4 Trade Ideas for Cigna: Bonus Idea

• Posted by Greg Harmon
• on December 20th, 2021

Here is your Bonus Idea with links to the full Top Ten:

Cigna, $CI, topped in May and then started to move lower. It gapped down under the 200 day SMA in August and moved into consolidation. Other than a gap up at the beginning of November that was immediately sold, it has remained under resistance ever since. It comes into the new week on a 13 day winning streak and at resistance.

The RSI is into the bullish zone with the MACD positive and rising. There is resistance at 220 and 227 then 231 before 240. Support lower comes at 213 and 209.50 then 205 and 200. Short interest is low at 1.5%. The stock pays a dividend with an annual yield of 1.82% and has traded ex-dividend since December 6th. The company is expected to report earnings on February 2, 2022.

The January options chain shows biggest open interest at the 210 put strike and the 220 call strike. February options are just starting to build open interest. The March options have biggest open interest at the 210 put and the 220 call as well.

Cigna, Ticker: $CI

Trade Idea 1: Buy the stock on a move over 221 with a stop at 215.

Trade Idea 2: Buy the stock on a move over 221 and add a January 215/205 Put Spread (3.00) while selling the February 240 Call (3.30).

Trade Idea 3: Buy the January/February 230 Call Calendar (3.50) while selling the January 200 Puts (1.60).

Trade Idea 4: Buy the March 200/220/240 Call Spread Risk Reversal (3.50).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with the December Quadruple Witching in the books, saw equity markets showing some weakness.

Elsewhere look for Gold to continue its consolidation while Crude Oil consolidates as well. The US Dollar Index looks to pause in the uptrend while US Treasuries consolidate. The Shanghai Composite looks to continue in consolidation as well while Emerging Markets continue to move lower.

The Volatility Index looks to remain in the normal range easing the pressure on equity markets. Their charts look vulnerable on the shorter timeframe. On the longer timeframe both the QQQ and SPY look stronger while all three, including the IWM, remain in consolidation. Use this information as you prepare for the coming week and trad’em well. 

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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.

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