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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (9196)	3/26/2008 11:24:46 PM
From: Hawkmoon	Read Replies (3) \| Respond to of 33421

Hey John (thread).. Hope you can help me out with analyzing Etrade: Message 24443328 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 E*Trade'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