A Different Type of Insurance for Your Portfolio
- Posted by Greg Harmon
- on June 28th, 2016
Mayhem has been everywhere in the market with the Brexit vote. Or so we are told. Yes, many markets around the world took a header on the news. And some are now recovering. What is one to do in this environment? Check on your insurance.
If you had portfolio insurance in place then you have likely been sleeping well despite the strong moves lower. If you did not it is not too late to buy insurance for your portfolio. Not your typical portfolio insurance, buying put options. But buying this insurance company stock.
Allstate ($ALL) moved off of a low made in January and ran up to $68 before finding resistance in April. Since then it has been consolidating in an ascending triangle pattern. With the Brexit pullback it dropped 3.75% but recovered over a 1/3 of that before the day was over. 3 days later it is right back at the high.
The momentum indicators are looking good too. The RSI is running back higher after making a higher low, and the MACD is crossing up and about to go positive. Continued recovery in the broad market could see this move over that resistance at 68. This would give a target to 72 on the break of the triangle. Now that is one way to use insurance against mayhem.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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