Saturday, September 12, 2009

Genworth Financial (GNW)

One interesting stock is GNW - Genworth Financial. It hit 0.78 PPS back in the March bottom, and has since rallied over 1,000%. The signal was given at $2.00, and has made a 500% return according to the 20/50 EMA crossover strategy. I believe it's still not too late to enter in a long position once it drops back to the 20 EMA.

I like this stock for a couple of technical reasons.

First, it has dropped below the 50 EMA only once since the run started, which shows that it's in a very strong uptrend.

Second, it has risen above all major EMAs shown in the chart below, and the 50 EMA has crossed the 200 EMA (my bull run confirmation).

Third, they have not diluted their shares since the start of the financial meltdown. In fact, their total common shares outstanding have actually decreased year over year. This is an important piece of information to watch out for, as companies that have diluted shares will not rise to their prior highs. Take for example, DRYS, which went through a ~600% dilution since the crisis. The EPS is greatly diminished.


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