Signify Health Stock Forecast: SGFY advances 40% after Amazon joins bid

Signify Health (SGFY), a stock you have probably never heard of, is suddenly the most popular girl at the dance. The home healthcare provider, which is based in Dallas, Texas and has just 2,200 employees, is set to be auctioned off to the highest bidder in early September. 

The Wall Street Journal reported late Sunday that Amazon (AMZN) will now be entering the bid. The e-commerce leader previously tried in vain to operate a joint healthcare venture called Haven with JPMorgan and Berkshire Hathaway but closed it down after three years in early 2021. Amazon joining the other bidders has sent Signify Health stock soaring due to Amazon's deep pockets.

Signify Health shares rose 40.1% to $29.88 in Monday's premarket after closing at $21.20 on Friday.

UnitedHealth Group (UNH), Option Care Health (OPCH) and CVS Health (CVS) are the other known bidders. Signify Health brought in revenue of $773 million in 2021 and profits of just under $20 million. Last Friday, the SGFY market cap was a little over $6 billion.

Signify Health stock forecast

The weekly chart below shows that the SGFY stock has already jumped into its supply zone from March through August of 2021. This region from $28 to $32 has a lot of volume and may force Signify Health shares to stay put. The animal spirits could send the stock back to its all-time high just above $40 a share. Shares faced resistance there in their second and third week after the IPO.

SGFY stock bottomed out near $11 earlier this year, but The Wall Street Journal says that it is expected to garner more than $8 billion at auction.

SGFY weekly chart