Fannie Mae-No Politics (FNMA)

[Nelson478]

Price Manipulation Response Strategy

We will likely see more tweets and news articles intended to scare retail investors out of their shares so institutions can continue to accumulate at a discount and so that the "last 90-day averaged share price" used in any hypothetical future plan involving new equity issuance or conversions is as low as possible.

You'll notice the timing of the news articles to happen after close and usually on weekends so firms can move positions in the dark pools and be ready for a gap down on open to trigger a fear selloff.

When the market opens and the shares start to rapidly decline (and assuming you're slightly experienced with retail trading software from ETrade, TDAmeritrade, or Interactive Brokers, and others) you should consider doing the following at open.

1) Sell no more than 15% of your position right at open as you see the price dump. This way you protect your overall position if it does a quick reversal. You don't want to be out when it returns back to normal.
2) Watch the stock drop using a 1 minute chart and a 5 tick chart with candles. Add MACD and RSI to the chart as well.
3) To know when the selling pressure is likely done and you've reached the bottom of the downward "fear based" price action, look for the following four indicators:
3a) Volume in forward candles is tapering off and not as intense as during the selling pressure.
3b) Price begins to consolidate sideways. This means it is staying horizontal for a handful of 1 minute candles. It's not going up much or going down much.
3c) The RSI is below 30 but now starting to move above 30.
3d) The MACD signal line has a cross over event and now starting to move up and go positive.
4) When you see these four signs, buy back your 15% and add to your position if possible.
5) Watch the market realize the news was fake and flood back into the stock.

You will make a nice profit and this profit is part of your arsenal to help you defend against future attacks. This additional profit buffer acts as insulation for you against the next manipulation event. It will help you with your investing psychology and reduce your fear. You will now have a new profit buffer to protect you against the next news article and now you understand how this game is played. This reduces the likelihood you will be scared out of your shares. The profit buffer and the reduction of uncertainty gives you confidence. It also contributes to the buy orders to scare short positions out of the market. If everyone does this, the stock becomes more volatile on the rebound and increases risk of profit loss for those engaging in intraday shorting.

However if you are not comfortable with this strategy, I recommend only checking this stock once every Friday and continuing to trust your gut. As long as all the other facts in your thesis stay the same, don't start to second guess your investment decision purely based on intraday price movement. Again, trust your gut and don't let a hit job news article scare you out.

Below is a chart to help explain this dip buy process: