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Dave & Donald Moenning

Mr. David Moenning is a full-time professional money manager and is the President and Chief Investment Officer for his Chicago-based Registered Investment Advisory firm, Heritage Capital Management (...

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Product Performance

Long Trade Idea of the Day: Primerica


Financials have been tough to justify buying lately, as it seems like a lot of space (or at least the Financials that aren't REITs) is approaching or making new weekly highs. Primerica (NYSE: PRI) popped up on the radar this week as it shares this considerable technical strength while presenting a favorable entry opportunity for a short-term trade.

Primerica has been trending higher since June of 2012, only pausing for meaningful pull-backs just a handful of times during this bull run. More recently, Primerica hit new all-time highs just below $44 at the end of October before pulling back and basing nicely at $42. The stock held $42 on a closing basis four times in just ten sessions while forming a clear basing pattern, making $42 the line-in-the-sand support and the bottom of a developing trading range.

Primerica also had a decent Q3 earnings announcement on November 6th, beating EPS and Revenue expectations, though the announcement was a non-event as far as price action is concerned. Still, it's nice to know that A) Primerica's earnings were not weak (weak announcements tend to lag on price action), and B) The company doesn't report again until February 11th, which makes for a nice window to play the trade before the next foreseeable volatile move.

Primerica has clear upside to its all-time highs at $44, and battle-tested support at $42. Current prices are more towards the support-side, so the potential upside easily outweighs the risk (+3.65 percent vs. -0.96 percent). This trade is definitely on the more conservative side, but with the market stumbling near all-time highs and the short-term direction uncertain as each day passes, it makes sense to play it a bit safer here.

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When to Consider Entering the Trade:

At the current price (~$42.40).

When to Consider Exiting the Trade:
At a close below $41.99 (Breakdown) / An intraday price of $43.95 or above (Profit-Taking)

Disclosure: At the time of publication the editor and affiliated companies own the following positions: PRI

Note: Positions may be bought or sold while this publication is in circulation without notice.

Primerica Inc - Last 30 Days
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Primerica Inc - Last 3 Months
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Primerica Inc - Last 6 Months
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Posted in: Education Long Ideas Trading Ideas General