GoHealth Stock Ready to Breakdown? – March 19, 2021

A key support level has formed in the chart of GoHealth Inc. (GOCO).  If the stock falls under this level, a breakdown could occur.

GOCO is a health insurance marketplace in America. Its technology platform leverages modern machine-learning algorithms and helps individuals find the best health insurance plan for their specific needs.

The company is a fairly recent IPO and had a strong 2020 with revenue hitting $445.9 million, up from $163.36 million in the previous quarter. Its marketplace has been able to help seniors choose their healthcare in a Medicare market expected to see strong growth.

While the company’s cash was only $144 million as of December, it was still much higher than its short-term debt of $4 million. Revenue is expected to rise 37.9% this year, while earnings are forecasted to explode by 350%.

Its stock has a low valuation with a forward P/E of 16.21. From a performance standpoint, GOCO has shown positive recent momentum, but is down 15% for the month.

Take a look at the 1-year chart of GOCO below with added notations:

GOCO has created a key level of support at the $10 (green) level over the past several months. The stock may make its way back down to that level again, thus yet another bounce may occur.

However, if the support were to break, lower prices will likely follow for GOCO.  If the stock were to break below the $10 level, a short position could be entered.

Author: Christian Tharp, CMT