Schaeffer's Trading Floor Blog

Highs & Lows: Visa, CIGNA, Motorola Solutions, and UBS

V, CI, MSI, and UBS shot higher on the charts

by 11/1/2012 5:07 PM
Stocks quoted in this article:

It only took two sessions for U.S. equities to turn higher post-Sandy, as Wall Street found its bearings, and investors appeared hopeful about the global economic picture. By the close, major market indexes were noticeably higher on the day. Echoing this optimistic sentiment, the overall number of stocks notching new annual highs easily outweighed those dropping to new bottoms. There were 192 new peaks and 24 lows on the NYSE today, while the Nasdaq tallied 85 new highs and 42 lows. Among the names charting notable moves were Visa Inc (NYSE:V - 143.88), CIGNA Corporation (NYSE:CI - 53.27), Motorola Solutions Inc (NYSE:MSI - 53.32), and UBS AG (USA) (NYSE:UBS - 15.56).

  • Uptrending credit service name V was greeted with a plethora of upbeat price-target changes this morning, following its solid fiscal fourth-quarter report. With this news, V jumped to an all-time best of $144.36, amplifying its considerable 41.7% year-to-date gain. And there could higher highs around the corner, as the average 12-month price target sits at $143.17, which is a discount to V's record peak.

  • Next up … CI also enjoyed an earnings-induced bounce today -- climbing to a multi-year acme of $53.31 -- as the insurance issue posted better-than-expected third-quarter earnings, and raised its full-year profit forecast. Ahead of CI's turn in the earnings spotlight, optimism revved up in the options pits, as evidenced by the 50-day call/put volume ratio of 14.81 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio is in the 98th percentile of its annual range, signaling that speculators on these exchanges have rarely made more bullish bets over bearish during the past couple of months. But this recent trend toward calls may not be as upbeat as it would initially appear. Short interest on the equity increased 9.6% during the most recent reporting period. Consequently, it's possible that a portion of the recent call volume was the result of hedging activity by the shorts.

  • Perhaps catching a lift from today's broad-market upswing, MSI rallied to the $53.93 mark -- its loftiest price since Jan. 2008. Despite the shares' healthy 15% return for the year, the brokerage bunch remains mostly skeptical, which could translate into a contrarian tailwind for the telecom concern. Eight of the 14 analysts following MSI consider it a "hold" or worse, while its consensus 12-month price target of $54.06 represents a slight premium to today's new high.

  • Two days after announcing plans to cut 15% of its staff by 2015, UBS notched a second straight session at an annual high – this time touching the $15.57 level. Technically speaking, the equity has performed quite well, charging 31,5% higher in 2012, and outpacing the broader S&P 500 Index (SPX) by 36 percentage points throughout the past three months. As a result, the security's Relative Strength Index (RSI) is now at 75 -- teetering into overbought territory -- which suggests the shares could take a bit of a breather in the near term.

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