Back in the day (actually, the 1990s), shares of Fannie Mae (FNMA), split adjusted, went from 80 cents to over $80. Yeah! Do the math on the rate of return. We are not back in the day, and unfortunately, looking at the chart of FNMA below, this still is not FNMA's day.
In this first chart of FNMA, we can see that despite the low price on FNMA, it was still cut in half. The downtrend has been in effect all year, despite some fleeting bounces on the way down. FNMA is now below the declining, downward-sloping 50-day and 200-day moving averages. The On-Balance-Volume (OBV) line has moved sharply lower in the past three months, suggesting some pretty aggressive liquidation and selling. Despite the low price level, we fail to see any bullish divergences between the price action and the momentum study.
FNMA did have a very dramatic percentage rise in 2013, but it has been all downhill since that spike to around $6. It might seem harsh, but FNMA could decline back to $1 before finding support. Again, this doesn't look attractive.
