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SAFECO - SAFC - close: 49.84 change: -0.31 stop: 52.01

Company Description:
Safeco, in business since 1923, is a Fortune 500 property and casualty insurance company based in Seattle. The company sells insurance to drivers, home owners and owners of small- and mid-sized businesses through a national network of independent agents and brokers. (source: company press release or website)

Why We Like It:
The IUX insurance index just broke down under support at the 350 level and is quickly approaching technical support at its 200-dma. Helping lead the way lower is SAFC, which has been showing relative weakness for three weeks now. SAFC was very weak in January with a sharp dive from the $60 region to almost $50. The stock spent the last couple of months consolidating that lost but SAFC reversed lower again after testing the 38.2% Fibonacci retracement level (see chart) and technical resistance at the 50-dma and exponential 200-dma. Now SAFC has broken down below the February lows and round-number support at the $50.00 mark. Believe it or not the P&F chart is still bullish but a move under $49.00 would produce a new sell signal. We are suggesting short positions here under $50.00 with a target in the $45.50-45.00 range. We do not want to hold over the May 2nd earnings report.

Picked on April 09 at $ 49.84
Change since picked: + 0.00
Earnings Date 05/02/06 (unconfirmed)
Average Daily Volume = 755 thousand

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