Four 'Too Big to Fail' Regional Banks Are Above 200-day SMA

NEW YORK (TheStreet) -- I have been warning about the risk of reversion to the mean and in my first post today I showed how 11 components of the Dow Industrial Average have either held their 200-day simple moving averages on weakness, or are now trading below its 200-day SMA.

In this post I show that only one of the 24 members of the regional banking index is below its 200-day SMA. Others have been declining towards these key levels as key supports after failing to hold their 50-day SMAs.

All 24 regional banks are overvalued with seven overvalued by more than 20%. All have hold ratings according to www.ValuEngine.com . Only one is slightly lower over the last 12 months while 11 are up between 21.1% and 56.1%. Only one is below its 200-day SMA. 22 of 24 are below their 50-day SMAs which indicate risk to the 200-day SMAs reflecting the continued risk of reversion to the mean.

Reading the Table

OV/UN Valued: 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.

Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.

Value Level: Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual.

Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.

Risky Level: Price at which to enter a GTC limit order to sell on strength.

Bank of America ( BAC) ($13.84) set its multi-year high at $15.03 on July 23. The 200-day SMA is $12.97 with the 50-day at $14.39.

BB&T ( BBT) ($32.76) set its multi-year high at $36.59 on Aug. 5 and is now below its 50-day SMA at $34.65 with the 200-day SMA a tight support at $32.48.

Citigroup ( C) ($47.95) set its multi-year high at $53.56 on May 30 and is now below its 50-day SMA at $50.09 with the 200-day SMA a tight support at $47.29.

Capital One ( COF) ($68.10) set its multi-year high at $70.49 on Oct. 4. This bank is just above its 50-day SMA at $67.69 with the 200-day way down at $61.09.

Fifth Third Bank ( FITB) ($17.75) set its multi-year high at $19.79 on July 24. This bank has been below its 50-day SMA at $18.63 since Aug. 27 and is just above its 200-day SMA at $17.43.

Huntington Bancshares ( HBAN) ($8.12) set a multi-year high at $8.78 on Aug. 1. This bank has been below its 50-day SMA at $8.45 since Sept. 19 with the 200-day SMA a support at $7.66.

JPMorgan ( JPM) ($50.75) set a multi-year high at $56.93 and July 24 and has been below its 50-day SMA at $52.75 since Aug. 14. This biggest of the four 'too big to fail' banks is on the cusp of its 200-day SMA at $50.74.

M&T Bank ( MTB) ($110.63) set its multi-year high at $119.54 on July 18 and has been below its 50-day SMA at $114.51 since Aug. 27. The 200-day is a key support at $107.40.

Northern Trust ( NTRS) ($52.94) set its multi-year high at $62.00 on July 16 and has been below its 50-day SMA at $55.82 Aug. 5. This bank has been below its 200-day SMA at $55.25 since Sept. 27.

PNC Financial ( PNC) ($70.87) set a multi-year high at $77.93 on Aug. 2 and has been below its 50-day SMA at $73.95 on Aug. 26. The 200-day is a key support at $68.97.

Suntrust Banks ( STI) ($32.27) set its multi-year high at $36.29 on July 19 and has been below the 50-day SMA at $33.52 since Aug. 27 except for one day, Sept. 18. The 200-day SMA is a key support at $30.97.

US Bancorp ( USB) ($35.96) set a multi-year high at $38.23 on Sept. 18 and has been below the 50-day SMA at $36.86 since Sept. 24. The 200-day SMA is a key support at $34.96.

Wells Fargo ( WFC) ($40.36) set a multi-year high at $44.78 on July 23 and has been below the 50-day SMA at $42.28 since Sept. 20. The 200-day SMA is a key support at $39.11.

At the time of publication the author held no positions in any of the stocks mentioned.

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

Richard Suttmeier is the chief market strategist at AlphaPlus Analytics in addition to ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world.

Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary.

Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV.

Click here for details on Suttmeier's "Buy and Trade" investment strategy.

Richard Suttmeier can be reached at RSuttmeier@Gmail.com

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