WR Berkley Corp. (WRB) is among the largest commercial line property/casualty insurers in the US. WRB has been a long-term outperformer versus the S&P 500 Index (^SPX) going back to 2000. Plus, it recently traced out a weekly bullish hammer and has been rallying over the past couple of months, notes John Eade, president of Argus Research.
WRB offers a variety of insurance services, from reinsurance to workers comp third-party administration. It has two segments, Insurance and Reinsurance. Since a 2009 bottom, the shares have been in a bullish channel, often supported by the 21-week exponential and 50-week simple averages.
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WR Berkley Corp. (WRB)
Data by YCharts
The stock retraced 38.2% of its rally since the beginning of the year and fell to its 21-week exponential moving average on July 22. WRB then traced out that weekly bullish hammer. We would put a stop-loss just under chart and moving-average support at $69. We would take profits at $80, with the potential for greater long-term gains.
As for SPX, it just fell to its 21-day exponential average before bouncing. This flattening average recently sat at 6,568. A three-day break should warrant at least some short-term caution and could open the door for a test of support in the 6,150-6,340 zone.
A break of the 21-day exponential (EMA) most likely would coincide with a bearish five- and 13-day EMA crossover. The 21-day EMA often has acted as support for the S&P 500 since April 24. The five-day/13-day EMA crossover saw a minor bearish cross in early August for only a few days since a bullish cross back then.
