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Is AFAM showing a sell signal II ?

Last Friday AFAM has touched its 50 MA average on high volume. It started dropping as a rock and it was scary move. I mentioned that this move would be a correction only if the stock bounces back on high volume and it would be a good opportunity to add more shares to the existing positions. The stock did it today. It gapped up on huge volume. See the chart.

AFAM

The question is however whether this move is enough to consider additional position in this stock. The market responded to crazy news about the Government bailing out Freddie Mac (FRE) and Fannie Mae (FNM). Was the entire market running up like a bull just to crash tomorrow? Since the market is in correction and today’s move cannot be considered as reasonable (almost all stocks jumped up just because of the above mentioned information) I would recommend further confirmation on AFAM’s move. If the price will continue up on rising volume tomorrow it would be a signal for adding another position.





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