MBIA, Inc. is engaged in providing financial guarantee insurance and investment management and financial services to public finance clients and financial institutions on a global basis. Financial guarantees for municipal bonds, asset-backed and mortgage-backed securities, investor-owned utility bonds, and collateralized obligations of sovereigns, corporations and financial institutions, both in the new issue and secondary markets, are provided through the Company's wholly owned subsidiary, MBIA Insurance Corporation. The Company also provides investment management products and financial services through a group of subsidiary companies. These services include cash management, municipal investment agreements, discretionary asset management, purchase and administrative services, and municipal revenue enhancement services.

April 2, 2001

As traders continue to dodge bullets in the slow grinding technology sector, opportunities appear to be rising lsewhere. 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.

Picked on April 2nd@ $81.70
Change since picked 0.00
Stop Loss @ $76.50

April 5, 2001

Enjoying the benefits of a broad market rally, MBI surged to a new all time high close in Thursday trading session, gaining 3.85% on the day. A swift gap at the open sent a signal to momentum traders who took the stock as high as $82.98. Buying was strong throughout the entire financial services sector, with the NYSE Financial Index (NFX) adding 19.53 points, or 3.50%, to close at 577.38. We want to point out that the NFX could be close to breaking its down trendline, which could signal further strength to the sector. Turning back to the MBI chart, the technical indicators are certainly making the stock a stand out. Currently, the MACD and stochastic indicators are clearly trending higher, with the RSI starting to edge higher. On Balance Volume is also looking very strong at year high levels, suggesting to us that ample buying is occurring on positive days. Traders looking for additional entry points should wait for a sharp break through resistance at today’s high of $82.92 or a bounce off the 5-dma of $80.90. Continue to hold a firm stop at the $76.50 mark.

Picked on April 2nd@ $81.70
Change since picked +1.09
Stop Loss @ $76.50

April 3, 2001

The interest rate environment for mortgage-backed securities remains strong and continues to keep shares of MBI positioned for more gains. On Monday, MBI shares delivered a nice rally, hitting an all-time high of $83.80. More importantly, the stock was able to close above its old high, which positioned us for a nice rally on Tuesday. Although this scenario didn’t unfold to our expectations, MBI shares did pullback on light volume during today’s trading session. With 541,900 shares crossing the tape, volume was held under the three-month daily average, as the stock gave back 2.55% to close at $79.61. The good news is that MBI was able to hold at its 5-dma ($79.62). Although, the 5-dma resides right next to current levels, it positions us for a sharp bounce as early as tomorrow. The short-term technicals also look bright, with both the MACD holding positive and the OBV at year highs. So, we’ll now look for an upside move to encounter initial resistance at the $80 mark and then at the all time high ($83.80). Support will come in at the 5-dma and just lower at the 10-dma of $77.85. Consider entries when the stock breaks above resistance or bounces from support on good volume of 275,000 shares traded by noon. Continue to hold a firm stop at the $76.50 mark.

Picked on April 2nd@ $81.70
Change since picked –2.09
Stop Loss @ $76.50