively, with a weekly pivot at $17.01 and semiannual and quarterly risky levels at $17.80 and $20.53, respectively.
Health Net ($46.95) set a multiyear intraday high at $47.45 on Aug. 29. The stock is above all five moving averages in the first table and has overbought 12x3x3 weekly slow stochastics.
Weekly and quarterly value levels are $45.62 and $39.49, respectively, with a monthly risky level at $48.27.
Humana (HUM) ($129.55) set an all-time intraday high at $134.93 on July 22, and fell to $115.51 on Aug. 7 after reporting earnings that matched estimates on July 30. The stock is above all five moving averages in today's first table with rising 12x3x3 weekly slow stochastics.
Weekly and semiannual value levels are $123.45 and $116.89, respectively, with monthly and semiannual risky levels at $132.11 and $133.52, respectively.
UnitedHealth Group ($87.91) set an all-time intraday high at $88.45 on Sept. 4, after trading as low as $78.74 on Aug. 8, even though the company reported higher-than-expected earnings on July 17. The stock is above all five moving averages in today's first table with rising 12x3x3 weekly slow stochastics.
Weekly and monthly value levels are $85.85 and $84.95, respectively, with a semiannual risky level at $93.64.
WellCare Health Plans (WCG) ($66.52) set a multiyear intraday high at $78.38 on May 27, and traded as high as $77.78 on July 24. On the next day, the company reported quarterly results that missed analysts' estimates and offered a cautious forecast. The stock plunged to as low as $59.72 on Aug. 7. This is the only stock that's below its moving averages. WellCare closed Monday below its 50-day and 200-day SMAs at $67.59 and $68.28, respectively.
Despite this weakness, the weekly chart is now positive with its five-week MMA at $66.16. Monthly and annual value levels are $64.46 and $57.19, respectively, with quarterly and semiannual risky levels at $76.32 and $91.10, respectively.
WellPoint ($118.13) set an all-time intraday high at $119.19 on Sept. 5, after trading as low as $106.52 on Aug. 8, even though it reported earnings that topped estimates on July 30. The stock is above all five moving averages in today's first table with overbought 12x3x3 weekly slow stochastics.
Monthly and semiannual value levels are $115.29 and $108.51, respectively, with a weekly pivot at $117.35 and no risky levels.
Crunching the Numbers with Richard Suttmeier: Moving Averages & Stochastics
This table provides the technical status for the stocks profiled in today's report.
I show the 12-month trailing price-to-earnings ratio and dividend yield.
There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.
The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.
Interpretations: Stocks below a moving average are listed in red.
Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.
A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.
A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.
A stock with a neutral technical rating has a profile that is not positive or negative.
The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three- to five-year horizon.
The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.
The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.
The 200-Day Simple Moving Average is another technical support or resistance and I consider this level as a shorter-term "reversion to the mean" over a rolling six- to 12-month horizon.
Crunching the Numbers with Richard Suttmeier: Earnings & Where to Buy & Where to Sell
EPS Date is the day the company reported their quarterly results.
Beat or Miss with a miss in red.
Reported EPS is the actual earnings per share reported by the company.
Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.
Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.
At the time of publication, the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff
TheStreet Ratings team rates AETNA INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate AETNA INC (AET) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, attractive valuation levels, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins."
- You can view the full analysis from the report here: AET Ratings Report