Shares of Wachovia (WB: sentiment, chart, options) are trading lower again today, after Friedman, Billings & Ramsey (FBR) resumed coverage of the shares with an "underperform" rating and a $12 price target. At last check, WB was off about 1.5% at $14.67 per share, extending its year-to-date loss to more than 60%. According to FBR, "Wachovia's outsized exposure to residential real estate and, more specifically, its California option adjustable-rate mortgages (option ARMs), should result in higher credit costs than the Street anticipates, which should drive earnings and valuation lower over the next 12 months."

The brokerage attention comes the day after The Wall Street Journal reported that the company was selling $40 million in land and construction loans. WB rallied more than 4% yesterday on the news.

Technically, WB is being squeezed between resistance at its declining 10-week moving average and short-term support in the 14 region. Meanwhile, sentiment is extrememly bearish, with the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.95 arriving at an annual peak, more than 13% of its float sold short, and 12 of the 14 analysts following WB rating it a "hold" or worse. While this pessimism is par for the course, any positive developments for the company could provide another spike similar to Wednesday's rally.