Chart Courtesy of StockCharts.com
Humana (NYSE: HUM) and Aetna (NYSE: AET) may be forecasting a
tough future for the health care debate.
Chart Courtesy of StockCharts.com
News of government intervention in setting health insurance rates
in California last week may be eclipsed by news that President
Obama is putting forth a proposal that would allow the federal
government to limit rates for insurers accross the country.
To be sure, health insurance rates are a problem. And so is access to care in
many cases. But from a market standpoint, the charts of both Aetna and Humana
have been looking increasingly negative for several weeks.
This is important because, until recently, the news about the fate of health
care legislation had been positive for the insurers, as the legislation looked
to have stalled. Yet, the Democrats seem to have regrouped, and the potential
for passage of the controversial legislation that has already been agreed to
by the majority is on the rise.
The clues that something was up started popping up in December 2009 for Aetna,
and in January for Humana. Both stocks have been steadily falling respectively
since then. Both are now trading below their 20 and 50 day moving averages, which
means that their short and intermediate term trends are heading lower.
Aetna is in a bit worse shape technically than Humana, as it's close to breaking
below its 200-day moving average, the line that divides bull markets from bear
markets. A sustained break below that key area would signal that investors are
giving up on the stock over the long term.
Humana is well above its 200-day line, which means that it could fall for a long
time before long term investors decide whether they want to take a chance.
The bottom line is that the market's message is pretty clear. It's a good idea
to stay away from these two stocks for now as the sellers seem to have gained
the edge over the buyers.
Correction: On 2-19, in this space, we reported that Halliburton was reportedly
trying to merge with Smith International. It is Schlumberger that is reported
to be looking to merge with Smith.
Make money if any market rises or falls, with a copy of "Market Timing For Dummies."
“Futures And Options For Dummies,” Dr. Duarte’s
latest book is now available. The markets are responding to news
and geopolitical developments like never before. In this environment,
individual investors need to expand their investment horizons. "Futures And Options For Dummies " (John Wiley & Sons)
has an excellent section on oil futures as well as the currency markets,
while covering and expanding on the successful strategies in Doctor
Duarte's other books. Order your copy today.
Doctor Joe Duarte's Market I.Q., offers subscribers a unique blend of intelligence, market commentary and trading strategy. Duarte's daily articles, and news summaries offer recommendations and analysis for ETFs, and individual stocks in the technology, health and biotechnology, and energy sectors. Doctor Duarte is a writer, and an emerging futurist, with a diverse background, and a growing audience. His combined expertise in health care, energy, and the effects of politics and global intelligence on the financial markets offer a unique blend of insight and information to thousands of active investors and political and intelligence aficionados around the world on a daily basis.
He is the author of four books: "Futures And Options For Dummies," "Successful Energy Sector Investing," "Successful Biotech Investing" and co-author of "After-Hours Trading Made Easy."
In early 2001 Dr. Duarte in "Successful Energy Sector Investing," correctly predicted that Venezuela's political problems could lead to an energy crisis in the United States.
In 2003, also Dr. Duarte was among the first to widely publicize the long-term friendship between French President Jacques Chirac and Saddam Hussein.
He has also appeared as a weekly guest on Market Mavens Radio, has logged appearances on KNX radio in Los Angeles, Financial Sense.com radio, and Wall Street Radio.
One of CNBC's original Market Mavens, Dr. Duarte has been writing about the financial markets since 1990.
His articles and commentary have been featured on CBS Marketwatch, Barron's, Smart Money, Medical Economics, and in Technical Analysis of Stocks and Commodities magazines.
In 2003, Doctor Duarte received second place, in the professional section, of the Medical Economics Investment Challenge with a 12-month return of 42%.
Joe-Duarte.com is independently operated and solely funded by subscriber fees. This web site and the content provided is meant for educational purposes only and is not a solicitation to buy or sell any securities or investments. All sources of information are believed to be accurate, or as otherwise stated. Dr. Duarte and the publishers, partners, and staff of Joe-Duarte.com have no financial interest in any of the sources used. For independent investment advice consult your financial advisor. The analysis and conclusions reached on Joe-Duarte.com are the sole property of Dr. Joe Duarte.
| 
