NFI - Oversold?? You betcha

[spikefader]

NFI has lost the impulsive pattern, which should be encouraging fer bulls. I'm expecting a test of 6.85 resistance now.

[New-born baby]

This looks to have stabilized a bit as the tug of war between fear and greed has reached a temporary stalemate.

I don't know which of these subprime lenders will ultimately survive the carnage. But one thing is for certain..as long as there are humans on this earth, there will be humans with bad credit looking for money and there will always be other humans looking to lend it to them at high interest rates. This industry will survive and thrive.

18 months from now, one of these companies will be a 10 bagger. Mark this down.

I like NFI. Yup. I do.
I think the MM man has it right: a ten bagger.

[jiesen]

and it sure would be nice if that 10-bagger happens to be NFI!

[mrmarket]

This looks to have stabilized a bit as the tug of war between fear and greed has reached a temporary stalemate.

I don't know which of these subprime lenders will ultimately survive the carnage. But one thing is for certain..as long as there are humans on this earth, there will be humans with bad credit looking for money and there will always be other humans looking to lend it to them at high interest rates. This industry will survive and thrive.

18 months from now, one of these companies will be a 10 bagger. Mark this down.

[jiesen]

securitizing loans - what does it mean?

Here's an example from one they did a month ago:

http://biz.yahoo.com/bw/070228/20070228005909.html?.v=1

NovaStar Closes $1.9 Billion Asset Backed Securitization
Wednesday February 28, 2:22 pm ET


KANSAS CITY, Mo.--(BUSINESS WIRE)--NovaStar Financial, Inc. (NYSE:NFINews), a residential mortgage lender and portfolio investor, announced today that its subsidiary, NovaStar Mortgage, Inc., securitized $1.9 billion of non-conforming mortgage assets. The transaction will be treated as a financing for GAAP reporting purposes and as a sale for tax purposes. The assets and accompanying debt will remain on the balance sheet of NovaStar Financial's taxable REIT subsidiary.

- Lead managers Deutsche Bank Securities, RBS Greenwich Capital and Wachovia Securities underwrote NovaStar Mortgage Funding Trust, Series 2007-1, which closed February 28, 2007. The transaction was structured into 17 rated classes of certificates with a face value of $1,845,384,000.
NovaStar will initially retain the M-6 through M-11 certificates, which represent $106.7 million in principal. The M-10 and M-11 certificates were not covered by the prospectus. Ratings for the certificates retained by NovaStar are as follows:
...


so in a way, they turn debts into assets. what could possibly go wrong?

[jiesen]

What does that mean???

when they package the loans they sell. Many of NFI's announcements go like this:

NFI securitizes (sells) $1B of loans.

it's what they do.

[IIC]

if they securitize.

What does that mean???

[jiesen]

posting from IV's NFI board

Here's a great post in response to Cramer's NFI bashing today:

http://www.investorvillage.com/smbd.asp?mb=4148&pt=msg&mid=1815697

By: objectiveguy111 Posted as a reply to msg 56013 by oldmanknows
Re: Cramer bashes Novastar again

What is NovaStar supposed to say? Provide a daily update on liquidity?

I'm no fan of NovaStar IR. They are subpar at best in constructing press releases.

They aren't dummies, however. The more you say, the more for which you may be sued. They put out quarterly earnings releases and short blurbs if they securitize. They let the facts speak for themselves in monthly production reports and bond investor reports.

You can talk yourself into a lot of trouble. Ask Impac, in 2004. Ask New Century, today.

Jim Cramer could learn from NovaStar when it comes to keeping his bluster to a minimum. Does NovaStar have YouTube videos circulating about it breaking federal securities laws?

Stop throwing stones when you live in a very unattractive glass house, Jimbo. Boo-yuck.

[jiesen]

Volume dropped off the table today. No volume

maybe they're waiting this time for that 400k spike in volume that happens just before noon every day this week so far.

who's doing that? will they stop it?

