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Fannie Mae offers second chance

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I'm back on the Fannie Mae (NYSE:FNM) wagon today and feel the recent rally to resistance offers the bearish trader another opportunity for some downside action.

Fannie Mae (FNM) - last 10 months

After a nice move lower last week shares of FNM rallied right back near a level I first profiled the stock as vulnerable to some downside action. Today's drop back below the $81.50 retracement level and further decline below the 200-day MA at $80.23 gives hint that there is some sell side bias toward the stock at these levels.

Washington Mutual (WM) - last 10 months

The last two trading sessions have been lower for shares of Washington Mutual (NYSE:WM). Washington Mutual engages in the business of consumer banking, MORTGAGE banking and commercial banking. Interest rates and bond YIELDs play an important role in the companies future profits.

Notice the recent rally to 19.1% retracement. Very similar to what we've been seeing in FNM. I'm using technical similarities to try and let the action in WM lead subscribers to some potential downside profits in FNM.

Jeff Bailey
Senior Market Technician
Option Investor

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