For those still long NLY or considering a position in the stock, NLY (Annaly Capital Mgmt Inc) is once again trading below the 10.50ish weekly support level after closing below that level last week. In the previous update, it was mentioned that one, especially two weekly closes below support would be bearish for the stock and that may very well prove to be the case. However, from the bullish perspective, NLY is forming some potentially strong positive divergences as shown on the daily chart below. In addition, the stock appears to be forming a hammer candlestick on the weekly chart (although things could change before the weekly stick is finalized at the close of trading on Friday). Hammer candlesticks often form at the end of an extended downtrend and can signal a reversal in a stock. Again, how we close the week is what matters when using weekly candlesticks in your analysis. Additionally, a hammer would need to be followed by one or more bullish candlesticks in order to help confirm a potential reversal in the stock. As such, NLY will remain an Active Long Trade for now. If the stock holds up, a break above the steep downtrend line on the daily chart below could also signal an objective long entry or add-on. There are several other trade ideas that need to be updated but I will be traveling today and out of town for the remainder of the week. As such, I will not be able to post any additional trade ideas, market commentary or updates until I return later this weekend or first thing Monday. For those that celebrate it, have happy and safe Thanksgiving holiday!
–Randy Phinney
