Cigna Squeezes After Sharp Rally
Cigna isn’t usually a very interesting stock. However, it jumped last week and some traders may see the potential for more upside.
The first pattern on today’s chart is the bullish gap on December 11 after the health insurer cancelled its planned merger with
HUM Humana. (Management will instead spend $10 billion on stock buybacks.) Share volume hit the highest level in over four years, while its 17 percent gain represented the biggest price surge since February 2009.
Second is the November 24 peak around $290. CI held that level last Friday and Monday. Has old resistance become new support?
Third is the falling trendline since the initial jump. The resulting tight consolidation pattern may create potential for a breakout and continuation of the initial thrust.
Fourth, the longer-term trend may have changed in September when the 50-day simple moving average had a “golden cross” above the 200-day SMA.
Finally, the last quarterly report on November 2 featured better-than-expected results and higher guidance. Now that investors can stop worrying about the merger, will they focus more on CI’s individual fundamentals?
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Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures or cryptocurrencies); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at https://www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on https://www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
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The first pattern on today’s chart is the bullish gap on December 11 after the health insurer cancelled its planned merger with
HUM Humana. (Management will instead spend $10 billion on stock buybacks.) Share volume hit the highest level in over four years, while its 17 percent gain represented the biggest price surge since February 2009.Second is the November 24 peak around $290. CI held that level last Friday and Monday. Has old resistance become new support?
Third is the falling trendline since the initial jump. The resulting tight consolidation pattern may create potential for a breakout and continuation of the initial thrust.
Fourth, the longer-term trend may have changed in September when the 50-day simple moving average had a “golden cross” above the 200-day SMA.
Finally, the last quarterly report on November 2 featured better-than-expected results and higher guidance. Now that investors can stop worrying about the merger, will they focus more on CI’s individual fundamentals?
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures or cryptocurrencies); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at https://www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on https://www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission (“SEC”) and a futures commission merchant licensed with the Commodity Futures Trading Commission (“CFTC”). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association (“NFA”), and a number of exchanges. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services under federal and state money services business/money-transmitter and similar registrations and licenses.
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a member of NFA. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit https://www.TradeStation.com/DisclosureTSCompanies for further important information explaining what this means.
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