Coventry Health Care Attractive Longer-Term Play


Coventry Health Care Inc. (NYSE:CVH) is a managed healthcare company with health plans, insurance companies, network rental and workers’ compensation services companies.  As a general theme, health-care remains an attractive play due to the aging U.S. population, specifically targeting the baby boomer generation. 

Given where we are in the broader market and economic cycle I am hard pressed to come up with many long-side trades but with a long enough time horizon a position in the health care sector may be worth considering.

 On the weekly chart dating back to late 2008 note the nice up trending channel in which Coventry Health Care Inc. (NYSE:CVH) has been moving higher.  The channel remains in place and the stock again found support near the lower end of the channel during the broad market sell-off in early August. 


The daily chart of Coventry Health Care Inc. (NYSE:CVH) shows that the stock is currently wedged between its 50 and 200 day moving averages.  Historically the stock has showed decent respect to these moving averages.  The 50 day simple moving average at the moment sits above the stock’s price around $33.70.  At the same time a horizontal resistance area is right at the stock’s current price of $32.90.  Given these multiple layers of resistance, should the stock manage to move above them and hold I could see a good opportunity to start building a longer-term position in the stock.  Stops could be set near $30.50 with an initial price target at the July highs near $38

Leave a Reply

Your email address will not be published. Required fields are marked *