Cigna Corporation, a health services organization, provides insurance and related products and services in the United States and internationally. The company’s Commercial segment offers insured and self-insured customers medical, dental, behavioral health, and vision, as well as prescription drug benefit plans, health advocacy programs, and other products and services. Its Government segment offers Medicare Advantage plans to seniors in 16 states and the District of Columbia, Medicare Part D plans in 50 states and the District of Columbia, and Medicaid plans. The company’s Group Disability and Life segment provides group long-term and short-term disability insurance, group life insurance, and accident and specialty insurance. Its Global Supplemental Benefits segment offers supplemental health, life, and accident insurance products, as well as individual Medicare supplement plans that provide retirees with federally standardized Medigap-style plans. The company’s Run-off Reinsurance segment reinsures guaranteed minimum death benefits and guaranteed minimum income benefits plans. Its Other Operations segment provides corporate-owned life insurance that are permanent insurance contracts sold to corporations to offer life coverage; and operates the run-off settlement annuity business.
Take a look at the 1-year chart of Cigna (NYSE: CI) below with my added notations:
Over the past year CI has been trending consistently higher, while also forming a nice trend line of support (blue). Always remember that any (2) points can start a trend line, but itï¿½s the 3rd test and beyond that confirm its relevance. As you can see, the market deems CIï¿½s trendline to be very important. A pullback to that line will provide trading opportunities, one way or another.
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The Tale of the Tape: CI has a trend line support to monitor. A long position could be entered on a pullback to the trendline, with a stop placed below the level of entry. A short position could be entered if CI were to break below its trendline.
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 havenï¿½t 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 youï¿½ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach