MTG - MGIC Investment $72.40 +2.30 (+3.77)

Tuesday's Comment:

MTG made up some lost ground on Tuesday, and did so on improved volume. MTG traded 530,000 shares and advanced back towards its neckline. The key to MTG's next leg higher will be volume in the session that it is able to close above $70.65. The more volume we have on that day, the less likely it is that MTG will roll back over. Traders may wish to time new entries with a close above $70.65 on volume of at least 600,000 shares. Our stops remain at $66.75 to protect on the downside.

Wednesday's Update:

We were waiting for good volume to come into MTG and boy did we get it on Wednesday. MTG traded 1.4 million shares as it advanced up through resistance at $70.65. The stock rocketed as high as $74 before profit taking settled in, causing MTG to ease back to $72.40. We are indeed encouraged by the strong move, but now anticipate that shares will pullback in the near term. Therefore, traders might want to think about getting into MTG on a pullback to the $71 level. If $71 holds, look to get in on a bounce of this level, accompanied by volume of at least 600,000 shares for the day. Resistance for MTG has become today's high of $74 and support should show up at $70.50. Our stop remains at $66.75 for now, but will likely be raised on Thursday.

Picked on June 5th @ $70.37 Change Since Picked +2.03 Stop Loss @ $66.75

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