Health Net, Inc. (NYSE: HNT)

Health Net, Inc., through its subsidiaries, provides managed health care services. The company offers commercial health care products, such as health maintenance organization plans through contracts with participating network physicians, hospitals, and other providers; preferred provider organization plans that provide coverage for services received from health care provider; and point of service plans. It also provides Medicare products, including Medicare advantage plans with and without prescription drug coverage; and Medicare supplement products that supplement fee-for-service Medicare coverage. In addition, the company offers Medicaid and related products; indemnity insurance products; auxiliary non-health products, such as life, accidental death and dismemberment, dental, vision, and behavioral health insurance; and other specialty services and products comprising pharmacy benefits, behavioral health, dental, and vision products and services, as well as managed care products for hospitals, health plans, and other entities. Further, it engages in government-sponsored managed care federal contract with the Department of Defense under the TRICARE program in the North Region.

Please take a look at the 1-year chart of HNT (Health Net, Inc.) below with my added notations:

1-year chart of HNT (Health Net, Inc.)

HNT is approaching a very important price of $30 based on two different levels of potential support. First, the $30 level itself (red) has simply been key to the stock on multiple occasions already. In addition, HNT has been holding an uptrending level of support (blue) as well and that trendline is also sitting near the $30 area.

The Tale of the Tape: HNT appears to be pulling back to $30. A long trade could be entered there with a stop placed below $30. However, a short play could also be made on a break of the two levels highlighted.

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Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT