The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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From: Hawkmoon	3/26/2008 10:44:40 PM
	Read Replies (1) of 306849

What's the thread's opinion on Etrade (EFTC)? Have a friend of mine who asked me about it today and she was thinking about making a speculative buy in the shares. All I knew was that they had been crushed due to their exposure to mortgage backed securities so my first response was to advise against it until I'd had a chance to review the chart and the fundamentals.. Well... I have to admit the chart DOES look interesting: bigcharts.marketwatch.com There is a bollinger band pinch, which suggests a major move in one direction or another direction is forthcoming in a few weeks. The Stochastics have also turned upward and MACD is positive. HOWEVER, short interest has increased to 104 million shares indicating a potential bear raid is possible: reuters.com And where this REALLY applies to the thread topic, it appears that 72% of EFTC's assets are Mortgage Backed Securities: Last Friday's 10-Q shows that, at current estimates of fair value, 72% of ETrade's $16.6 billion in available-for-sale securities are mortgage-backed.)* fool.com Furthermore, they have lost several of their officers to resignation (a positive?).. So my question is.. from looking at the chart, the stock has room to move up to $10/share (major resistance that would fill the gap down) or back down to $2/share (the lower arm of the Bollinger Band). So.. does anyone think that EFTC is "too big to fail" (given $16 billion in mortgage backed securities), or is there a white knight out there looking to support their portfolio of supposedly "AAA" rated securities? Would appreciate any opinions.. Hawk

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