Conclusion, Investment Implications, Strategy

Manulife Financial Corporation (MFC) is rebounding from a test of major underlying support at its 200-day moving average while also testing and potentially resuming its January 5th trend of Strategic relative outperformance versus the benchmarket S&P 500.  A sustained rise above the $19.14 area would target an additional 13% rise to $22.70.  This is an Asbury Momentum trade idea.

Analysis and Rationale

Manulife Financial Corporation (MFC), together with its subsidiaries, provides financial products and services in Asia, Canada, the United States, and internationally. The company operates through Wealth and Asset Management Businesses; Insurance and Annuity Products; And Corporate and Other segments. The Wealth and Asset Management Businesses segment provides mutual funds and exchange-traded funds, group retirement and savings products, and institutional asset management services through agents and brokers affiliated with the company, securities brokerage firms, and financial advisors pension plan consultants and banks. The Insurance and Annuity Products segment offers deposit and credit products; individual life, and individual and group long-term care insurance; and guaranteed and partially guaranteed annuity products through insurance agents, brokers, banks, financial planners, and direct marketing. The Corporate and Other segment is involved in property and casualty insurance and reinsurance businesses; and run-off reinsurance operations, including variable annuities, and accident and health. Manulife Financial Corporation was incorporated in 1887 and is headquartered in Toronto, Canada.

The upper panel of Chart 1 below plots MFC daily since September 2021 along with its 200-day moving average, a widely-watched major trend proxy currently at $19.72 which the stock is currently testing as major underlying support.  The lower panel plots the daily relative performance of MFC versus the SPDR S&P 500 ETF  (SPY) with its 63-day (quarterly) moving average, which is our Strategic time frame.  The green highlights show that MFC is currently rebounding from a test of major support at its 200-day MA while also testing — and potentially resuming — its Jan 5th trend of Strategic relative outperformance versus SPY.

These conditions collectively suggest a low-risk buying opportunity.

Chart 1

Table 1 below shows that, considering a $22.70 upside target and a protective stop placed below the $19.14 area, a long entry price of $20.02 would provide a 1:3.0 risk/reward ratio (risking $1.00 to make $3.00) with an initial risk of 4.4%.

Table 1

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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.