Health Rally: Trump’s Obamacare Subsidies Save the Sector

By Ion Jauregui – Analyst at ActivTrades

Health insurance stocks in the United States started the week with strong gains. Centene (NYSE: CNC) and Molina Healthcare (NYSE: MOH) surged following rumors that the Trump administration plans to extend Affordable Care Act (Obamacare) subsidies for two years, a move the markets interpret as relief for 2026.

According to Politico, the White House could officially announce the plan this Monday. The proposal would include new eligibility conditions and mechanisms to prevent a sharp increase in premiums, one of the main risks for the sector. Elevance Health (NYSE: ELV) also rose more than 2%, reflecting widespread optimism among insurers.

Why it matters

The fundamental impact is clear. Without subsidies, insurers faced:

A drop in enrollments, especially among lower-income customers.

Aggressive premium increases, affecting income stability.

Greater operational uncertainty for 2025–2026.

James Harlow of Novare Capital called the news a “better-than-feared scenario,” as it reduces the possibility of a collapse in enrollments and protects sector margins.

Technical Analysis

Centene (Ticker AT: CNC.US):
After a volatile year, Centene lost highs around $71.04 following the bearish gap on July 1, falling to an annual low of $25.08 in August. Since then, the stock has initiated a gradual recovery, supported by a solid support at $33.

Moving average crosses, which previously showed a marked bearish trend, partially corrected in October, with the 50-day moving average crossing above the 100-day, indicating the beginning of a short-term recovery. The Point of Control (POC) is around $28, reflecting a key reference level for accumulation and support.

Currently, the RSI is at 63, showing a slight overbought bias, while the MACD is lateralized with a histogram in indecision, indicating consolidation.
If the trend continues and the price surpasses the 200-day moving average (approx. $44), we could see a recovery toward the previous gap zone and recent highs. If it fails, the stock could retreat back to $33.

Molina Healthcare (Ticker AT: MOH.US):
MOH corrected its range after losing support at $359.97, reaching a recent low of $133.40. It currently seems to be initiating a rebound toward the POC at $148.27, acting as the first key control level.

If the bearish pressure breaks, the stock could recover toward $190, with a possible test of resistance at $204.20. Otherwise, the price is likely to remain sideways until a new pattern is defined.

After falling 68.53% from its all-time high of $423.92 in less than two years, MOH has yet to establish a clear floor. The RSI shows a recovery move to 44.20%, reflecting a gradual sentiment shift, while the MACD indicates a resumption of the bullish trend, though it remains in negative territory, suggesting caution until sustained momentum is confirmed.

Beyond the insurers

Hospitals also benefit. Stability in subsidies reduces the likelihood of uninsured patients, protecting revenues and easing pressure on emergency and primary care.

Overall, the extension of subsidies reinforces the sector’s predictability, offering a financial breather just as political and regulatory uncertainty threatened to shake the markets.


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