Government Sponsored Enterprise Fannie May.(FNMA:OB)

Fannie Mae was founded in 1938 during the Great depression and today it was a very depressed public listed company.The corporation's purpose is to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities,allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on thrifts.
Fannie Mae is a government-sponsored enterprises (GSEs) are a group of financial services corporations created by the United States Congress. Their function is to enhance the flow of credit to targeted sectors of the economy and to make those segments of the capital market more efficient and transparent. The desired effect of the GSEs is to enhance the availability and reduce the cost of credit to the targeted borrowing sectors: agriculture, home finance and education. The financing of affordable housing for low-income and moderate-income families are the main priority.
In 2000, because of a re-assessment of the housing market by Housing Urban Development, anti-predatory lending rules were put into place that disallowed risky, high-cost loans from being credited toward affordable housing goals. In 2004, these rules were dropped and high-risk loans were again counted toward affordable housing goals
Fannie Mae buys loans from approved mortgage sellers, either for cash or in exchange for a mortgage-backed security that comprises those loans and that, for a fee, carries Fannie Mae's guarantee of timely payment of interest and principal. The mortgage seller may hold that security or sell it. Fannie Mae may also securitize mortgages from its own loan portfolio and sell the resultant mortgage-backed security to investors in the secondary mortgage market, again with a guarantee that the stated principal and interest payments will be timely passed through to the investor.
The White House missed a deadline at the end of January for telling Congress what it wants to do with the two GSEs. That report will be released as early as Friday, people with knowledge of its contents said, but it will present a range of options without stating a preference.

Closing price:$0.72 Turnover:5,685,0776 shares.

February's candlestick is an inverted bullish hammer as todate.It looks like it is slightly burning away and any pullback entry point is best at January's half candlestick body.

Tracking the Dow on Wednesday.09/02/11.(7 market days to index futures expiry)
9:30am:--A wild swing opening with a hangman pattern.Ahead of Fed's chairman testimony before the House Budget Committee on the state of US economy.

10:30am:--Spinning bulls at session high.Asian markets fell broadly overnight as investors there got their first chance to react to the China interest-rate increase.

11:30am:--New morning high with bearish hammer.

12:30noon:--Bearish spin at morning low.Financials were also weak, with J.P. Morgan Chase falling 1.4% after one of the bank's executives apologized for overcharging 4,500 active-duty military members for mortgages and wrongly foreclosing on 18.

1:30pm:--Retracement near the bull pivot resistance line.

2:30pm:--Pullback to new intraday low.Federal Reserve Chairman Ben Bernanke told a congressional committee that the labor market remains sluggish and hecontinues to believe that inflation will remain subdued. WallStreet's reaction to Bernanke's comments was muted.

3:30pm:--Retracing to the MAV resistance line.

4:00pm:--Bullish engulfing breakout ending with a runnaway bull.A late-hour rally in Bank of America shares helped the Dow squeeze out its eighthstraight day of gains.

Another spinning bull in an uptrend market which is still intact except for the intermittent volatilty.7 days before index/options expiry,it is normal to have bad news injected so as to artificially create a rollover high volume contracts.

U.S. stocks ended mixed Wednesday as a late rally pushed the Dow into positive territory at the close after a day tempered by downbeat comments from Fed chief Ben Bernanke.

The economy is improving and so are the company's earnings and valuations.