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2 Healthcare Stocks in Focus After Merger Talks Break Down

Cigna stock is on the rise, while Humana stock slips

Deputy Editor
Nov 11, 2024 at 10:55 AM
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Shares of Humana Inc (NYSE:HUM) are down 3.7% at $277.38 at last glance, after Cigna Group (NYSE:CI) said it was not pursuing a merger with the smaller health insurance name, and will instead prioritize share buybacks. Cigna stock is on the rise after the news, last seen up 6.7% to trade at $341.04. 

A Very Ho-Hum Year for Humana

Since the start of the year, Humana stock is underperforming with a 39.4% deficit. The $300 level, which provided support March-April, appears to be moving in as an area of pressure, as well as the 50-day moving average overhead, which capped rallies back in August.

Put traders have been turning their attention to HUM lately and are likely cheering today's downturn. The stock's 10-day put/call volume ratio of 1.41 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than all other readings from the past year. 

Cigna Eyes Best Day of 2024

Cigna stock now sports a 13.6% year-to-date lead. The shares are on track for their best single-session gain of the year, and have nearly filled their Oct. 18 bear gap stemming from news that the merger talks were resumed.

Options bulls are targeting CI today, as the stock has seen four times the call volume typically seen at this point. The January 2025 350-strike call is the most popular, followed by the November 350 call. Traders were optimistic coming into today, too, per the equity's 10-day call/put volume ratio of 3.39 at the ISE, CBOE, and PHLX, which ranks higher than 90% of readings from the past 12 months. 

 

 

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