Today’s Big Stock: Cigna Corporation (NYSE: CI)

Cigna Corporation is a holding company. Cigna is a global health service company, with insurance subsidiaries that are providers of medical, dental, disability, life and accident insurance and related products and services. In the United States, these products and services are offered through employers and other groups, and in selected international markets, Cigna offers supplemental health, life and accident insurance products and international health care coverage and services to businesses, governmental and non-governmental organizations and individuals. The Company also has certain run-off operations, including a Run-off Reinsurance segment. Cigna operates in five segments: Health Care, Disability and Life, International, Run-off Reinsurance, and Other Operations, including Corporate-owned Life Insurance.

For a potential trading opportunity, please take a look at the 1-year chart of CI (Cigna Corporation) below with my added notations:

 

 

Since August, CI has been moving in a mostly large, sideways move. During that time, the stock has seemed to create a resistance at $47.50 (navy), which was also support back in May of last year. A break above that resistance level should mean higher prices for the stock and a possible challenge of the 52-week high price of $53. If not, the stock could fall back down to the $41 support area (red).

The Tale of the Tape: CI has a strong resistance at $47.50. A long trade should be made if the stock were to break above that level. If you are bearish on the stock or overall market, a short trade could be made if CI approaches 47.50. Stops should be used regardless.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!

Christian Tharp, CMT