Centene Stock Jumps 4.36% in Fourth Straight Gain as Technicals Signal Rebound

Centene Corporation (CNC) recorded a 4.36% gain on July 1, 2025, marking the fourth consecutive day of advances and bringing the cumulative four-day rally to 5.86%. This positive momentum occurs against the backdrop of an extended downtrend from the September 2024 peak, prompting a comprehensive technical review.
Candlestick Theory
Centene formed a bullish engulfing pattern on June 30 and July 1, 2025, with the latter session’s 4.36% surge decisively overpowering the prior day’s range. This pattern suggests potential exhaustion of the prior downtrend, especially as it occurred near the 52.93 support level established on June 23. Resistance is evident near the 100-day moving average (around 58.50) and the psychological $60 threshold, while the 52.93 low serves as critical near-term support. Earlier bearish signals included a dark cloud cover in late April near $65, which preceded a significant breakdown.
Moving Average Theory
The 200-day moving average (approximately 63.50) maintains a downward slope, confirming the long-term bearish trend. However, the 50-day MA (circa 56.20) has recently flattened, hinting at near-term consolidation. Crucially, the July 1 close of 56.645 breached the 50-day MA, a potential bullish signal, though it remains below the descending 100-day MA (approx. 58.50). A sustained move above the 50-day MA may open a path toward testing the 100-day level, but the overall moving average configuration (with the 50-day below the 200-day) still reflects a medium-term downtrend.
MACD & KDJ Indicators
The MACD histogram turned positive in late June, indicating building upward momentum as the signal line crossover occurs below the zero line. Concurrently, the KDJ indicator (particularly the J-line) rebounded from oversold territory below 20 in late June and now approaches the 50 midline. This convergence of improving momentum across both oscillators supports the current rebound, though the MACD’s position in negative territory warrants caution against overextended gains. Notably, a bearish divergence emerged in April as prices failed to exceed the February high while MACD peaked lower.
Bollinger Bands
Centene’s price broke above the middle band (20-day SMA near 55.50) on July 1, a move that typically signals short-term strength. The bands had narrowed significantly during the June consolidation, suggesting subdued volatility before the breakout. With the price now challenging the upper band (approx. 57.50), a period of band expansion may emerge. Sustained trading above the middle band would be bullish, but rejection at the upper band could trigger a pullback toward 55.50 support, aligning with the recent candlestick low.
Volume-Price Relationship
The four-day rally was accompanied by progressively increasing volume, peaking at 8.1 million shares on July 1. This rising volume during the ascent confirms buyer conviction, lending credibility to the breakout. Notably, the June 23 low of 52.93 occurred on relatively low volume (3.7 million shares), suggesting limited selling pressure at that level. Conversely, the high-volume breakdown below $60 in April (over 14 million shares) establishes that zone as formidable resistance, as capitulatory selling often anchors future supply zones.
Relative Strength Index (RSI)
Centene’s 14-day RSI rebounded from oversold (sub-30) territory in late June and now reads approximately 57. This neutral positioning allows room for further upside without immediate overbought concerns. However, the prior failure to breach 60 during March 2025’s bear market rally highlights the indicator’s tendency to form lower highs, a pattern that would need to be invalidated with a move above 60 RSI to signal stronger momentum. The oversold bounce in June lacked divergence, underscoring the downtrend’s persistence.
Fibonacci Retracement
Applying Fibonacci levels to the downtrend from the September 2024 high of 80.59 to the June 2025 low of 52.93, the 38.2% retracement sits at 63.50, followed by the 50% level at 66.76 and the 61.8% at 70.01. The current rally has yet to challenge even the 23.6% retracement (56.95), which the stock exceeded on July 1. A confirmed break above 56.95 may trigger moves toward 60.00, but stronger resistance awaits at 63.50 (38.2%)—a zone that aligns with the 200-day MA and the April 2025 breakdown point, creating a high-probability reversal area.
Confluence and Divergences
A notable confluence exists between the 38.2% Fibonacci level (63.50), the 200-day MA, and the April 2025 breakdown point, making it a critical resistance area for any recovery. The lack of bearish divergences during the June low (RSI and MACD both confirmed the bottom) reinforces the current rebound’s validity. However, traders should monitor for overbought signals near 60.00 as short-term indicators approach stretched levels. The bullish volume and candlestick patterns align positively with the MACD and KDJ momentum shifts, offering a tactical opportunity for continued upside toward $60, provided the 50-day MA holds as new support. A close below 55.50 would invalidate this constructive view.