Validus Holdings, Ltd. (VR) – insurer under pressure

ISIN: BMG9319H1025

Validus Holdings, Ltd. is a globally operating insurance company with its headquarters in Bermuda, which offers a wide product range in the insurance and reinsurance sectors. The company was founded in 2005 and is listed on the NYSE under the abbreviation VR. In this technical analysis, we will expand on a possible short scenario.

 

Stock VR daily chart with targets

Stock VR daily chart with targets

 

Downward trend with rising volume

In the daily chart, a clear trend reversal can be seen. The all-time high from February was not upheld, and a downward trend formed that broke through the SMA200. The last two movements took place under rising volume, and the value is now in a correction that, at the current moment in time, is still quite strong. The daily chart reveals several targets that can serve as partial sale zones.

 

VR hourly chart with outlook

VR hourly chart with outlook

 

Wait for a weakening of the correction

The current correction is still too strong for an entry; we should wait for the prices to weaken. A further progressing correction, therefore, is favorable for us – this means we can find a more attractive entry, and the targets become more attractive.

In the subordinate trend, as is drawn in, we should wait for a reversal of the trend. The stop placement occurs after an entry according to trend trading at the last high of the signal trend. Alternatively, one can enter into a “fuzzy” trade if there is a wide, sweeping correction: the entry takes place as a whole near the high of the superior trend with a stop just above (blue line). This entry, however, is riskier and requires precise risk and money management. With fuzzy trading, a reduction of the position size should be carried out.

Before making an entry, one should take company news into account. In addition, one should observe the overall market as well as the actions of the central banks.

 

Possible trading parameters

Entry: depending on the formation of the hourly trend, between 52.40-53.40 USD

Stop: depending on the formation of the hourly trend, at the last high

Target: targets at 51.40 USD, 49.50 USD and 46 USD

Neither the author nor our company is invested in the securities and underlyings discussed at the time of publishing this analysis.

Disclaimer:

Exchange transactions are associated with significant risks. Those who trade on the financial and commodity markets must familiarize themselves with these risks. Possible analyses, techniques and methods presented here are not an invitation to trade on the financial and commodity markets. They serve only for illustration, further education, and information purposes, and do not constitute investment advice or personal recommendations in any way. They are intended only to facilitate the customer’s investment decision, and do not replace the advice of an investor or specific investment advice. The customer trades completely at his or her own risk.

Validus Holdings, Ltd. (VR) – insurer under pressure
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