FNM Watch

The mortgage company Fannie Mae (FNM) has moved back above the 50% Fibonacci retracement level, at $1.21, and is trading without much conviction in a range that has covered -1.6% high to low so far today.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
FNM $1.23

Volume on FNM -- a high flier fallen to penny stock status -- has declined for four straight trading days. Earnings will be announced on May 6.

Fannie's technicals continue mixed.

The parabolic sar shows bull mode, but Person's Proprietary Signal show bear mode. Generally these two binary signals are closely aligned.

The macd continues for a third day to decline toward the zero line. The stochastic meanders in the neutral zone, dithering in direction between slightly rising and sideways.

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As seems to be common for Fannie these days, the price action can be interpreted as a symmetrical triangle, with a base covering 26¢ across two days.

If I project forward and take $1.22 as the apex, then the construct implies a rise to $1.48, or 21.3%.

It's a fairly sloppy triangle, however, and so the smart trader (i.e., the cautious trader) will think hard about whether the triangle is based on price movements or the tendency of the human brain to see patterns everywhere.

This signal is followed in the daily Watchlist, which is posted beginning around 2:45 p.m. Eastern. Look for it at www.timbovee.com.

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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