Assured Guaranty Ltd. provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. It offers insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments, including scheduled interest and principal payments. The company insures various securities, including bonds issued by the United States state or municipal governmental authorities; notes issued to finance international infrastructure projects; and asset-backed securities issued by special purpose entities. It also insures and reinsures various types of the United States public finance obligations, such as general obligation, tax-backed, municipal utility, transportation, healthcare, higher education, housing revenue, infrastructure, investor-owned utility, and other public finance bonds; and various types of non-United States public finance obligations comprising infrastructure finance, regulated utilities, pooled infrastructure, and other public finance obligations.
Take a look at the 1-year chart of Assured (NYSE: AGO) below with added notations:
AGO has had a wild ride this year. During the swings the stock has reached the $26.50 (blue) mark several times only to end up eventually pulling back down. If AGO can retest the $26.50 level once more the stock may finally look to break through it. A close above that resistance would also constitute a new 52-week high.
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The Tale of the Tape: AGO has a 52-week resistance at $26.50. The possible long position on the stock would be on a breakout above that level with a stop placed under it.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
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