FNM Watch: Good, Bad, Ugly

Not to get all happy-sappy over Fannie Mae, but FNM is moving in directions that suggest things might possibly will sort of be looking up maybe. Unless they don't, of course.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
FNM $0.35

One happy thing is the macd. Well, not entirely happy -- it's still in the red, below the zero line, but it's moving up steadily and has been for seven trading days.

And the macd fast moving average has inflected through sideways and now is sort of working at up.

Another happy thing is the fast stochastic. Well, "happy" is sort of an exaggeration, but "not sad" would be accurate. The indicator is still in downbeat territory, below the 20-line, but it has been running pretty much sideways for five trading days. If things aren't getting any worse, that's good, right?

Now there is the pesky problem of the trend -- the direction of highs and lows. FNM has been making a nearly uninterrupted series of lower highs and lower lows for the past seven trading days. That's definitely bad.

And Tuesday's volume was way up as the price hit a swing low of 34¢, and the 133-tick chart shows the biggest volume spike came during the swift slide to that low. So, that's not good. It fact, that's downright ugly.

Plus the parabolic sar and Person's Proprietary Signal remain in bear mode, and the price is way below the 20-day simple moving average. Bad, bad, bad.

So with FNM we have the good, the bad and the ugly well represented as the stock nears its delisting from the NYSE, scheduled to happen in a week or so.

A couple of observations:

1) FNM is near to it's all-time low of 30¢ net in November 2008.

2) This month's trading range, traversing 65.3% in a downward move, is the largest since the stock's huge 274% rise in August 2009, with the highest volume since December 2009, also an up month.

So, no happy-sappy here. FNM's downward slide has momentum by almost any measure. Could the macd signify a turn ahead? Sure. Guaranteed? No way.

Monthly Lows

• $0.35 <== You are here.
• $0.34, -2.9% (today)
• $0.30, -14.3% (11/2008)

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The Great Reflation: How Investors Can Profit From the New World of Money OK. The credit bubble burst. Housing, burst. Shockwaves reverberated. Markets collapsed. What lies ahead as we remerge from the wreckage.

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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.