MTG, a holding company, provides private mortgage insurance coverage in the United States to the home mortgagelending industry through Mortgage Guaranty Insurance Corp. For the 3 months ended 3/31/01, total revenues increased 23% to $320.5M. Net income increased 24% to $157.9M. Revenues reflect an increase in new business writings and realized investment gains. Earnings also reflect higher gross margins.

May 31, 2001

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 every 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. 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 pretty good trendline support at $67.00 and have subsequently set our suggested stop just a little lower.

Picked on May 31st @ $70.37
Change since picked +0.00
Stop Loss @ $66.75

June 14, 2001

MTG gave back all of Wednesday's gains on Thursday, as the stock retreated by $1.58 on the session. The bad news is that volume picked up today as the stock headed lower. The good news is that the current up trend is still in tact, as today's low was a higher low. Going forward, we will look for MTG to find support at its 10-dma at $71.38. Resistance has come in at $74. MTG's MACD also looks to be rolling over, so hopefully the stock will find support soon. Traders looking to get into MTG should wait until the stock can close over $73.79 (previous closing high) on volume of at least 750,000 shares for the day.

Picked on May 31st @ $70.37
Change Since Picked +1.84
Stop Loss @ $66.75

June 12, 2001

Our financial services play has been holding up well considering that most banks, brokers and insurance plays have been wilting lately. While MTG is not directly related to the banks and brokers (it's a mortgage insurer), the stock still keys off the same interest rate and consumer confidence data that the banks and brokerage stocks have been. Looking at the chart, MTG has now formed a symmetrical triangle formation and appears to want to break to the upside. The stock has found good support in the neighborhood of $71 and its MACD is still decidedly positive. Traders looking to get into MTG should wait until the stock can close above resistance at $73 on volume of at least 750 million shares for the day.

Picked on May 31st @ $70.37
Change Since Picked +1.03
Stop Loss @ $66.75

June 10, 2001

MTG continues to sell off on light volume. Friday say the stock lose $0.36 on volume of only 310,000 shares. The good news is that the stock has been putting in higher lows, so the up trend remains intact. In addition, even though MTG lost ground on Friday, it still closed within the upper half of its daily range, indicating that there were some buyers that emerged. We will be watching for support at $70.50 to hold up in the near term and for the MACD to remain positive. If you are thinking about adding MTG to your portfolio, look to go in with a half position on a break above $72. You can add to the position if the stock can breach $74 on good volume of at least 750,000 shares for the day.

Picked on May 31st @ $70.37
Change Since Picked +1.03
Stop Loss @ $66.75