After being hammered lower at the opening of trade at $44.00, shares of employee benefits service provider Cigna (NYSE:CI) $36.81 -42% were halted for trading at 12:43 PM EST for news pending. Within the last 30-minutes, the company said that it now expects 2003 operating income to be in the range of $875-$925 million, or $6.25-$6.50 per share, which is below analyst's full- year consensus of $8.84. Earlier this morning, the company had warned on current quarter (Q3) earnings and full-year 2002 earnings.
Today's lower price action in shares of Cigna (CI) have the HMO Index (HMO.X) 564.27 -2.07% lower as Cigna is a component of this sector. In the last 5-minutes, chares of Cigna were released for trading and resumed at $38.30.
Wellpoint Health Network (WLP) - $1 box
I've had my eye on some of the HMO stocks in recent sessions, but many were "overextended" on their point and figure charts and risk/reward profiles were unattractive for bullish trades. However, the recent little pullback in WLP from $89, now offers bulls a much better entry level as the stock pulls right back to where it gave a spread-triple-top buy signal at $78.
One way to look to trade WLP is to wait until tomorrow, and see if the stock doesn't reverse UP 3-boxes with a trade at $81. While the stock currently has rebounded a bit from this morning's lows of $77.67 and trades $81.50, a bull can enter with a tight stop just below today's low, or give some room if only taking 1/2 positions to the bullish support trend of $71. Longer-term target would be the bullish vertical count of $100, which currently has risk to the sell signal versus target of $100 at risking $10 to potentially make $19. As such, a longer-term bull would prefer to only establish 1/2 position currently.
Current broader market action is slightly positive with the Dow Industrials (INDU) 8,327 +0.12%, S&P 500 (SPX.X) 886 +0.45%, S&P 100 (OEX.X) 449 +0.43%, NASDAQ Composite (COMPX) 1,314 +1.17%, NASDAQ-100 (NDX.X) 979 +1.52% and Russell 2000 (RUT.X) 367 +0.52% holding gains.
Sector action is mixed with the Semiconductor Index (SOX.X) 286 +2.71%, Disk Drive Index (DDX.X) 62.94 +2.1% and Broker/Dealer Index (XBD.X) 409 +2% leading gains.
The Oil Service Index (OSX.X) 79.06 -4.7% leads sector declines with the HMO Index (HMO.X) 563 -2.21% and Dow Jones Home Construction Index ($DJUSHB) 310.88 -2.03% taking the number two and three sector loser spots today.
Today's volume is light at both the NYSE with volume running below 1 billion shares. Volume at the NYSE is 813 million, while NASDAQ volume is 907 million at this hour.
Breadth is equally positive at both the NYSE and NASDAQ at 17 to 13, with advancers having the upper hand.
There have been 10 stocks trade new highs versus 40 stocks trade new lows on the NYSE, while NASDAQ shows 14 stocks having traded a new 52-week high versus 46 stocks trade new lows.