Is There Resistance Above for MBIA?

Published on Thursday, 07 June 2012 09:16 Written by TradersHuddle Wire

New York, June 7th (TradersHuddle.com) - MBIA Inc. (NYSE:MBI) closed the trading day at $9.54, near its 50 day and 200 day moving averages set at $9.46 and $9.66 respectively. MBIA's price action placed the stock above the 50 day moving average but below its 200 day moving average, providing a nice trading setup with clear reference points.

MBIA Inc. (NYSE:MBI) provides financial guarantee insurance and other forms of credit protection. The Company also offers investment management services to public finance and structured finance issuers, investors and capital market participants.

MBIA seems to be setting up for a tight range between the 50 day moving average as support and the 200 day moving average serving as resistance.

A tiered approach appears to be the best way to maximize possible movements in the stock, as traders could establish a small position in MBIA and wait for the stock to break out above the 200 day moving average at $9.66. Then they could add to the position as momentum builds with the breakout. On the other hand, if support being referenced at the 50 day moving average set at $9.46 breaks, it could signal further downside for MBIA in the horizon.