Radian Group, Inc., through its wholly owned subsidiaries, Radian Guaranty Inc. and Amerin Guaranty Corporation, provides private mortgage insurance coverage in the United States on residential mortgage loans. For the 9 months ended 9/30/00, total revenues increased 11% to $455.4M. Net income applic. to Common rose 87% to $182.1M. Results reflect strong new insurance volume, lower policy acquisition costs and the absence of merger expenses.

December 21, 2000

Radian is a provider of private mortgage insurance. Now that the Fed has changed to a neutral bias, the threat of higher rates has subsided. Home sales are likely to stabilize and possibly start to increase in the coming months. In fact, they already are. Yesterday, housing starts came in at an annualized rate of 1.56 million units in November, the highest rate since June, which proves that low borrowing costs are keeping housing demand high despite increasing worry about the overall economy. This is very good news for Radian. After a solid week, Radian's share price is on the verge of making a new high. The current all time high is $73.13. A low P/E of 11.99 is yet another attractive feature that encourages taking a position in the stock. Additionally, the MACD has been rising steadily this month and the OBV and Money Flow are well off their highs for the year. These indicators are stable and are slightly bullish. A break into new high ground could attract another round of buying from momentum traders.

Picked on December 21st @ $72.31
Change since picked +0.00
Stop Loss @ $67.00

January 2, 2001

The first several hours of the new trading year were marked by profit taking. Consequently, we were stopped on this play with a slight loss. The FOMC meeting two weeks ago provided some short-term momentum for financial stocks. However, the market is still dominated by fear. Any profits, even tiny profits, appear to be irresistibly tempting for traders. Radian still has the possibility to recover quickly. The stock possesses one of the best charts on the NYSE. We will continue to monitor the stock to look for another buying opportunity.

Picked on December 21st @ $72.31
Profit/Loss -0.31 (0%) (Stopped Tuesday @ $72.00)
Best Profit +4.69 (6%)

December 31, 2000

There was broad based, but mostly light profit taking that took place on Friday among some of the strongest industry groups. Financial stocks figure prominently among the groups that are exhibiting the strongest relative strength. Radian is a mortgage insurance company and is affected by most of the same influences that affect more traditional financial companies such as banks. The recent easing of a hawkish stance by the FOMC has sparked renewed optimism that the coming fiscal year could be solid for companies like Radian. The stock established a new all time high of $76.94 on Thursday. The small pullback on Friday may have been caused by an RSI that is currently indicating a short-term overbought condition. Although this makes us a bit cautious in the short term, the MACD and the clear up trend in the share price help us to be bullish about the stock’s immediate future. The all time high should provide light resistance and we see short term trend line support at $73.50.

Picked on December 21st @ $72.31
Change since picked +2.75
Stop Loss @ $72.00