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JPMorgan, Wells Fargo Among Regional Banks That Are Vulnerable

NEW YORK (TheStreet) - At the beginning of July all 24 components of the KBW Banking Index had positive weekly chart profiles. Five had overbought 12x3xx3 weekly slow stochastic readings and 19 had rising stochastics. These readings can be found in my first "crunching the numbers" published on July 7.

BB&T Bank (BBT) was the only bank to miss earnings per share estimates. This bank reported on July 21 and missed by 5 cents. This stock was up 7.1% year to date on July 3 and is down 7.4% since then.

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Regions Financial (RF) and Wells Fargo (WFC - Get Report) were the only banks to match analysts EPS estimates. Regions Financial was up 9.9% year to date and is down 6.7% since then. Wells Fargo was the biggest year to date gainer on July 3, up 17% and is down 4% since then.

The largest earnings beat was posted by Capital One (COF) by 27 cents. Capital One had a year to date gain of 11% on July 3 and is down 6.4% since then.

Better-that-expected earnings from regional banks was anticipated as 18 of 24 set their July highs by July 16.

In today's first "crunching the numbers" table 15 show declining 12x3x3 weekly slow stochastics, five are overbought and four have rising stochastics.

On July 3 I showed that all 24 banks were above their five-week modified moving averages. Today 15 are below their five-week modified moving averages.

Only five banks are higher than their July 3 closes. The best gainers are Northern Trust (NTRS) up 3.1% and Bank of New York (BK) up 2.9%.

The biggest losers since July 3 are PNC Financial (PNC) down 8.2% and BB&T down 7.4%.

In my July 7 post, "Wells Fargo, PNC Financial Lead 24 Banks in the KBW Banking Index" I warned that earnings from regional banks may disappoint based upon data from the FDIC.

Read More: 4 Stocks Warren Buffett Is Selling in 2014

On June 4 I wrote, "Bank Stocks Have Staged a Nice Rebound, but Don't Expect It to Last". In this post I mentioned that the FDIC Quarterly Banking Profile for the first quarter showed a decline in earnings do to reduced noninterest income such as a slower decline in reserves for losses and lower asset sales.

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