Why would someone buy FNM.

http://www.marketwatch.com/news/story/fannie-mae-toast/story.aspx?gui...

The whole financial sector is in terrible shape and $200 billion is
not enough to fix it.  The Fed's new move is only temporary.  The
problem still persists.  I don't know why people are buying this
stock.  It is too early to judge.

"You only find out who is swimming naked when the tide goes out"
-Warren Buffet

The tide has not gone out, and it certainly think Fannie is swimming
naked.

I bought a bunch of FNM on the dip and sold almost at the high.
Traders short it to the support.  I bottom fish the stock and wait
until they have to cover and sell it back to them at a higher price .
I don't really care about Fannie Mae's problems.  Just play the
momentum.

HA!  I just did it again!!!!  KEEP ON SHORTING so I can BUY when it's
really low and sell it back to you when you try to cover!!!

Can you teach me how to do that?

In financial market, shallow profit is always noisier than profound
loss

Jon, I'm not a professional trader but when I take into consideration
the totality of the circumstances...I have to try to think like the
big boys.  Here are my unprofessional opinions.

1.  Support seems to be at about $20.  If you take a look at recent
days, everytime it gets around $20, it bounces up.
2.  This stock is 95% institution owned.  They invest for the long
run...and in the long run, this stock has a lot of upside potential an
minimal downside once it hits support.  The big boys will buy up this
stock at support to average down there positions.  If you think long
term, it is a steal for them to buy in when these shorters push it
down.
3.  Anyone who thinks they can short this stock down to nothing is
fooling themselves.  This is a company that is supported by the
government in one way or another.  Regardless of near term bad news,
this stock will do well for long term investors.
4.  The bad news is already priced into the stock.  It will take
severe bad news to drive it down much worst and VERY minimal good news
to make it go up VERY fast as you can see today.  One of the reason
why it will go up really fast is because Shorters will rush to cover
their shorts.  Unfortunately for them, a lot of shorters will try to
cover at the same time which will make the prices go up really fast.
Just buy in when they push down the price around support...average
down if it dips lower and wait for some good news to make your sale.

Like I said, I'm not a professional so my opinions are just that.
Hope you make some money!!  :o)

I hope I make some money too! Thanks for the response. I actually
bought FNM a while ago around $34, watched it drop into the low 30's,
then pop back up to 34-35 and sold it. I'm glad I did, but I put the
money into other stocks, so I don't have any "play" money right now.
Not only that, but I've lost 15% of what I invested in Oct-Nov '07 and
I'm new to all of this, so it's been a rough few months. I'd love to
learn how to play a bear market like this though.

Jon, just look at the support for each stock that you intend to buy.
Find out how much of it is institutional owned, the higher the
better.  I also look at good companies with good dividends.  I bought
into NLY this morning at $13.50 and just dumped it at $15.50.  They
just raised their dividends to .48 this quarter.  People will buy into
this stock when it is low because of the dividend yield.  The marke is
oversold so watch the support and play the momentum for good
companies.  Hope you make back some money that you've loss and come
out ahead.  Here are some other companies that I have bought into and
sold.

HTE - high dividends (I bought this at $22.61 hoping to make good
dividends for the long run but it jumped .92 cents today when I sold
it.  I'll take 3 months of dividend ahead anyday)
WFC - the only bank out of the top 5 with AAA credit rating.  Look for
support around the $27s
NLY - this stock is oversold and the shorters keep trying to push it
down some more.  It is forming a support around $13s
DFS - this is also forming support around $13s recently
CFC - seems to be supporting around $4.30s
GE - good stable company.  Makes money worldwide
AMAT - same as above
CAT - same as above

Also study how wide a stock swings if you plan to take a position
during the day.  Form a list of your favorite stocks and study the
heck out of it.  In my opinion, these are what I look for besides in
order of priority when I buy in.  BUY on bad news when you think it
hits some support.  SELL on good news!  If you do the opposite, you'll
lose money.

1.  Earnings, Splits, Buyouts, etc... - Moves individual stocks
2.  Market news - Moves a certain sector
3.  Investor sentiments - good when there is no news, good or bad.
Learn how to read candlesticks, MACDs, SMAs and so on.

Good luck Jon.

I would not try to use that strategy again right now.  The market is
not going to have a significant enough bounce back.  The bear sterns
news has really stomped the market and the Fed will not react for a
bit, so it might be a while for a significant jump.

I'm glad the bad news came out about Bear Stearns.  We are supposed to
BUY on bad news so it gave me a chance to take up positions in other
stocks at support.  FNM pretty much kept what it gained yesterday
which is good but I didn't buy back in.  Support is at about $20 so
I'm not taking a position again until then.  I agree that the market
is forming a double bottom right now and in my opinion, we are staging
for a big rally.  At this point, I believe Financials are beyond
fundamentals and we're now looking at technicals. I'm relatively
confident that my downside risk is minimal at this point.  I was
jumping all around the market today taking positions in several stocks
that I think hit support.  This ensures minimal downside risk.  Some
of the positions that I took today.

JRT - $8.18
C - $19.60
WLP - $46.75
NLY - $13.98
CFC - $4.45

I'll have to average down if they sink further on Monday but I think I
took relatively safe positions.  I'll see what else I can pick up on
Monday if the markets dip again.  I believe we have Hedge funds and
other institutional investors that have loss a lot of money so far and
are now beginning to take long positions.  Hopefully we'll see a
little bounce next week so I can strengthen my positions.

JONREYNOLD - Did you pick up the shares at support yesterday and sell
it off today?