NFI - Oversold?? You betcha

[Karel]

All those wise words came too late for me. I went in almost at the open at 4.95, and am now in the black again

OK, who was smarter?

Regards,

Karel

[skiracer]

It's getting beat down now...I will be jumping back in soon.

I'm going to be watching it closely from here. I thought just maybe that there would be a spike back up at the bottom of that gap but no cigar. It's not real common chart pattern but happens often enough if you know to look for it after those big gaps down.

[mrmarket]

It's getting beat down now...I will be jumping back in soon.

[skiracer]

Well, almost flawless then BTW, why the stop at 4.95? Other people seem to have that as entry point...

Regards,

Karel

Karel,

I wish I had acted on this stock when Ernie first mentioned it. I did look at it's chart and saw the big volume coming in at around 4.90 / 5 levels and liked it's oversold look to provide a bounce. It started it's bounce before I could get in and I missed it. That bounce went to over 7. When it fell and fell farther I thought there was a good chance it would recoup 7 or more on the real oversold equity in the price. That's basically why I made the play yesterday for that value difference in what I thought was oversold and that it had found a bottom yesterday at 5.32 level. I was looking for anything over 6/7 but thought 7 was realistis for the r/r.
I placed the stop at 4.95 for two reasons. The first was that 7% is my stop loss max. and that was right at 4.95. The second was that if you look at the daily chart and at the 4.75 to 5 level on 3/12 to 3/19 or so there was heavy volume coming into the stock and I felt that the top of that range was a good support level for the stop. I would have felt comfortable with the stop at 4.75 even though it was more than my 7% limit but I stuck with the rule and it doesn't matter right anymore now because it opened at 5.01 and I got stopped out in no time at all.
If you were to look at the 15 minute chart right now you would see a big gap down and the candle would be a rather long candle down. At the bottom of that big gap is a key place to enter for a nice long spike back up. I forget the name of the chart pattern but the percentages are good right now for a big spike up. I would jump back in if I see or feel that happening. But that is why I set the stop where I did and why I made the play in the first place. That was a quick $1100.

[Karel]

Hopefully Ernie. I made a mistake on the r/r math. It should be 4.5 to 1 on the r/r instead of 6 to 1. Sorry my mistake in the calculation this morning.

Well, almost flawless then BTW, why the stop at 4.95? Other people seem to have that as entry point...

Regards,

Karel

[skiracer]

Flawless logic...good luck.

Hopefully Ernie. I made a mistake on the r/r math. It should be 4.5 to 1 on the r/r instead of 6 to 1. Sorry my mistake in the calculation this morning.

[mrmarket]

As I stated I think it is way oversold and mostly because of the subprime lending situation. I liked it yesterday at $5.32 because I felt that it had found a bottom. The R/R is pretty good for what I am looking for. I set a stop at $4.95, which is .37 below my entry, and am looking for it to go back over $6 and most likely $7. That would make it an R/R of just over 6 to 1.
The chart doesn't show much technically to the upside but what I really liked was that it went over $7 the last week and then sold off. I'm willing to risk the .37 loss on 3000 shares for the possible gains of $1.68. That's 6 to 1 in my book. But of course it has to do it first but the most I will lose is $1110.00 to gain $5040.00. I liked the way it finished the day yesterday but we'll see what it does today. No play no pay.

Flawless logic...good luck.

[skiracer]

As I stated I think it is way oversold and mostly because of the subprime lending situation. I liked it yesterday at $5.32 because I felt that it had found a bottom. The R/R is pretty good for what I am looking for. I set a stop at $4.95, which is .37 below my entry, and am looking for it to go back over $6 and most likely $7. That would make it an R/R of just over 4.5 to 1.
The chart doesn't show much technically to the upside but what I really liked was that it went over $7 the last week and then sold off. I'm willing to risk the .37 loss on 3000 shares for the possible gains of $1.68. That's 4.5 to 1 in my book. But of course it has to do it first but the most I will lose is $1110.00 to gain $5040.00. I liked the way it finished the day yesterday but we'll see what it does today. No play no pay.

[IIC]

Why do you expect the fiasco to be limited to subprime loans? Can't any loans, even ones rated AAA double-plus good go into default if the borrower goes broke or just decides to quit making payments?

I think the riskier bets are the GS and other giants that have yet to show signs of the "fiasco". At least with NFI, even if it does go belly up next year, you can still expect $4-5 in dividends from last year out of them first. And there's always the chance they get scooped up by GS or Bear Stearns for a few bucks more, too. Let the big boys eat the big losses... if they indeed happen. I'm still hoping the helicopters show up with all the cash to bail us out of this pickle, and keep the party going for a few more years.

C'mon Ben, sometimes inflation is a good thing!

Oh...subprime is just the start...Next comes Alt-A.

You know who I think is a good short over the next two years?...WFC...They are at 34.68 now...You just wait...they bury these loans so far down in their financials that nobody ever sees them until it all comes out...Save this post and let me know where they stand on March 26, 2009.

[jiesen]

Subprime fiasco has just started...NFI is toast along with the rest of 'em IMO

Why do you expect the fiasco to be limited to subprime loans? Can't any loans, even ones rated AAA double-plus good go into default if the borrower goes broke or just decides to quit making payments?

I think the riskier bets are the GS and other giants that have yet to show signs of the "fiasco". At least with NFI, even if it does go belly up next year, you can still expect $4-5 in dividends from last year out of them first. And there's always the chance they get scooped up by GS or Bear Stearns for a few bucks more, too. Let the big boys eat the big losses... if they indeed happen. I'm still hoping the helicopters show up with all the cash to bail us out of this pickle, and keep the party going for a few more years.

C'mon Ben, sometimes inflation is a good thing!

[IIC]

I really think it is pretty much oversold and will eventually get back to a much higher level once this subprime lending hysteria gets straightened out. There will be some carnage but this is cheap to me. I'll give it to $4.95 and I would exit at -7% max. I like it to go over 7/8 or more but would take anything over 6 or recent highs.

Subprime fiasco has just started...NFI is toast along with the rest of 'em IMO

[spikefader]

..a quarterly close below 4.20 and it's a burnt toast candidate.

No change to this observation. Technically, that would be extremely bearish long-term. Dead cat bounce to 15.00 always possible, NB. But sometimes they just keep falling..... Good luck all.

[skiracer]

Good luck Ski...I may join you tomorrow. Boy..daytrading is scary!

I really think it is pretty much oversold and will eventually get back to a much higher level once this subprime lending hysteria gets straightened out. There will be some carnage but this is cheap to me. I'll give it to $4.95 and I would exit at -7% max. I like it to go over 7/8 or more but would take anything over 6 or recent highs.

[mrmarket]

Good luck Ski...I may join you tomorrow. Boy..daytrading is scary!

[skiracer]

I'm in at $5.32.