ALHC Stock Surges 400%-Here's Why the Bulls Aren't Done

Alignment Healthcare Inc. (NASDAQ: ALHC) is an example of why even buy-and-hold investors need to leave room for nimble movement. ALHC stock is up more than 58% in the last 12 months and more than 415% since April 2024.

In April, the stock could have been classified as a penny stock, trading at around $4.50 per share.

Many investors may have anticipated the move because Alignment Healthcare operates in Medicare Advantage, where it focuses on value-based care. The company’s integrated care model combines in-home clinical services, telehealth capabilities, and digital health tools.

Over the past two years, health insurance stocks—particularly those tied to Medicare Advantage—have posted strong gains, benefiting from scale, pricing power, and a growing senior population.

The Broader Healthcare Trend Is Turning

According to "The Wall Street Journal," hospital stocks, which have been beaten down, are expected to rally. Cost inflation is easing, staffing conditions are improving, and reimbursement rates are beginning to stabilize. As these headwinds begin to let up, investor sentiment toward the broader healthcare services ecosystem is likely to improve, including companies tied to Medicare utilization and senior care.

That’s why investors can still be bullish on ALHC stock. The company’s 18-month rally marks a fundamental reset in how investors view the company’s business model.

There was a difficult stretch for Medicare Advantage insurers in 2023 and early 2024, driven by higher medical costs and reimbursement uncertainty. However, Alignment began demonstrating tangible progress in controlling expenses—medical cost trends improved, risk adjustment capture strengthened, and management shifted toward more disciplined growth.

That efficiency seems to have convinced investors that Alignment’s value-based care strategy can scale profitably. Just as important, that time period offered investors leveraged exposure to a potential Medicare rebound, when much of the bad news was already priced in.

As fears around margin compression have faded, the stock has benefited from both a fundamental re-rating and technical tailwinds, including short covering and renewed interest in mid-cap healthcare names. If hospital economics and Medicare utilization continue to normalize as expected in 2026, Alignment’s integrated care model and its positioning in the mid-cap sector could make the company a beneficiary of improving industry conditions.

ALHC Stock Looks Overbought, But the Uptrend Is Intact

For all the reasons investors might buy ALHC stock, now might not present the best opportunity. ALHC is technically extended, with the stock price pushing to new 52‑week highs and trading well above key moving averages, which signals a strong but stretched uptrend.

The daily RSI in the low‑70s and a strongly positive MACD reflect overbought momentum rather than a low‑risk entry, so chasing at current levels offers poor risk‑reward even though the trend remains bullish. 

A better approach for investors who have been on the sidelines is to stay constructive on the name but wait for a pullback into support. The first buy zone is around $21.50 to $22. This has been an area of recent consolidation just below the highs, where an initial bounce would favor aggressive entries.

A more conservative, higher‑probability zone is in the area of $20.25–$20.75 near the rising 50‑day moving average and prior base. If the stock can hold around these levels, it would confirm trend integrity. Traders could scale in around the upper zone and add closer to the 50‑day, then use a stop just below the 20-day SMA to define risk while targeting a retest and modest extension of the highs in the $24–$25 region, as long as pullbacks remain orderly and support holds.

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The article "ALHC Stock Surges 400%—Here’s Why the Bulls Aren’t Done" first appeared on MarketBeat.