Sometimes opportunities present themselves outside of technical analysis. Chimera is a Real Estate Investment Trust (REIT) that is wholly-owned subsidiary of Annaly Capital Management NLY. Being a REIT, CIM benefits from taxation cuts and thus payout 90% of earnings by law in the form of dividends. This translates into a 13.20% dividend yield. As of 12/31/12 CIM announced a GAAP book value per share of $3.31. Last dividend was on 10/29/12 for $.09 a share.
Looking from a technical perspective CIM looks good for added capital appreciation on top of the great dividend yield.
Price recently broke out of a range bound area between $2.40 and $2.70 on the daily chart.
A Friday close over $2.75 is very bullish on the weekly and we could head to $3.00-$3.20 area, representing an 8% increase if price reaches the lower target. Suggestion; Set a very liberal stop loss possibly around $2.30-$2.20 area, sit back, and collect the dividends.
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