Annaly Capital Management, Inc. (NYSE:NLY) – Long term reversal only above $11.50

Annaly Capital Management, Inc. (NYSE:NLY) continues its short term rally with another session ending in the green. The gain of 1.21% was accompanied by a volume of 11 million, slightly above the average of 8.4 million, strengthening the bullish momentum in the near future. The stock has not been a great mover and shaker for a long time now, as evident from the narrow range in the 1 year. The current price of $10.87 is just 9% lower than the 52 week high of $11.95 and 5.6% higher than the 52 week low of $10.29. The announcement of a quarterly dividend of Annaly Capital Management, Inc. (NYSE:NLY) has definitely produced a bounce but not really expanded the range. A quarterly dividend of $0.30 will be paid to the investors of record on March 31, 2015, representing an annualized dividend of $1.20 and a $11.31 dividend yield.

Have analyst identified a strong buy signal for NLY?

The year of 2014 saw the stock facing repeated supply pressure from the area around $12, resulting in a sharp crack to $10.70, followed by an equally sharp bounce to $11.60 levels. All these activities clearly show an increased volatility in a narrow range but from a larger perspective, it remains of little value as long as the price stays in the channel as shown on the chart. The channel contains the entire price action since early 2014 and must be broken on the upside to reverse the current downtrend.

NYL

The short term bulls can feel encouraged from the first higher high marked by the last rally as that can be interpreted as the half signal for a near term reversal. The volume has been shrinking for the entire duration of the channelized price action, which could be taken as the lack of any serious distribution. Investors may wait for a breakout above the channel to take an initial position.

About the Author

Sally joined the US Markets Daily News Team in April 2011 as a Multimedia Journalist.

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