EarningsBeats.com Digest for March 2, 2022
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Insurance Stocks Still Seem To Be Trending Higher
The key areas in the insurance space - reinsurance ($DJUSIU), life insurance ($DJUSIL), full line insurance ($DJUSIF), property & casualty insurance ($DJUSIP), and insurance brokers ($DJUSIB) - all seem to be doing fine to me, despite the recent overall market turmoil. The DJUSIL has taken the largest recent tumble as falling treasury yields can
be a burden for this group and the 10-year treasury yield ($TNX) has fallen nearly 30 basis points just since Friday. The DJUSIL fell nearly 5% on Tuesday alone. While this type of drop can be scary, it likely is setting up the group for a nice rebound within its current uptrend. Check out this 2-year weekly chart:
There's no doubt that the DJUSIL has been weak of late, but over the past year, weekly RSI trips down to 50 or into the 40s has resulted in a short-term bottom. Currently, the weekly RSI is at 47, so the group is definitely worth a second look. Once I find a group that I like, I head over to our flagship Strong Earnings ChartList (SECL) to identify stocks on this ChartList that match the industry group - in this case life insurance ($DJUSIL).
The highest-rated life insurance company on there based on SCTR score (SCTR = StockCharts Technical Rank) is Metlife (MET), which has dropped roughly 10% in less than two weeks and has a daily RSI just beneath 40. 40 is generally a nice RSI level for a rebound. MET is currently trading at a level where buyers have stepped in in the past. I'd expect the 62-64 support area to hold. That's where we reversed in January.
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Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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