mbl support areas People tend to buy shares on three rationales,...

mbl support areas People tend to buy shares on three rationales, capital gain, yield or total return, an amalgam of both. This week will likely see testing of the first real support area for MBL, around $61, a region of congestion some months back, before the mania driven parabolic rise to that apparent $75-78 area blow off top.

Professional speculators could probably hardly believe their luck that the unwashed would pay them in excess of $72 driven by euphoric expectations of open ended capital gain, depite such a miserable yield. Considering the 410% run up from the sub $19 price of March 2003, this was intrepid buying.

Now that a little excess froth has cleared, more sober pricing levels might be considered. If reports of emerging inflation in the USA and elsewhere prove credible, and higher interest rates worldwide result, the edge may come off expectations for financial service companies.

If the $61 level support fails, and many punters may have been buying MBL only because the shares were seen as fast rising, then my lunching group see the next underlying major support level around $49-51.

Alternately, the share price may firstly effect some degree of bounce from the current low $60s area. It will be interesting to see how many are prepared to punt on a return to mid $70 area pricing anytime soon after a sanguine look at the yield.