CIGNA
(CI) opened at $38.24. So far today the stock has hit a low of $37.1 and a high of $38.3. CI is now trading at $37.36, down 2.34 (-5.89%). After hitting a one-year high of $56.98 in January, the stock hit a one-year low of $36.75 in March. CI shares are falling this morning after competitor Coventry Health Care
(CVH) lowered its fiscal 2008 earnings forecast to a range between $3.65 and $3.75 for the year, well below the $4.43 per share expected by analysts. Aetna
(AET) also reaffirmed its quarterly profit guidance at 93 cents per share, below analysts' estimates of 94 cents per share. This could be bad news for CI. Technical indicators for CI were neutral and improving until today's drop, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating. If you’re looking for a hedged play on this stock, consider an October bear-call credit spread above the $45 range. CI hasn’t been above $45 since February and has shown resistance around $42 recently. This trade could be risky if the legislation that hurts health insurance companies fails to make it through the government, but even if that happens, this position could be protected by resistance CI might find at its 50 day moving average, which is currently around $42 and falling. [LHF- Seven Summits Strategic Investments NewsBite]