ETrade Falls 50% Today

Nov 12, 2007: 11:48 AM CST

E*Trade Financial Corporation (ETFC) plummeted 50% today after it reported that “deterioration in the value of its mortgage-backed securities has fallen significantly.”

The stock had been in a recent downtrend on the daily charts (since August, 2007) and a fresh downtrend after a lengthy consolidation period on the weekly charts.

From a 2007 high of $26, the stock has now fallen roughly 86% to $4.

I am posting the weekly chart below:

As goes the old adage in technical analysis, the longer the consolidation period, the longer the eventual breakout.

How many people could have conceived that a major broker, and popular trading household name, could have such a massive decline in one year?

13 Comments

13 Responses to “ETrade Falls 50% Today”

  1. Jesse Says:

    Is this irrational fear or justified by the mortgage market meltdown: http://fishtrain.com/2007/11/12/etrade/

  2. Corey Rosenbloom Says:

    Jesse,

    It’s probably gone too far to be deemed solely ‘irrational fear,’ but I don’t think current prices are justified fundamentally either. Prices aren’t as efficient as academics would like us to believe. It could also be synonymous with “throw the baby out with the bathwater” syndrome.

    Good post in the link you listed, by the way. Thanks.

  3. muckdog Says:

    Some folks like to buy stocks when they hit the lower bollinger band. Look at what E-Trade has done. Taken the bollinger band and driven it down!

    Articles coming out telling folks not to worry about their money in E-Trade. But you know they will. Interesting future for the company.

  4. jenn Says:

    yea you wouldnt expect such a popular broker to have such a big decline in a year.. ive been getting GREAT picks and advice from hototc.com

    they offer me the best advice and picks so far from all the newsletters i subscribed to.. i recommend you try subscibing to their newsletter~

  5. Corey Rosenbloom Says:

    Muckdog,

    Exactly. It’s also not a ‘buy the dip’ style or ‘bottom fishing’ style either. Folks should identify the trend and respect it and trade with it to the best of their ability.

    I’m not sure what I would do in that situation. Well, I actually would probably be withdrawing a majority if not all of it as well. Certain funds are not FDIC approved so one must ask is it worth the risk of literally losing everything should the firm declare bankruptcy? I’m sure the worst scenario would never occur but still. I would rather be safe personally. It’s an extremely difficult decision, to say the least.

  6. Aaron Says:

    ETFC looked as if it was in a good spot as recently as about 6 or 8 months ago. The company looked as if it had everything together. Oh how quickly things can change.

  7. etradedownfall Says:

    I am so happy eventually E*TRADE is making a stead decline and will be obsolete. This company is no good and their supervisor are really stupid.

  8. etradedownfall Says:

    E*TRADE treats their employees so badly and they cheat their customers. Do not think for a moment they are an honest company.

  9. etradedownfall Says:

    I am so happy eventually E*TRADE is making a stead decline and will be obsolete. This company is no good and their supervisor are really stupid.

  10. etradedownfall Says:

    E*TRADE treats their employees so badly and they cheat their customers. Do not think for a moment they are an honest company.

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