Humana (HUM) shares surged in premarket trading Monday after Bloomberg reported late Friday that Cigna (CI) has resumed its efforts to merge with the struggling health insurer.

According to people familiar with the matter, the companies have held informal preliminary discussions about a potential deal, but no transaction or timeline has been agreed upon. In December last year, Bloomberg reported that the two companies walked away from an potential 澳洲幸运5官方开奖结果体彩网:acquisition after failing to agree on a price.

Shares in the health insurer have plummeted more than 40% since the start of the year as of Friday's close amid ongoing challenges including a sharp decline in 澳洲幸运5官方开奖结果体彩网:Medicare plan enrollments, mounting costs due to hig🐭her demand for medical care, and a reduction in government reimbursements.

Humana shares were up 4% at around $278 about half an hour before Monday's opening bell.

Below, we break down the 澳洲幸运5官方开奖结果体彩网:technicals on Humana’s 澳洲幸运5官方开奖结果体彩网:weekly chart and identify important pri꧑ce levels that could attract extra attention.

Potential Bear Trap

Since 澳洲幸运5官方开奖结果体彩网:retracing to the 200-week moving average in early July last year, Humana shares have traded within a 澳洲幸运5官方开奖结果体彩网:descending channel.

Importantly, the stock broke down below the pattern late last month, but promptly reversed course the following week to reclaim its lower trendline. This potentially indicated a 澳洲幸运5官方开奖结果体彩网:bear trap, a chart event that lures investors into selling or opening a new 澳洲幸运5官方开奖结果体彩网:short position, before the market rebounds to cause a loss.

Moreover, the September breakdown occurred on the highest weekly volume since February 2009, possibly pointing to 澳洲幸运5官方开奖结果体彩网:capitulation selling෴ before the stoc𓂃k started its recovery this month.

Let’s identify three key overhead chart areas where Humana shares may encounter selling pressure if the stock continues moving higher from current levels, while also discussing a crucial 澳洲幸运5官方开奖结果体彩网:support level that investors will likely be watching.

Key Overhead Price Levels to Watch

Firstly, it’s worth watching how the stock responds to the 澳洲幸运5官方开奖结果体彩网:psychological $300 area, a location on the chart where it may run into resistance near the August 2019 peak and April 2024 trough.

Further buying could see the shares climb to around $370. Investors may look to 澳洲幸运5官方开奖结果体彩网:take profits in this area near the descending channel’s upper trendline and downward sloping 50-week MA, a region that also aligns with a series of lows on the chart꧂ from June 2020 to January 2022.

A longer-term bullish move could lead to a retest of the $450 level, currently just above the 200-week MA, where the shares may face selling pressure near a 澳洲幸运5官方开奖结果体彩网:trendline connᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚecting a range of comparable trading levels on the chart from November 2020 to J꧃anuary this year.

Crucial Support Level to Monitor

If Humana shares lose ground, investors should closely monitor the $230 level,⛎ a general area on the chart that buyers🔥 have defended on three separate occasions between April 2019 and September this year.

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