The price chart and technical indicators for CIGNA (CI) have been deteriorating and could soon take a turn for the worse.
In this chart of CI, above, we can see a possible "blow off" or "climax peak" in June. Prices shot up $30 in a short span of time while volume also spiked. After this run-up, prices of CI have been grinding lower with a loss of $40. The 50-day and 200-day moving averages are flat and the 50-day could soon cross below the longer 200-day average, generating a sell signal. The On-Balance-Volume (OBV) line peaked with prices in late June. The Moving Average Convergence Divergence (MACD) oscillator has been below the zero line since early August.
This longer look at CI reinforces our negative view. Notice the volume spike as prices accelerated to a peak. The OBV line is flat while the MACD oscillator is in a tailspin. Prices look poised to break down, but we are not sure what price point will be the trigger; a close below $128, $127 or $125? If long, we suggest you closely monitor your position.
Editors' note: To better serve Real Money readers and present our content in the best possible way, we've revised the format for Bruce Kamich's chart analysis. Bruce will continue to analyze multiple names and sectors throughout the trading day, but we will bundle these into fewer stories that are updated regularly in one story. So please look out for the latest from Bruce to see what's new and catch up on what you've missed. And we welcome reader input, so feel free to add your thoughts in the comments section.
Nov. 11, 2015 | 2:45 PM EST
CVS Health Could Use a Shot in the Arm
- The next major support area on this chart is around $80.
The charts of CVS Health (CVS) are not looking healthy and a second opinion may only confirm our bearish view.
This chart of CVS, above, looks like a non-textbook top formation -- a complex head and shoulder top formation with a downward sloping neckline. The volume doesn't decline through the pattern, but the On-Balance-Volume line does peak at the end of July. We can also see the 50-day moving average go below the 200-day average, giving us what is called a dead cross.
This weekly chart shows a bearish crossover of the 10-week and 40-week moving averages with the Moving Average Convergence/Divergence oscillator (MACD) crossing below the zero line. Below current levels, the next major support area on this chart is around $80.
Nov. 11, 2015 | 1:53 PM EST
Don't Expect CF Industries to Be Fertilized Anywhere Above $40
- Right now there are no bullish divergences that might foreshadow a rally in CF.
CF Industries (CF) peaked in July and turned lower. Prices could bounce in the short-run, but the charts and indicators are still pointed downward.
While CF has not been in a downtrend for a long time, it is telling that it is close to its lows when the major averages are near their highs for the year (see the chart above). When the stock market took off in early October, CF could only rally to the underside of its declining 50-day moving average and stopped short of resistance beginning around $55. Right now there are no bullish divergences that might foreshadow a rally in CF.
This longer-term chart of CF, above, shows that the 40-week moving average is starting to point lower and there is no bullish divergence between price and momentum on this time frame. CF could gradually move to the next round number of $40.