Humana Inc. (NYSE:HUM) makes the cut for our trade idea of the day today thanks to a recent channel formation breakout and the prospect of a resistance level break any day now. We believe that with a resistance level break, shares of HUM could start climbing back up to their 52 week highs, which could lead to some nice returns.
HUM shares topped out in the summer of 2015 at $218.76 and have been in a correction ever since, trimming about 29% from top to bottom. However, shares have started to move higher over the last few weeks and with this several week rally, were able to break a downward channel formation that was in place for several months, and are now close to breaking out of a key resistance level. The level we are looking to break is the $182 - $183 level, and it looks like all it takes is a small push and we will be there. Above that, resistance comes in at $190 and the high at $218. Looking at support, $167 followed by $155 are levels that bulls will be watching for on weakness.
Our trade strategy would be to enter the stock upon a successful break of the $183 level. We’re so close right now, as such we would watch for a strong close above $183 per share as our entry signal. Upon a successful entry, we would place our target price at $218 and set a stop loss level at $179. Based on a $183 entry level, our upside potential would be 19.1% while our downside risk would be a miniscule 2.2%.
The stock price direction for the day for HUM is DOWN. The stock is experiencing an uptrend as of late, with an increase of more than 5 percent in the last three days. However, today there is hesitation in the stocks direction, and consequently there is a minor drop in today’s share price. The stock price decrease was too weak to signal a trend reversal at this time, but should the stock decrease tomorrow; a trend reversal may be occurring. Based on BullishInvestor.com’s proprietary algorithms, HUM is currently signalling NEUTRAL.
The most recent Candle Stick pattern for HUM is the Belt-hold.
There are two possible reasons for the Hold rating currently given to HUM. The first reason is that there may be indecision among the technical indicators or most of them may be neutral for HUM. If the stock chart looks flat lined or is in the midst of a trend direction change, most likely this is why HUM is showing Neutral. If, however the stock is currently in a visible up or down trend, the reason for the Hold may be because the BULLISH or BEARISH rating has already passed.
The last BUY was registered on May 01, 2024 when HUM was trading at $ 314.21. Armed with this knowledge, there may still be some more strength left in this current trend or it may be near a tipping point, the market has not given a clear indication yet.
As such, it may be a wise decision to hold your stock or continue to wait on the sidelines in HUM until BullishInvestor.com changes the rating for HUM.