Four Healthy Community Banks Worth Watching

This bank has modest overexposure to both C&D and CRE loans, but the pipeline is a healthy 65.5% funded. This bank has been an acquirer of assets from more than one FDIC failure, so it is highly unlikely that this bank will fail. The daily chart shows OZRK overbought and above its 21-day, 50-day and 200-day simple moving averages at $29.36, $29.56 and $28.48, respectively. My weekly value level is $28.21 with monthly and quarterly risky levels at $34.39 and $35.24.

Commerce Bankshares ($38.20) reports quarterly results on Thursday, and analysts expect it to report earnings of 72 cents a share. We rate the stock a Hold (3-Engine) and have a one-year price target at $38.95 (2.0% expected 12-month gain).

CBSH is a member of the KBW Bank Index (BKX), is well within the risk guidelines for exposures to C&D and CRE loans, and its pipeline is a healthy 58.1% funded. The daily chart shows that CBSH has rising momentum and is above its 21-day simple moving average at $37.72, and between its 50-day and 200-day simple moving averages at $38.37 and $38.11.

My weekly value level is $35.58 with semiannual, annual and monthly pivots at $37.45, $38.59 and $38.52, respectively, and quarterly risky level at $41.78.

Webster Financial ($21.65) reports quarterly results before the bell on Friday, and analysts expect earnings of 44 cents per share.

We rate this stock a Buy (4-Engine), with a one-year price target at $23.17 (7.0% expected 12-month gain).

WBS is well within the risk guidelines for exposures to C&D and CRE loans, and the pipeline is a healthy 51.2% funded. The daily chart shows that WBS has overbought momentum and is above its 21-day, 50-day and 200-day simple moving averages at $21.01, $20.82 and $20.56, respectively. My weekly value level is $19.94 with quarterly and monthly risky levels at $22.37 and $23.06. Below is my semiannual value level at $16.08.

I advocate the use of good-'til-cancelled limit orders to add to long positions or become less short on share price weakness to the Value Levels. Traders should enter GTC limit orders to reduce the long positions or to add to a short position on strength to Risky Levels.

At the time of publication, Suttmeier had no positions in stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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