Thursday, February 27, 2014

FNMA; 50% 4-day Jump & Likely More

Fannie Mae trades to $5 for the first time since May of ’13.  It has advanced 50% since the opening at $3.335 only 4 days ago.  A noted bank analyst Dick Bove recently suggested FNMA ‘could be worth $18 per share. 

If the security holds the gains today, falling back at most to say $4.85 for close, there would be a strong bullish ‘three white soldiers’ projecting still higher prices.  Based on a settlement at or about $5 today, it is a lot easier for me to see $6 trading before $4.  

Note also that the security settled yesterday above the high settle back in late-May  ’13 and today’s advance, if sustained, would support the bullish implications of that bullish break-out. 

The debate rages as to who is the rightful owner of earnings from operations of this extremely profitable GSE.  For today, folks are indicating through share purchases that chances are shareholders will get a piece of the action. 

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