|PLAY > New Plays
|| Monday, April 02, 2001
New Split Plays
|MBI - MBIA Incorporated $81.70 +1.02 (+1.02)
As traders continue to dodge bullets in the slow grinding
technology sector, opportunities appear to be rising elsewhere.
One such opportunity is MBIA Incorporated (MBI), which offers
insurance for new issues of municipal bonds, including bonds held
in unit investment trusts and mutual funds. Growth prospects for
the company are inherently tied to interest rates, which currently
make the stock timely because of the recent rate reductions by the
Federal Reserve. What's more compelling to us though is the fact
that the company announced a 3:2 stock split back on 3/15/01,
which will be payable to shareholders of record on 4/20/01. We're
anticipating a possible split run into the payable date. Looking
at the chart, MBIA shares, after falling from an intraday high of
$83.80, managed to hold above the previous high of $81.10. Today's
advance came on volume of 1,121,900 shares, nearly 100 percent
above its three-month ADV. This is an excellent indication that
momentum players added positions on the breakout. The short-term
technical readings also points to higher levels, with a bullish
crossover in the MACD and the OBV planted firmly near year highs.
As far as entries in MBI are concerned, a move above
today's high of $83.80 could prove to be an excellent entry point.
A bounce off support offered by the 3/08/01 high of $81.10 may
also prove to be a good entry level. We'll set stops near the 40-
dma at $76.50 to limit our downside risk.
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