Prior to this initial price surge, the White house released comments about their intentions to deliver a solution to the GSE reform (Re-privatizing Freddie & Fannie). Both Mortgage giants have been forwarding their profits to the U.S. Treasury and delivering handsome returns since 2008, after they were bailed out by the U.S. Government during the crisis. Now, investors/traders are banking on Freddie Mac & Fannie Mae being released from conservatorship and once again delivering profits to shareholders. Could be an extremely lucrative opportunity if the White House follows through on behalf of shareholders!
Not 100% certain of my EW count, but clearly FMCC has established an uptrend with significant and sustaining volume as OBV has leveled off since the breakout.
Looks to me like a 5 wave impulse movement followed by something along the lines of a running triangle correction, ultimately taking the shape of a bull flag.
COINCIDENTALLY: The apex of this triangle just so happens to fall on Freddie Mac's earnings date.
End of day trading suggests buyers were looking to sneak in positions before earnings are announced, as the OBV broke out of its upper diagonal resistance, possibly alluding to expectations of a positive forecast.
(I am still delving into the fundamentals of EW theory, so I am not yet confident in my count. However, I figured I might as well play around with it now and tweak it as necessary moving forward.)