Centene Corp - 25% Short Opportunity?

NYSE:CNC   Centene Corporation
A government-sponsored health care company which looks like it's in trouble.

Is it time to short it?

Fundamental indicators:
  • Revenue and Profits - although revenue has been consistently growing for the past 10 years, the profits remained consistently low. Earnings ( EBIT ) are insufficient to safely cover interest payments on company debt
  • Profit margin - very low at 2% in 2021
  • P/E - extremely overpriced considering poor fundamentals - 31x ratio
  • Liabilities - debt relative to shareholder equity is rising

Technical Analysis ( Elliott Waves ):
  • This company has survived 2008 financial crisis and enjoyed explosive growth since then
  • However, the impulse like movement peaked in December 2018 with completion of a global wave 3 and since then it has been forming a complex Running Correction
  • With poor fundamentals and difficult economical situation it is very likely that wave X has completed and we are observing the development of wave Y to the downside now
  • There are two options for the final corrective wave - (1) a rapid impulse completing a Running Flat correction as ABC, or (2) complex form of a wave similar to wave W
  • The target for this wave is in the range of $64 to $57, representing 0.786x and 1x Fibonacci retracement levels against wave W

What do you think about this scenario for Centene Corp?

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