Aetna - Will the Rally Continue?   Wednesday, March 3, 2010
By Gibbons Burke
 Shares in Aetna (AET) have rallied in each of the last five trading days, for a five-day gain of 7.1% which ranks as 'very large on our volatility normalized scale. The stock closed with a 'big' one-day gain of 2.3% on Tuesday, the largest of the last five days The chart suggests and indicators confirm the stock has been in an uptrend. The stock is currently above all the moving averages we track except the 50-day.
After five days of decent rallying, it wouldn't surprise if the stock pulled back a bit, but history suggests that this has been a good time to pick up shares of AET relatively cheaply. Q: How has AET performed in the past when it has seen a 'very large' five-day percentage gain in the context of closing above the 200-day average price in the first quarter of the year? A: According to the 10 previous occurrences of this event, EventEdge indicates that AET has shown a very strong bullish edge that peaks 39 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Tuesday, 2 March 2010) is Monday, 26 April 2010. AET rallies in 90% of the cases (9 of 10) by an average of 13.9% relative to the close on the event date. The average of the 1 decline is -0.5%. The overall return of the 10 cases is 12.4%, which, based on the close of AET on the event date ($31.03), provides a target price of $34.88. Click here to see this trading idea in our interactive historical research tool, EventEdge®. Gibbons Burke is editor of MarketHistory.com.
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| | Let variable values:
@ = GII.AET.NYSE
theEvent = IF
5 value percent_move of @ is more than
(30 day average of 5 value percent_move of @ +
(2 * 30 day std_dev of 5 value percent_move of @
)
)
AND
@ is more than 200 value average of @
AND
Date is first quarter
THEN 1
ENDIF
Date Day t-5 t+5 t+10 t+22 t+39
01/09/2002 Wed 9.1 5.4 5.0 -1.1 6.9
02/26/2002 Tue 7.9 1.5 7.6 11.0 24.2
01/23/2003 Thu 5.4 -3.4 -9.0 -5.3 4.9
03/13/2003 Thu 8.1 3.1 8.4 8.3 14.5
01/16/2004 Fri 5.8 0.4 2.1 13.5 23.9
02/17/2004 Tue 10.8 -0.2 2.6 11.1 17.7
02/01/2005 Tue 5.5 -1.6 5.0 17.3 15.2
02/15/2005 Tue 6.7 2.4 9.4 7.4 9.0
01/27/2006 Fri 3.5 6.1 8.3 10.7 8.6
02/16/2007 Fri 7.1 0.5 -4.7 -0.1 -0.5
03/02/2010 Tue 7.1 NaN NaN NaN NaN
Avg 7.0 1.4 3.5 7.3 12.4
AvgPos 7.0 2.8 6.1 11.3 13.9
AvgNeg NaN -1.7 -6.9 -2.2 -0.5
PctPos 100.0 70.0 80.0 70.0 90.0
PctNeg 0.0 30.0 20.0 30.0 10.0
Maximum 10.8 6.1 9.4 17.3 24.2
Minimum 3.5 -3.4 -9.0 -5.3 -0.5
StdDev 2.0 3.0 6.0 7.2 8.1
ZStat 3.5 0.5 0.6 1.0 1.5
Variance 4.0 8.7 36.6 51.6 65.9
11 Occurrences | |
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