[New-born baby]

Volume dropped off the table today. No volume

[skiracer]

Great chart Spike. Thanks for posting it. When the charts get gappy I start to get a little frustrated with my wave counts. Your count puts it into a better perspective for seeing the plays to either side if they develope. Nice chart and thanks. I would be suseptible to making that play on the 2nd wave up here. Might get 5.50/6 out of it from here.

[spikefader]

Spike,
Would you care to put up a chart on NFI showing entry, targets, etc?

Sure thing, NB. Here's the count that I've got for it. I'd be lookin' to short into any strength from here (the 2 up) to the 5.80 to 6.00 zone, to risk a stop above the blue C. The target is 5 more waves down.....or even a medium-term hold for the ride to zip.

Now, for bulls, here's what I want to see to get bullish on it: a bullish rally above the blue C, for a new 1 up.....then a 2 down to buy into, to risk a stop under the C to target gap fill 17.00ish. Brilliant r/r should that setup present itself.

Either way, there's a setup for NFI. And the setup to trade will depend on the price action it offers. Remember the golden and simple observation that resistance is resistance until it isn't. Like I said while the C was forming, that C is the pivotal and crucial area. Bias should be alloted depending on where price is relative to that C. Personally, I think buying with current TA is a bad idea. Alternatively, should price get above C, I think shorting is a bad idea.

[spikefader]

Your take is as good as anyone's Spike. What makes me anxious on either side with this stock is that over the last few days it has not been able to show a trend to either side. It has kind of been knocking at the door on either side but no able to open it either way. It looks to me as it may have stalled out to the downside right here. I traded it the other day just on a hunch that I thought it was way oversold and had found a bottom. A pretty wide trading range today again. I would be open to a short play if it breaks that 4.75/4.80 range like the other day but it stopped right there and recouped. It would be easy for me to chase it being that it has me for $1100 from my trade the other day but I think it is to dangerous either way right now and I won't chase it.

Yer hunch on the stalled nature was pretty close t' the mark I think ski...and you were prolly just a bit early. You're a nimble trader from what I've witnessed o'er the years and well capable to snag the profit of a 2 up fer NFI......and maybe some green hope sees the count fail and bullish rocket from fuzzy C resistance failure and run to gap fills. I'd never presume to know that a count is going to happen or not....I've just made it a rule to respect a count until it's broken, but that's just me. Is the current 1 down over? We will see soon enough. I think the end of this month/quarter will provide some good technical info for long-term investors. I sure wouldn't be holding this one long overnight at this stage.

[New-born baby]

Spike,
Would you care to put up a chart on NFI showing entry, targets, etc?

[skiracer]

One could argue that impulsive price action is expressed through increased volatility.....perhaps increasing the reliability of wave counts.

It's been tracking a perfect bearish count since December....including the last 5 bearish days. The count calls for 2 up soon, and today's intraday price action forming an 'inside' day on the daily may be the catalyst for that impulsive 2 up. But frankly, the r/r isn't good enough to try and trade it. Long from current levels and stop under the inside day is over 5% risk....and 2 completion target of around $5.90 price resistance is 19%.....so r/r of 4. Some might think that's pretty good.

But is there any particular reason why the bearish count should suddenly terminate? And if not, then why not look to capture a short entry 2 completion to target 5 down? That's a lot better r/r.

Your take is as good as anyone's Spike. What makes me anxious on either side with this stock is that over the last few days it has not been able to show a trend to either side. It has kind of been knocking at the door on either side but no able to open it either way. It looks to me as it may have stalled out to the downside right here. I traded it the other day just on a hunch that I thought it was way oversold and had found a bottom. A pretty wide trading range today again. I would be open to a short play if it breaks that 4.75/4.80 range like the other day but it stopped right there and recouped. It would be easy for me to chase it being that it has me for $1100 from my trade the other day but I think it is to dangerous either way right now and I won't chase it.