Short

Centene Corp - 25% Short Opportunity?

A government-sponsored health care company which looks like it's in trouble.

Is it time to short it?

Fundamental indicators:

Revenue and Profits - although revenue has been consistently growing for the past 10 years, the profits remained consistently low. Earnings (EBIT) are insufficient to safely cover interest payments on company debt
Profit margin - very low at 2% in 2021
P/E - extremely overpriced considering poor fundamentals - 31x ratio
Liabilities - debt relative to shareholder equity is rising

Technical Analysis (Elliott Waves):

This company has survived 2008 financial crisis and enjoyed explosive growth since then
However, the impulse like movement peaked in December 2018 with completion of a global wave 3 and since then it has been forming a complex Running Correction
With poor fundamentals and difficult economical situation it is very likely that wave X has completed and we are observing the development of wave Y to the downside now
There are two options for the final corrective wave - (1) a rapid impulse completing a Running Flat correction as ABC, or (2) complex form of a wave similar to wave W
The target for this wave is in the range of $64 to $57, representing 0.786x and 1x Fibonacci retracement levels against wave W

What do you think about this scenario for Centene Corp?

Please share your thoughts in the comments and like this idea if you would like to see more stocks analysed using Elliott Waves.

Thanks

vitalalyt

In search of the optimal signals

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vitalalyt

In search of the optimal signals