Chubb Ltd. (CB) has been under downward price pressure for some months, but it looks like it's establishing a new uptrend. Let's check out the charts and indicators and come up with a strategy that balances risk and reward.
In this updated daily bar chart of CB, below, we can see an interesting low in late June. Prices have rallied from June to break the downtrend from early February. CB has rallied this month above the 50-day moving average line, and now that line is turning positive. CB is just below the declining 200-day line, and with a rising On-Balance-Volume (OBV) line I would expect the average line to be broken. The OBV line is very interesting as CB declined from above $155 to below $125 the OBV line was rock steady. A steady OBV line in a declining market tells me that owners of CB have largely held their positions and did not liquidate. In the bottom panel is the Moving Average Convergence Divergence (MACD) oscillator which gave an outright go-long signal earlier this month.
In this weekly bar chart of CB, below, we can see that prices were in a long and durable uptrend until this year. Prices have rallied back to the underside of the declining 40-week moving average line. The weekly OBV shows a rise over the past few weeks, and the MACD oscillator has crossed to the upside for a weekly cover shorts buy signal. In
the Point and Figure CB chart below, we can see that the downtrend has been broken. That indicates a $168.53 upside price target.
Bottom line: I am impressed with what I see on the charts for CB. Traders should look to go long CB at current levels and if there is a pullback towards $135. Risk a close below $129 and look for gains to $155 and then the upper $160's.