FNM Watch

Fannie Mae (FNM) is trading lower this morning, within the range set in Tuesday's huge decline, which followed Monday's equally huge run-up. Fannie rarely does things by half measures.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
FNM $1.24

The price pattern defies easy analysis at this point. From Tuesday, it has recorded a lower high/higher low, higher high/higher low, even lower high/lower low. So it has some triangle characteristics, in that the upper and lower trendlines are converging to a common point, but it's a bit sloppy and I'm not ready to declare a triangle as yet.

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If it were a triangle, and if it did the normal triangle behavior of rising by the amount of the base upon breakout, then here are the parameters:

• Height of base: 19¢
• Possible breakout level: About $1.27
• Breakout target: $1.46

That target would push the price past the next (61.8%) Fibonacci retracement level of $1.43. The lower Fib level, $1.21, has not been breached since Tuesday. 

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