Friday, July 23, 2010

Watch out for mortgage insurers next week

The mortgage insurers look good to me over here and are worth having on the watchlist for next week. First, a word of caution on these stocks - PMI, MTG, RDN. All three of them are highly volatile and are prone to gap ups/downs. That said, they can pay off big time during trending markets. I usually use them as day trades to negate the risk of holding them overnight. If you would like to hold them overnight, you might consider taking in smaller positions than usual, like I did with MTG today.

PMI - Coming off a nice basing pattern. Nice move above MA(50) today with a nice close. If 4 prints, this could run to 4.50. Like how both RSI and MACD are shaping up. If only some volume would come in now.


MTG - An important close above 9 today. Reported better than expected earnings earlier this week, which is really a big deal for these mortgage insurers. First target - 9.50.


RDN - Held up the long term support at 7. Again, the RSI and MACD look encouraging. Could run up to 10 if the market cooperates.


Enjoy the weekend!

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