Tuesday, February 13, 2007

Title And Surety Sector Looks Vulnerable To Short Sellers

As I mentioned below, the local biz radio network was talking about how to play the sub-prime mortgage (SPM) break-up. They mentioned the surety/title insurance sector would be the next to get hit. Here's a chart of that sector from Prophet.net.

Photobucket - Video and Image Hosting

The sector has not been able to get above the 260 market, despite three different tries. That indicates it may be vulnerable to short selling or investors who are nervous about the SPM market.

Here's a 1-year chart (sorry about the size. I'm cheap, so I use their free site).

Photobucket - Video and Image Hosting

Notice how the last few days have really hammered the sector. There's an area of congestion in the 258 - 261 area that should provide some technical support. But if the sector breaks through that area there's a lot of downward room to move.

For those of you who are interested in looking in more detail, go to the Prophet.net site. There's a link on the right. I think it's one of the best sites out there.