When we issued our earlier analysis on Centene Corp. (CNC), the stock was spiraling lower. Shares had collapsed into the high $20s, and we highlighted that the panic-driven selloff created a rare asymmetric opportunity for options traders. Specifically, we recommended the Jan 2027 $40 Call as a high-upside LEAPS entry.
Today, CNC has rebounded into the mid-$30s, and the $40 call has surged in value — delivering substantial returns. Let’s revisit what has changed, compare old vs. new data, and quantify the gains.
🔙 CNC Back Then
At the time of our first callout:
- Stock Price: ~$28–29
- RSI: Deep oversold at ~25, a level historically tied to exhaustion selling.
- MACD: Strongly negative, but showing early signs of flattening.
- Options Chain: The $40 strike call was trading at just $3.90.
This was a contrarian setup — extreme fear combined with long-dated LEAPS at attractive pricing.
📊 CNC Now
Fast-forward to today:
- Stock Price: ~$34.86
- RSI: Back to ~67 on the daily chart, signaling bullish momentum from extreme lows.
- MACD: Both daily and weekly MACD have flipped positive, confirming momentum shift.
- Options Chain: The $40 strike call now trades at $6.45.
💰 Profit Breakdown
- Old Price (Then): $3.90
- New Price (Now): $6.45
- Profit per Contract: $2.55
- Total Dollar Profit (100 shares): $255
- Percentage Gain: ~65%
That means a $390 investment in one contract has grown to $645, in just a few months.
🔍 Technical Comparison
- Then: Oversold RSI, collapsing price, capitulation selling.
- Now: RSI rebounded strongly, MACD bullish, volume accumulation visible. CNC has formed a higher base in the $30–35 range, strengthening the case for continued recovery.
🚦 Takeaway
Our CNC options thesis has played out as expected. If you had followed the recommendation to buy the Jan 2027 $40 Call, you’d now be up 65% on your position.
This highlights why LEAPS strategies in oversold, fundamentally stable companies can deliver outsized returns with relatively modest capital outlay.
The next key technical test will be the $35–38 resistance zone. If CNC breaks above, the $40 calls could move even deeper into the money, amplifying gains further.
✅ Disclaimer: This update is for educational and informational purposes only. It does not constitute financial advice. Options trading involves substantial risk and may not be suitable for all investors. Always conduct your own due diligence and consult a licensed financial advisor before making any investment decisions.
