NLY will be added a both a Active Long Trade entry & an Active Long-Term Trade Idea (current price is 10.68). NLY is approaching multi-year support while at oversold levels not seen since just before the 100% +/- rally (not including the substantial dividends that the stock paid out over that 2 year run) began in early 2006. Even with a substantial cut to the 14%+ dividend, the stock may still provide an attractive longer-term entry around current levels, particularly for those seeking income producing investments ideas.
However, this is clearly a “catching a falling knife” trade as the stock has been in a very powerful downtrend for the last 5 months and therefore, all but aggressive traders might wait for NLY to pound out some type of bottom before entering. Another option in between taking a full position here & waiting for confirmation that a bottom may have been put in would be to begin scaling into a position here around the 10.70ish weekly support level, adding lots over the next few weeks to months, only adding to the position if the stock remains near or above this level. Stops on any full position taken here on a weekly close below 10.60. Target TBD soon.