Quazimoto’s bottom feeding function gave signals of a buy for Fannie Mae (Stock Symbol: FNM) anywhere below .51. I saw this the other day and ignored it choosing instead to hold my small position purchased last week at .81. Quazimoto seems to be insisting that a price below .80 is a low risk, high reward play. No reason was given but when this happens, I usually dig up some pocket change and plunk it down. While this may seem like blind faith, the fact is that this stock will go either of two ways…up or down. Quazi believes the steady volume after the major gap down coupled with the huge speculative nature of the market will more than likely propel this stock in an upward direction at least in the short term. Adding in a lack of short sellers and Quazi’s buy signal lights up in a big way. No guarantee that the ride up won’t be a bumpy one though.
Stock traders who trade without good sound reasoning become former stock traders very quickly. The key here, as with most penny stocks, is to use only what you are willing to lose.