The retreat left an emerging pennant price pattern intact. (Blue lines on the chart.)
FNM has traversed 3.6% high to low in today's downward move. The high point, $1.12, was the same as yesterday's.
| trend | adx | psar | pps | macd | macd trend | sto | sto trend | |
|---|---|---|---|---|---|---|---|---|
| FNM $1.08 |
A pennant is a continuation pattern. Once it is complete, the price breakout at the apex according to doctrine will be to the upside and will equal the length of the base, the 18¢ upward move of March 9.
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Of course, like any technical analysis tool, a pennant is perfectly valid until it isn't. Failures happen. And the greater the number of traders following a pattern's development, it sometimes seems, the greater the likelihood that a failure will occur.
This is art, not science.
Also, Congress comes back to work next week. Should this make FNM holders nervous? Oh, yeah!
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.
New to private trading? Here's a look at How to Become a Private Trader.
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