SAFECO chart looks fishy

This past weekend, our Alert HQ market scan identified SAFECO Corp. (SAF) as a BUY. Since then, we heard that Liberty Mutual was making an offer to acquire SAFECO at a significant premium.

I cannot say that Alert HQ has the ability to identify buyout candidates. What I can say is that Alert HQ has the ability to identify stocks that are moving up significantly after a prolonged down-trend.

As can be seen in the chart below, SAF was moving up well in advance of the announcement.

So I am wondering why SAF was moving up so strongly. In the last quarter, the company had registered a drop in earnings and expectations, as with most financial companies, were not particularly bright. What was driving the recent stock price gain? Did some people know this buyout was on the way?

Just something I was wondering about...

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