The last time I profiled these banks was on Sept. 26 in Don't Bank on Bank Stocks, Just Trade Them and since then the BKX moved up to a potential double top at $52.04 on Oct. 5 vs. its 2012 high of $52.11 on Sept 14.
The sideways-to-down pattern since Oct. 5 has created negative technical divergences on both daily and weekly charts for several members of the BKX and for the BKX as an index. The BKX made significant gains of 52.3% since bottoming in October 2011, and is up 25.9% year to date.
Fundamentally www.ValuEngine.com shows the Finance sector 11.3% overvalued.The weekly chart for the BKX ended last week with declining momentum (12x3x3 weekly slow stochastic) reading of 78.28 down from 81.98 the prior week. This decline under 80 on a scale of 0 to 100 is a negative divergence. Last Friday's close at 49.25 was just below the five-week modified moving average at 49.50. This is a technical negative and a symptom of "QE Fatigue." Chart Courtesy of Thomson/Reuters The daily chart for the BKX (49.60) shows declining momentum with the BKX below its 21-day simple moving average at 50.33, is just above its 50-day SMA at 49.56 and is above its 200-day SMA at 46.76. My quarterly and annual value levels are 47.55 and 42.98 with monthly and weekly risky levels at 51.11 and 53.04.
The above table shows data from www.ValuEngine.com covering nine stocks in the BKX.
Reading the Table OV/UN Valued: The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine. VE Rating: A "1-Engine" rating is a Strong Sell, a "2-Engine" rating is a Sell, a "3-Engine" rating is a Hold, a "4-Engine" rating is a Buy and a "5-Engine" rating is a Strong Buy. Last 12-Month Return (%): Stocks with a Red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV