Thursday, July 22, 2010

NLY Watch

Annaly Capital Management Inc.(NLY), a mortgage-backed dividend play, has moved to bull phase on Person's Proprietary Signal (pps). If the price follows the signal, then NLY would be shaking off the management's decision to float more common shares.
NLY $17.72

That decision cost shareholders 5.9% in a downward gap seven trading days ago that turned what would have been the sixth bullish day into a price rout that kicked off a cascade of bear signals.

NLY announces earnings on July 29 after the markets close, and analysts yesterday were making nice about the company's prospects.

The company's most recent quarterly dividend, 68¢, was 15.3% annualized against the prior-day's close. So this is a revenue stock, and the low volatility is one symptom: 1.8% over 14 days, 2% over 200 days.

On the chart, it's worth noting that the gap-day carnage left the price above the 200-day exponential moving average.

Today's high (so far) of $17.80 is the highest price reached since the July 14 gap. However, a serious rise would, at the least, need to take out the midpoint of the gap at $17.88, and even better, retrace the full interval to the pre-gap close of $18.26.

Today's signal and higher price hasn't been accompanied by any volume spike. The trading day is still young, but so far the pace of trading seems below yesterday's, which saw a price decline intraday.

The parabolic sar remains in bear phase, as does the macd, although it is rising toward the zero line.

The fast stochastic has turned bullish by moving from oversold territory into the neutral zone.

Person's Table
ppspps openupper pivotlower pivot
NLY $17.72 $17.72 jul22 $18.62 $16.63

On the Persons' chart, NLY is bouncing along just above the $17.36 pivot midline with a relatively narrow spread between the upper and lower pivots.

Reversal Levels
  • $18.37, +3.7%
  • $17.80, +0.5%
  • $17.72 <== You are here.

  • $17.35, -2.1%

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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