The Dow Stock to Short Next Week

Travelers stock is pacing for its steepest monthly point loss in years

Aug 31, 2017 at 12:41 PM
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Insurance stocks have been in focus this week, as speculators consider the impact of Hurricane Harvey. The storm -- downgraded to a tropical depression -- is expected to be the costliest in U.S. history, according to data from AccuWeather. Against this backdrop, blue-chip insurance stock Travelers Companies Inc (NYSE:TRV) is pacing for its sixth loss in seven sessions, and its lowest close in three months. What's more, near-term speculators may want to short TRV, if recent history is any indicator.

TRV Set for Biggest Monthly Point Drop in Years

TRV stock is set to end August with a 5.5% loss -- its steepest percentage loss since October 2016. On a points basis, TRV is tracking for its worst month since January 2014. The security has dropped 7.2% since touching a record high of $130.37 earlier this month, and is set to end beneath its 200-day moving average in back-to-back sessions for the first time since November. At last check, Travelers stock was down 0.7% at $120.97.

travelers stock chart


The Worst Blue Chip to Own Next Week?

TRV's losing streak could continue into next week, too, if past is prologue. According to Schaeffer's Senior Quantitative Analyst Rocky White, Travelers has been among the worst stocks to own during the week of Labor Day, going back 10 years. The blue chip -- the only Dow stock on the list -- has averaged a loss of 1.1% during the holiday week, and was higher just 30% of the time.

Recent options traders have been upping the bearish ante on Travelers stock, too.  At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock has racked up a 10-day put/call volume ratio of 2.77. Not only does this ratio indicate buyers have picked up nearly three TRV puts for every call, it also stands higher than 79% of all other readings from the past year, underscoring the healthier-than-usual appetite for bearish bets of late.

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