Bullish Trendline Could Support Cigna Stock After Earnings

CI is already sporting a 22.5% nine-month lead

Digital Content Manager
Jan 31, 2024 at 2:56 PM
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Cigna Group (NYSE:CI) will report fourth-quarter earnings before the open on Friday, Jan. 2. The security was last seen up 0.9% to trade at $301.56 and is now pacing for its third-straight daily win, while sporting a 22.5% nine-month lead. In addition, a historically bullish trendline that could prop CI even higher, should this upcoming report go well.

 

CI 80 Day

Per data from Schaeffer's Senior Quantitative Analyst Rocky White, CI is within one standard deviation of its 80-day trendline. The stock saw eight similar signals over the last three years, defined for this study as having traded north of this trendline 80% of the time during the last two months, and in eight of the past 10 trading days.
 
Cigna Group stock moved higher one month later in 88% of those instances, with an average 6.4% gain. A move of similar magnitude from its current perch would place the shares back above $320.
 
If past is precedent, there is reason to believe Friday's report will go well. The security finished five of the past eight next-day sessions higher, including a 7% gain in May. CI averaged a move of 4% over the past two years, regardless of direction, and the options pits are pricing in a larger-than-usual swing of 5.5% this time.
 
An unwinding of pessimism could also generate tailwinds. That is because the equity's 10-day put/call volume ratio of 1.54 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than all but 5% of readings from the past year.
 

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