If history is any guide, there may be trouble ahead for the actions of Cincinnati Financial (NASDAQ: CINF). A so-called “death cross” has formed on its chart and, unsurprisingly, this could be bearish for the stock.
What there is to know: Many traders use moving average crossover systems to make their decisions.
When a short-term average price rises above a longer-term average price, it can mean that the stock is trending higher. If the short-term average price crosses below the long-term average price, it means the trend is down.
Why it matters: 50 and 200 day simple moving averages are commonly used.
The death cross occurs when the 50 days pass below the 200 days. This could mean that the long-term trend is changing.
This just happened with Cincinnati Financial, which is trading around $119.54 at press time.
Remember: Seasoned investors don’t trade death crosses blindly.
Instead, they use it as a signal to start looking for short positions based on other factors, such as price levels and company fundamentals and events.
For seasoned investors, this is just a sign that it may be time to start considering possible short positions.
With that in mind, take a look at Cincinnati Financial’s past and future earnings forecasts:
| Trimester | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 |
|---|---|---|---|---|
| EPS estimate | 0.87 | 0.94 | 1.05 | 1.19 |
| Actual EPS | 1.28 | 1.79 | 1.37 | 1.61 |
| Revenue estimate | 1.76B | 1.73B | 1.68B | 1.66B |
| Actual turnover | 1.78B | 2.29B | 1.54B | 2.69B |
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This article was generated by Benzinga’s automated content engine and reviewed by an editor.
