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5 Banks to Buy After JPMorgan's Big Mistake

Prosperity Bancshares

Prosperity Bancshares (PB - Get Report) is another name that's forming an ascending triangle right now -- albeit in a shorter-timeframe. PB's ascending triangle has been forming since the start of March, with the resistance level to watch coming in at $47.

It's important to remember that ascending triangles don't work just because triangles are easy shapes to draw on a chart. Instead, it's not the triangle itself, but rather the technical forces that cause the triangle that investors should be focused on. Horizontal resistance is caused by a glut of supply of shares at that $47 level; in other words, it's a price where sellers have historically been more eager to sell and take gains than buyers were to buy. At the same time, uptrending support indicates that buyers are accumulating shares at higher levels.

>>10 Bank Stock Buys From a Deep Data Dive

A breakout above resistance is a buy signal because it means that buying pressure has absorbed the excess supply at that price. Without the overhead stumbling block of resistance at $47, being long suddenly becomes a high-probability trade. Until then, though, it's not; that's why it's important to wait for the breakout before buying.

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SYM TRADE IT LAST %CHG
BAP $149.16 0.00%
FULT $12.26 0.00%
JPM $62.84 0.00%
PB $52.22 0.00%
WFC $54.05 0.00%

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