Thursday, July 22, 2010

ANH Watch

Mortgage-investor Anworth Mortgage Asset Corp. (ANH), cruising along for a third day in bull phase, is showing a remarkable lack of volatility as approaches a July 29 earnings announcement after the markets close.
ANH $7.32

Following the May 6 flash crash, a 13% intraday fall for ANH, the stock dusted itself off and began a slow, steady rise than in the main has continued unabated through bull signals and bear signals up to the present day.

The stock's trading pattern since it peaked at $16.65 in 2003 has been one of choppy decline and choppy retracement to a lower high. So it's not a stock that I trust for the long-term. For the shorter-term, however, it may be worth going along for the ride.

The price is well above the 200-day moving average and is tracking just above the 20-day moving average.

On the downside, however, volumes are well below their normal levels on the three-month chart, which suggests that trading reflects disinterest rather than quiet confidence.

The company pays quarter dividends. The most recent was 0.25, or 13.9% annualized based on the prior day's close.

Person's Table
ppspps openupper pivotlower pivot
ANH $7.32 $7.21 jul20 $7.75 $6.74

I can see ANH as a dividend play, using shares rather than options, to be exited upon a bear signal from the pps, or -- trader's choice -- another oscillator, such as the macd or parabolic sar.

The option strike prices are $.50 apart, and the premiums are very low for the nearest out-of-the-money option. So selling covered calls on shares would not be an attractive tactic, in my opinion.

Reversal Levels
  • $7.75, +5.9% (upper pivot)
  • $7.38, +0.8% (6-month high)
  • $7.32 <== You are here.
  • $7.21, -1.5%
  • $6.74, -7.9%

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 reemerge from the wreckage.

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.
  • 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.

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