BreakOuts Galore in the Health Insurers

Published on Friday, 11 December 2009 09:03 Written by Guillermo Guerra

New York, Dec 11^th (TradersHuddle.com) – Given the news of toned down Healthcare bill, where the public option would no longer be a component of the bill ignited a powerful move in the health insurance sector yesterday.

Multiple stocks in the sector closed at 52 week highs with several sitting just below those levels.

Some of the healthcare companies in focus are Aetna, Inc. (NYSE:AET), Humana (NYSE:HUM), and Unitedhealth Group Inc (NYSE:UNH).

Aetna, Inc (NYSE:AET)

Aetna Inc operates as a diversified health care benefits company providing health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life, and disability plans, as well as medical management capabilities and health care management services for Medicaid plans. It operates in three segments: Health Care, Group Insurance, and Large Case Pensions

Aetna has been rallying ahead of this, and in yesterday’s session it actually pushed above short term resistance at $30, and closing at $32.

With this move Aetna (NYSE:AET) is well on its way to reach $34, which is an important resistant point in the shares of this insurer, as it coincides with the 2009 high.

Traders will focus on Aetna tomorrow, and will try to push it above $31, which will give it room for its shares to run towards $34, which is Aetna’s high for 2009.

Humana (NYSE:HUM)

Humana Inc. provides various health and supplemental benefit plans for employer groups, government benefit programs, and individuals in the United States. The company operates in two segments, Government and Commercial. The Government segment comprises beneficiaries of government benefit programs.

Humana, similar to Aetna has been rallying after Goldman’s broad sector call, and most importantly after the confirmation of no public option in the healthcare bill.

Unlike Aetna, Humana is actually trading very close to support at the 50 day moving average, even after yesterday’s move. Investors can look for a bullish position with little risk as support is defined very close to current price action, although need to keep in mind the resistance level currently set at $42.65.

Unitedhealth Group Inc (NYSE:UNH)

UnitedHealth Group Incorporated provides healthcare services in the United States. The company’s Health Care Services segment offers consumer-oriented health benefit plans and services.

Unitedhealth chart pattern is not that healthy as Aetna or Humana, as it has pretty much traded sideways in a wild political roller coaster. It was trading very close to support and investors focused on the multi-month resistance point of $30, which was broken yesterday.

With this move Unitedhealth will be attracting momentum buyers that could push the stock towards $33, which is a peak back in 2008.