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PLAY > New Plays Thursday, May 31, 2001
New Split Plays   New Candidate Plays   New Momentum Plays
(We update our stop losses daily at the CURRENT PLAYS page.)

New Split Plays

None

New Candidate Plays

MTG - MGIC Investment Corp $70.37 +2.27 (+3.53)

MGIC, which is a private mortgage insurance company, is a clear beneficiary of the slew of interest rate cuts we have seen. Lower interest rates almost always stimulate new home sales, as well as mortgage refinancing. MGIC employees are probably very busy these days. The stock has been on a very nice run since it came close to testing its 200-DMA of $60.50 back in mid-April. The stock is fast approaching the price level it was at when the company announced its last split. The last split was announced in May of 1997 when the stock was trading at $82.00. The technical situation really improved today. Not only did the stock have a nice gain today, but it was accomplished with solid volume of 830,300 shares or just about 100,000 shares more than the average daily volume. In addition, MTG closed above its neckline at $70, completing an inverse head and shoulders breakout. MGIC is now in striking distance of its all time high of $74.50 and its 52-week high of $71.50. Therefore, a rally above $71.50 tomorrow, might propel the stock very quickly to the $74.50 resistance. Obviously, this would be a nice little trade. The MACD is positive and supports the possibility of a continued rally. One mild concern is the RSI, which is hitting resistance and is suggesting a mildly overbought condition. We see some good trendline support at $67.00 and have subsequently set our suggested stop just a little lower at $66.75.


Picked on May 31st @ $70.37
Change since picked +0.00
Stop Loss @ $66.75
 
Interactive Chart Quote News First Call on MTG
 

New Momentum Plays

None

New Plays Index

 


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