Been a long term investor in FNMA (over a decade) and this is a long term investment in my portfolio, currently on the daily it has hit a supply level and formed a bearish pin bar with RSI divergence, so looks likely a short - medium term retracement is here
Typically strong divergence this means the price will retrace back to at least the 20ema if not the 50ema which is a little bit below current price and also coincides with a monthly triangle breakout level which could form part of a retest of this multi year key level
I'm looking for the retest to happen within the next 2 weeks to confirm a monthly breakout of a multi year triangle - which funnily enough coincides with a decision on the removal of the governments controversial 'net worth sweep' ruling in 2012 and allow FNMA to build capital again - which will inevitably increase the intrinsic value of FNMA
This would mark the start of the entity being moved back into public hands and if this aligns with a monthly breakout then I suspect we will see rapid and strong growth in this stock which will likely last years
Given the legal controversy and negative perspective written by the press who mostly do not know the history of FNMA and the false pretenses that it was somehow responsible for the GFC, (it was a scapegoat to bail out fraudsters at banks - who paid massive fines back to NFMA/ treasury - with no admission of wrong doing of course!)
it is a high risk/ high reward play, but steps are being taken to increase capital through retained earnings and this can only lead to a higher value of the entity
Typically strong divergence this means the price will retrace back to at least the 20ema if not the 50ema which is a little bit below current price and also coincides with a monthly triangle breakout level which could form part of a retest of this multi year key level
I'm looking for the retest to happen within the next 2 weeks to confirm a monthly breakout of a multi year triangle - which funnily enough coincides with a decision on the removal of the governments controversial 'net worth sweep' ruling in 2012 and allow FNMA to build capital again - which will inevitably increase the intrinsic value of FNMA
This would mark the start of the entity being moved back into public hands and if this aligns with a monthly breakout then I suspect we will see rapid and strong growth in this stock which will likely last years
Given the legal controversy and negative perspective written by the press who mostly do not know the history of FNMA and the false pretenses that it was somehow responsible for the GFC, (it was a scapegoat to bail out fraudsters at banks - who paid massive fines back to NFMA/ treasury - with no admission of wrong doing of course!)
it is a high risk/ high reward play, but steps are being taken to increase capital through retained earnings and this can only lead to a higher value of the entity
Comment:
Although the spike could just be a bad tick....
Comment:
Bingo... heading back to $2.85
This doesn't look terribly strong as I don't really like long tails on candles, so would probably lean more towards more downside to retest the 50 ema
Just a guess, but if it goes a bit lower to retest the monthly triangle top again and starts forming small bars then I may add to my existing position