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American Capital Agency Corp. Message Board

  • reits_r_us reits_r_us Nov 25, 2012 11:05 PM Flag

    All Quiet on the Western Front...;-)

    Turkey still hasn't worn off? Thought I would give you some Holiday Cheer by showing us what Fibonacci has to say about the possible retracement of AGNC from the pre-EX high on Sept 17th of 36.77 to that incredible low of 28.08 on Nov 15th(who said BATESAT?)

    The numbers in order are 30.13, 31.39, 32.42, 33.45, and 36.77. Those correspond to 23.6%, 38.2%, 50%, 61.8% and 100% retracement. We have already retraced through the first two. The next stop is 32.42, which is the 50% way point between the high and the low.

    Those not familiar with Fibonacci numbers and how they relate to TA, just Google it and you will get more than you a three sentence summary it was observed that certain patterns occur in nature that follow a sequence. This sequence is found in myriad examples from nature from the pattern of seeds in a Sunflower to the spiral pattern of sea shells to the vortex pattern of a hurricane. Our purpose- it often is seen in the pattern of stock retracements.

    I am looking for the third number in the sequence(32.42) soon. All the TA items are lined up with Stochastics, MACD, RSI(49.73) rising and the PPS right on the heels of the 28 day MA(31.67).

    Time for all of you waiting on the sidelines to get in, as AGNC is still on sale. At a conservative 34 by EX you will get almost two dividends(2.34) from here to the day B4 EX. For those long term holders wanting to add, or get back in, it will be the 2.34 + the 1.25 dividend or 3.59/share going forward.

    That will be a very Merry Christmas for all longs!!

    Good trading!!


    Sentiment: Strong Buy

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    • Doc -
      Is there a time factor involved with Fibonacci? For Dec EX, if the curve is symmetrical up and down, we would not have time to complete all of the retracement, would we?

      • 1 Reply to jess_1554
      • Hey Jess,

        I am not an expert on Fibonacci. My understanding of it is that investors "like" certain values. Those percentages I listed are those values commonly seen once a bottom(support) or top(resistance) has been found. It is not based so much on time, in that the time to the bottom, may or may not be the time to the next top.

        Since we had an 8.70 loss since the high in Sept, the next resistance should be(Fibonacci) 50% of that or 4.35 added to the low of about 28.08(?) so 32.43. The theory goes that if we sail through last support the retracement down to the next support will be in Fibonacci steps of support and resistance also. How quickly that occurs is driven by externals. How the public reacts to those externals follows the sequence.

        Whether this has merit or not, I believe that is the rudimentary gist of Fibonacci market sequences. Others more knowledgeable than myself are welcome to expand upon or correct my thinking.

        I am hoping for that 100% retracement before EX....;-)

        Good luck!


        Sentiment: Strong Buy

    • Hey Doc,
      Any thoughts on the old chestnut 'gaps get filled'?

      Sentiment: Hold

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