NLY (Annaly Capital Mgmt) is an Active Trade in the Growth & Income Trades category (descriptions of each trade category can be found at the top of their respective pages). The trade was first added back on August 19th of last year at a price of 10.68 and since then, this trade has hit some near-term profit targets where partial profit taking was suggested as well a stops being raised. There were also additional objective potential entries or add-ons posted since the original entry, not to mention a double-digit dividend yield paid out along the way (which reduces the cost basis of the trade by the amount of the dividends paid).
- NLY daily July 3, 2014
- IYR daily July 3rd
Such multiple entries, exits & adjustments to position size make it extremely difficult to track the performance on some trades, particularly the Long-term trade ideas which are more conducive to trading around the target levels than the typical Long (swing) Trades. However, based on the previous entry levels and 11-15% yield on the stock since the original entry almost a year ago, NLY is still profitable although I do have my concerns about the position here. After forming some bearish divergences over the last few months, NLY has come under some selling pressure in recent trading sessions and is now approaching support as shown by the red uptrend line on this updated daily chart. Although the chart still looks constructive on the weekly time frame, any solid weekly close below the 10.50 area would hamper the longer-term bullish case for the stock. As such, longer-term traders or investor in this position might consider such a weekly close (below 10.50) as a final stop on a position. However, in order to protect profits on the current trade, NLY will be considered stopped out on a weekly close below the red uptrend line on this daily chart (currently below 10.93).
On a related note, I also have my concerns about the REIT sector in general ($DJUSRE & the IYR), which has broken below a primary uptrend line today after recently printing a divergent high (daily time frame). With NLY being a component of this sector, that is one more reason that I am tightening up the reins on this trade at this time.
click here to view the live, annotated daily chart of NLY