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The Inner Circle, Issue #404 - Insurance Company Bailouts Coming?
January 05, 2014
Hi <>,

Insurance Company Bailouts Coming?

Insurance Company Bailouts Coming? What politician gets elected running on that? Will insurance companies bail on Obamacare?

Argument for Intel (INTC):

Anytime a quality company becomes available at depressed prices, (IMO) it should be bought.

MarketClub's Trade Triangle Technology algorithms now rank INTC primary trend 'up'.

INTC is now the 4th of 10 highest dividend yielding stocks in the 'Dow Dogs' (3.49%).

INTC is now the 2nd of 5 lowest priced stocks among the 'Dow Small Dogs' (Moving up).

12/31: During the opening range, an opportunity presented itself to roll-up 'protective' puts at advantageous prices thereby locking in gains without sacrificing further upside potential (beats the hell out of using 'stops'). Did you take advantage?

Earnings are rising.

Week ending 1/3 INTC closed 25.78 (above the 50 SMA on the daily chart - Favorable).

Stocks rise until they meet resistance then reverse until they find support.

Key primary trend algo to watch: 10/9 low 22.48 (lowest low - last 3 mo).

Recent potential resistance pivot point: 12/31 26.04 (highest high - last 3 wk).

Recent support pivot point: 12/13 24.16 (lowest low - last 3 wk).

Critical: 11/19 50 SMA crossed above 200 SMA on weekly chart = 'Golden Cross' (favorable).

Earnings: 5 yr avg EPS: 1.74. TTM EPS: 1.85. Current P/E: 13.94. Forward P/E: 13.62.

Est Avg Yr EPS: 1.89. Est Yr High EPS: 2.01. Est Yr Low EPS: 1.80 (per analysts).

Next earnings date: 1/16.

The combination of low price/high yield + support at the 50 & 200 SMA = opportunity (IMO).

Whether you buy stock, protect with puts (& collect dividends) or buy calls (whatever suits your style), a limited risk/high reward position can be constructed. Each strategy has its own follow-up tactics, depending on how it plays out.

UnitedHealth Group (UNH) Warning: Political Risk? (Obamacare).

Week ending 1/3 UNH closed 75.10.

UNH currently above its 50 & 200 SMA on both daily & weekly charts (favorable).

MarketClub's monthly 'Trade Triangles' ranks UNH up in both primary (monthly) and weekly trends (favorable). So what's the problem?

Critical: Are we witnessing distribution (informed selling) taking place on the way up? Applicable to the entire health insurance industry?

Week ending 9/20, 'Bearish Engulfing + 6' candlestick formation (weekly chart) indicates serious liquidation took place.

Reportedly health insurers received bad data from federal government causing heavy sell off.

Recent potential resistance pivot: 1/3 high 75.76. Currently testing 9/16 high 75.88.

Recent support algo to watch: 12/17 low 70.20 (lowest low - last 3 wk).

Key primary trend support algo to watch: 10/28 low 66.72 (lowest low - last 3 mo).

Earnings are rising (favorable).

Earnings: 5 yr avg EPS: 4.41. TTM EPS: 5.29. Current P/E: 14.20. Forward P/E: 13.58.

Est Avg Yr EPS: 5.49. Est Yr High EPS: 5.57. Est Yr Low EPS: 5.45 (per analysts).

Next earnings date: 1/16.

Cisco Systems (CSCO):

Week ending 1/3 CSCO closed 21.98 (Yield: 3.09%).

CSCO is currently 9th of 10 highest yielding 'Dow Dogs'.

CSCO is currently 1st of 5 lowest priced among the 'Dow Small Dogs'.

Key primary resistance algo to watch: 11/13 high 24.00 (highest high - last 3 mo).

Key primary support algo to watch: 12/13 low 20.22 (lowest low - last 3 mo. Also corresponds with the lowest low - last 3 wks).

Double bottom formed between 4/19 low 19.98 & 12/13 low 20.22 (key primary support algo).

Critical: Break this and computer screens light up all over the world. Technically, CSCO would be in deep shit.

CSCO currently above the 50 SMA & below the 200 SMA on daily chart (mixed). Weekly chart: Just the opposite, below the 50 SMA & above the 200 SMA (mixed).

Possible resistance: 12/31 high 22.47.

Earnings are rising, so far, (management lowered forward sales projections).

Earnings: 5 yr avg EPS: 1.37. TTM EPS: 1.84. Current P/E: 11.95. Forward P/E: 11.13.

Est Avg Yr EPS: 1.98. Est Yr High EPS: 2.03. Est Yr Low EPS: 1.86 (per analysts).

Next earnings date: 2/12/14.

Comments? Ideas? Feedback? Let me have it, right between the eyes! I'd love to hear from you. Just reply to this zine and tell me what you think!
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