Washington Mutual (Pink: WAMUQ) – what an incredible rocket ride from $.04 to $.0235 a few weeks ago! There have been multiple opportunities to profit on this stock and a multitude of investors have done just that – and more. In the end of May, WAMUQ skyrocketed from the $0.04 to $0.23 range for an estimated 475% gain, banking (pardon the pun) on some excellent court settlement news. The initial excitement has decidedly died down a bit, and in the near future, it will be time to start accumulating for the next gargantuan run this stock is known for. Don’t forget, WAMUQ should have a reorganization plan within the next couple of months, but there will be a confirmation hearing July 5. This means, WAMUQ might be dropping the Q in exchange for a much more satisfactory share price. The chart shows:

• WAMUQ closed down 11.6% today and is about 55% off its recent high of $.235.
• The RSI is tipping down here and there might be a couple more down days, affording cheaper accumulation prices.
• The MACD had a death cross last week that foreshadowed steady selloff until interest is resumed.
• The ADX is about to downwardly cross, which validates the other indicators’ negative suspicions.

The Bottom Line

WAMUQ does not have the best technical indicators at the moment, but to be fair… that is far from surprising after that huge run off incredible news and indicators probably don’t matter much in this case. The truth of the matter is that Washington Mutual was a titan company with incredible earnings before the financial debacle that consumed much of the stock market. A favorable reorganization plan for common stockholders could send this stock to heights that make these recent gains pale in comparison. Pay attention to that 50 day moving average and don’t get stuck chasing this stock because it is hard to get shares when it rallies.

Good Luck,

Ian Decker

Disclosure: No Positions

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