For his final "Executive Decision" segment of Mad Money Monday evening, Jim Cramer checked in with Chris Swift, chairman and CEO of Hartford Financial Services Group (HIG) , the insurer that rejected multiple takeover offers from rival Chubb (CB) .
Swift said Hartford rejected multiple offers because it had confidence in the business and in its plans for the future. He added that Hartford is in the sweet spot of small commercial insurance, where the growth will be among the biggest.
Hartford is investing into its business while also cutting costs and rewarding shareholders.
Let's pull off from Route 90 and check on the charts.
In this daily bar chart of HIG, below, we can see that prices moved sideways from May to November but then began a markup phase to the end of February. In March the price of HIG rocketed higher. We can see a bullish golden cross of the 50-day and 200-day moving averages at the very beginning of December.
The On-Balance-Volume (OBV) line has been improving from September/October and supports the price advance this year. The trend-following Moving Average Convergence Divergence (MACD) oscillator turned bullish in November and is poised to move higher towards a fresh buy signal.
In this weekly bar chart of HIG, below, we went back 10 years to get some perspective. Prices have oscillated sideways the past six years and have broken out on the upside of a $35 to $60 trading range. The 40-week moving average line is positive.
The weekly OBV line shows a multi-year rise. The MACD oscillator has been bullish from the beginning of the year.
In this daily Point and Figure chart of HIG, below, we can see a possible upside price target of $76. Not far away.
In this weekly Point and Figure chart of HIG, below, we used close only price data and a five-box reversal filter. Here the chart shows us a price target of $93.
Bottom line strategy: I have no special knowledge of what is going on in the boardrooms of Hartford Financial or Chubb. Can or will Chubb raise their bid? No clue but the charts of HIG are positive and poised for further gains. Traders who are comfortable with trading a stock that could be in play could go long HIG at current levels. Risk to $62. Our price target is the $85-$93 area.
