Aetna Inc (NYSE:AET) and Community Health Systems (NYSE:CYH) are bothlower this morning, along with a host of other healthcare stocks, after news of the big team-up between Amazon.com, Berkshire Hathaway and JPMorgan Chase to provide cheaper healthcare options for employees. Below, we will take a look at what this bombshell is doing to shares of AET and CYH.
Aetna stock is down 3.3% to trade at $187.34 this morning, on track to snap its four-day winning streak. AET shares have tacked on 62% year-over-year and hit a record high of $194.40 yesterday. However, after yesterday's close, the equity sported a 14-Day Relative Strength Index (RSI) of 81, which is deep in overbought territory, indicating today's breather may have been in thecards, regardless.
Analysts remain divided over the healthcare giant. Exactly half of the brokerages covering the stock rate it a "buy" or better, and AET's average 12-month price-target sits at $200.82. Elsewhere, bears have been moving in, with short interest jumping 38% in the last reporting period.
Community Health stock is down 1.2% to trade at $5.70, after Wells Fargo resumed coverage of the hospital operator with a tepid "underperform" rating and $4.50 price target. The equity has shed 44.6% in the last nine months, and recent breakout attempts were turned away at the $6 level. It appears this pullback was also imminent. As of yesterday's close, CYHsported a RSI of 68, on the cusp of overbought territory.
Short sellers are likely cheering the healthcare stock's struggles today. Short interest increased by 3.7% during the last two reporting periods to 32.70 million shares -- the highest point on record. This represents a whopping 31% of CYH's total available float.