FNM Watch

A nice two-day retracement for Fannie Mae (FNM), but where's the volume? Doctrine says that without an good increase in shares traded, the price increases can't be taken seriously. But looked at another way, volume is sort of -- well, high.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
FNM $0.42

Since the price collapse (yet again!) on June 16, with the announcement that the shares would be delisted from the NYSE and move to over-the-counter trading, volume has trickled down steadily day to day:

• 122.4 million shares last Thursday, 
• 102.0 million on Friday, 
• 68.9 million on Monday, 
• 31.7 million today (with 45 minutes left before the close).

From Friday's low of 35¢, the price has risen 28.6% to today's high of 45¢. But without the volume to buttress the rise, it means little.

Even so, volume is running much higher than it was before the price collapse, when most days saw fewer than 10 million shares traded. Doctrine, therefore, says that this baby is rocking and rocketing as it climbs.

This is an Orwellian paradox: Shares are both high and low simultaneously. War is Peace. 2+2=5.

Also significant, the price has yet to reach the collapse-day close of 56¢, or even the day-after height of 48¢. So there has been nothing resembling a breakout.


Reversal Levels

• $0.48, +14.3%
• $0.45, +7.1%
• $0.42 <== You are here.
• $0.35, -16.7%

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Disclaimer

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

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
• 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.