Fannie Mae trades to $5 for the first time since May 2013. It has advanced 50% since the opening at $3.335 only four days ago. A noted bank analyst Dick Bove recently suggested FNMA ‘could be worth $18 per share.
If the security holds the gains today, falling back at most to say $4.85 for close, there would be a strong bullish ‘three-white-soldiers’ projecting still higher prices. Based on a settlement at or about $5 today, it is a lot easier for me to see $6 before $4.
Note also that the security settled yesterday above the high settle back in late-May 2013 and today’s advance, if sustained, would support the bullish implications of that bullish break-out.
The debate rages as to who is the rightful owner of earnings from operations of this extremely profitable GSE. For today, folks are indicating through share purchases that chances are shareholders will get a piece of the action.