
SunTrust, U.S. Bancorp Are the Regional Banks to Buy
Regional banks should be center stage when it comes to funding small businesses and lending in the housing market on Main Street, USA. FDIC data presented on Tuesday suggest that lending remains below par and that new challenges are evident.
BB&T Corp (BBT) - Get Report , M&T Bank (MTB) - Get Report and PNC Financial (PNC) - Get Report are in correction territory and are below price gaps to their Dec. 31 lows. SunTrust (STI) - Get Report and U.S. Bancorp (USB) - Get Report have outperformed and filled the price gaps to their Dec. 31 lows.
All five have positive weekly charts so today's focus is on the Fibonacci Retracements from their multiyear highs to their Feb. 11 lows.
This week investors learned that Fed Chair Janet Yellen remains reluctant to raise rates and the reason this time is the weaker than expected employment report for May released last Friday. Keeping rates low keeps net interest margins low hurting profitability in the banking system.
The FDIC is concerned that some bankers have stretched for yields including making loans to oil and gas producers. Some of these loans have become noncurrent resulting in the first increase in reserves for losses just as the credit crunch appeared to have stabilized.
Here's a scorecard for the five regional banks.
Here's the daily for BB&T Corp.
Courtesy of MetaStock Xenith
BB&T had a close of $36.62 on Tuesday down 3.1% year to date and in correction territory 12.6% below its multiyear high of $41.90 set on July 23, 2015. The stock is up 22.3% from its 2016 low of $29.95 set on Feb. 11.
The daily chart shows the Fibonacci retracements from the July 23 high to the Feb.11 low. The stock rebounded to its 38.2% retracement of $34.52 first on March 4. By April 7 the stock was back down to its 23.6% retracement of $32.77. The rally since then reached its 50% retracement of $35.93 on April 26. After dipping to $33.01 on May 13 the stock rallied to as high as $37.01 on June 6.
Today the stock is below its 61.8% retracement of $37.33 and is below its price gap to its Dec. 31 low of $37.74. The stock is above its 50% retracement of $35.93 and its 200-day simple moving average of $35.38.
Investors looking to buy the stock should consider doing so on weakness to $34.23 and $32.71, which are key levels on technical charts until the end of June and the end of 2016, respectively.
Investors looking to reduce holdings should consider selling strength to $39.01, which is a key level on technical charts until the end of June.
Here's the daily chart for M&T Bank Corp.
Courtesy of MetaStock Xenith
M&T Bank had a close of $118.49 on Tuesday down 2.2% year to date and in correction territory 11.6% below its multiyear high of $134.00 set on July 23, 2015. The stock is up 18.4% from its 2016 low of $100.08 set on Feb. 11.
The daily chart shows the Fibonacci retracements from the July 23 high to the Feb.11 low. The stock rebounded to its 38.2% retracement of $113.04 first on March 18. By April 7 the stock was back down to its 23.6% retracement of $108.08. The rally since then reached its 50% retracement of $117.04 on April 14, then to the 61.8% retracement of $121.04 on April 20. After dipping to $112.41 on May 17 holding the 38.2% retracement then rallied to as high as $120.65 on June 6.
Today the stock is below its 61.8% retracement of $121.04 and is below its price gap to its Dec. 31 low of $121.18. The stock is above its 50% retracement of $117.04 and its 200-day simple moving average of $116.04.
Investors looking to buy the stock should consider doing so on weakness to $111.89, which is a key level on technical charts until the end of 2016.
Investors looking to reduce holdings should consider selling strength to $120.93, which is a key level on technical charts until the end of June.
Here's the daily chart for PNC Financial.
Courtesy of MetaStock Xenith
PNC Financial had a close of $89.10 on Tuesday down 6.5% year to date and in correction territory 11.4% below its multiyear high of $100.52 set on July 23, 2015. The stock is up 14.7% from its 2016 low of $77.67 set on Feb. 11.
The daily chart shows the Fibonacci retracements from the July 23 high to the Feb.11 low. The stock rebounded to its 38.2% retracement of $86.40 first on March 3. By April 5 the stock was back down to its 23.6% retracement of $83.06. The rally since then reached its 50% retracement of $89.10 on April 27. The 2016 high was $90.85 on May 25.
Today the stock is below its 61.8% retracement of $91.79 and well below its price gap to its Dec. 31 low of $95.20. The stock is above its 50% retracement of $89.10 and its 200-day simple moving average of $88.57.
Investors looking to buy the stock should consider doing so on weakness to $76.11, which is a key level on technical charts until the end of 2016.
Investors looking to reduce holdings should consider selling strength to $92.64 and $96.89, which are key levels on technical charts until the end of June.
Here's the daily chart for SunTrust.
Courtesy of MetaStock Xenith
SunTrust had a close of $43.40 on Tuesday up 1.3% year to date and 5.3% below its multiyear high of $45.84 set on July 17, 2015. The stock is up 39.7% from its 2016 low of $31.07 set on Feb. 11.
The daily chart shows the Fibonacci retracements from the July 17, 2015 high to the Feb.11 low. The stock rebounded to its 38.2% retracement of $36.72 first on March 4. By April 13 the stock was up to its 50% retracement of $38.46. Then by April 22 was above its 61.8% retracement of $40.20. The 2016 high was $44.32 set on May 25.
Today the stock is above its 61.8% retracement of $40.20 and above its price gap to its Dec. 31 low of $42.83.
Investors looking to buy the stock should consider doing so on weakness to $42.43 and $39.62, which are key levels on technical charts until the end of June.
Investors looking to reduce holdings should consider selling strength to $46.68, which is another key levels on technical charts until the end of June.
Here's the daily chart for U.S. Bancorp.
Courtesy of MetaStock Xenith
U.S. Bancorp had a close of $42.66 on Tuesday flat year to date and 7.8% below its multiyear high of $46.26 set on July 16, 2015. The stock is up 15.1% from its 2016 low of $37.07 set on Feb. 11.
The daily chart shows the Fibonacci retracements from the July 16, 2015 high to the Feb.11 low. The stock rebounded to its 38.2% retracement of $40.59 first on Feb, 17, then dipped to its 23.6% retracement of $39.24 on Feb. 19. After trading in a choppy pattern around these two retracements, this stock reached its 50% retracement of $41.67 on April 19 then up to its 61.8% retracement of $42.76 on April 20. After setting its 2016 high of $43.94 on April 27 the stock retested its 38.2% retracement of $40.59.
Today the stock is just below its 61.8% retracement of $40.76 and a penny above its price gap to its Dec. 31 low of $42.65.
Investors looking to buy the stock should consider doing so on weakness to $35.85, which is a key level on technical charts until the end of 2016.
The $42.04 and $42.60 are magnets until the end of June.
Investors looking to reduce holdings should consider selling strength to $47.29, which is another key levels on technical charts until the end of June.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.















