MTG announced a pretty wild earnings surprise today and this beaten up and “left for dead” stock ran out of the gate by 10%.
It’s a name that’s been mentioned by our new Slope friend Jesse and some of the talking heads on CNBC have also touted it of late. What’s all the fuss about? I must say, I have no clue, but it is a leveraged play on the housing recovery. From all time highs above 70 five years ago to a low of 66 cents, you can file this one in the Zombieland files (a la AIG, C, BAC).
I’m calling it to Sloper’s attention because technically and fundamentally it may be worth a short term look. Obviously, the Fundamentals are much better than the Street was looking for based on the huge upside earnings surprise (EPS came in at $0.05. The five earnings estimates compiled by S&P Capital IQ predicted -$0.13 per share. Non-GAAP EPS were $0.05 for Q2 versus -$1.49 per share for the prior-year quarter. GAAP EPS were $0.04 for Q2 versus -$1.37 per share for the prior-year quarter.)
From the chart perspective, take a look:
Now, well above the bollinger bands, it’s pretty obvious that we have a likely binary outcome in front of us. Either, this move has zero support and crashes right back into the Bollingers or a surge of momentum and short covering could fuel a move like MTG saw in March when it again left the Bollingers behind. MACD and RSI are also aligning in similar fashion, so it will be interesting to watch over the coming week what happens with MTG and the market as whole.
Good luck out there Slopers.