Arch Capital Group Ltd., through its subsidiaries, provides insurance
and reinsurance solutions worldwide. It operates in two segments,
Insurance and Reinsurance. The Insurance segment offers primary and
excess casualty insurance coverage, including railroad and middle market
energy business, as well as to middle and large accounts in the
construction industry; directors and officers' liability insurance;
medical professional and general liability insurance; collateral
protection, debt cancellation, and service contract reimbursement
products; loss sensitive primary casualty insurance programs;
professional liability; general liability, commercial automobile, inland
marine, and property insurance to program managers; property, energy,
marine, and aviation; surety; and travel and accident insurance
products. This segment markets its products through a group of licensed
independent retail and wholesale brokers. The Reinsurance segment
reinsures third party liability and workers compensation exposures;
individual property risks of a ceding company; and catastrophic perils
on a treaty basis.
To review a current H&S pattern on Arch's stock, please take a
look at the 1-year chart of ACGL (Arch Capital Group, Ltd.) below with
my added notations:
ACGL had been on a steady, yearlong rally until peaking in May. Over
the last (3) months the stock had created a very important level at $51
(red), which was also the “neckline” support for the H&S pattern.
Above the neckline you will notice the H&S pattern itself (navy).
Confirmation of the H&S occurred when ACGL broke its $51 “neckline”
support. So, the stock should be moving lower overall from here.
Keep in mind that simple is usually better. Had I never pointed out
this H&S pattern, one would still think this stock is moving lower
simply if it broke below the $51 support level. In short, whether you
noticed the pattern or not, the trade would still be the same: On the
break below the key $51 level.
The Tale of the Tape: After embarking on a nice
uptrend, ACGL confirmed a head & shoulders pattern. A short trade
could be placed now, or could be entered on any rallies up to or near
the $51 area.
Please share this article
No comments:
Post a Comment