FNM Watch

Fannie Mae (FNM) rose sharply at the open, setting a higher high on the third straight trading day of an uptrend.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
FNM $1.08

The stock reached a high of $1.09 before retreating, and then again moving up to retest that level. The last large decline came at $1.11, the level of the current upper trendline.

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If FNM were to significantly exceed that price, it would invalidate the emerging pennant pattern on the chart. A pennant is a continuation pattern, and if this was is in fact valid, then its completion would suggest an 18¢ price increase, from a level of about $1.05.

Because FNM is trading at such low prices, the minimum price move of 1¢ is fairly large in percentage terms, nearly 1%. So that gives chart patterns a somewhat herky-jerky feel.

FNM is also more prone than most stocks to news surprises, given the fact that it's under control of a federal conservator.

Abbreviations:
psar - Parabolic Stop and Reverse
adx - Average Directional Index
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

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