Editors' pick: Originally published Feb. 11.

Ready to make a withdrawal from bank stocks?

Look overseas: Central banks are cutting benchmark rates deeper below zero. The European Central Bank cut rates another notch below zero, and investors started rushing to the exits. 

The four U.S. "too big to fail" banks have taken their hits, trading at new 2016 lows in the pre-market on Thursday. These banking giants control 43% of all financial assets under the watchful eyes of the Federal Deposit Insurance Corporation.

The bigger banks were supposed to rise and shine this year after the Federal Reserve raised interest rates. However, Bank of America (BAC - Get Report) , Citigroup (C - Get Report) , JPMorgan Chase  (JPM - Get Report) and Wells Fargo (WFC - Get Report) began the year gapping lower and have not been able to recover.

TheStreet's Jim Cramer thinks this selloff in bank stocks is "overdone." Cramer's charitable trust, Action Alerts PLUS, holds Bank of America and Wells Fargo.

Bank of America shares "continue to struggle given reduced expectations around a potential Fed rate hike, heightened fears around its energy exposure and a broad drop-off in capital market activity," Cramer and AAP Research Director Jack Mohr said Thursday. "While these concerns are all valid to a certain extent, we view the stock's extreme selloff as overdone and historically significant" because "shares are trading well below recessionary levels (on a price to tangible book value basis) despite the lack of a recession.

"We do not believe investors are giving the bank credit for a much-improved balance sheet, stronger capital ratios and potential for significant capital returns," they added. 

As for Wells Fargo, its recently reported strong fourth-quarter earnings "reflect strong returns, solid loan/deposit growth and quality assets. We expect Wells to outperform peers in an environment of economic uncertainty and volatility," said Cramer and Mohr. It has a healthy dividend and a "diversified business model that offers pockets of growth. To top it all off, the company's sizable share buyback program should at the very least help provide a floor on shares, with the potential to drive upside to earnings estimates."

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Meanwhile, the "flight to safety" from stock market volatility has the U.S. Treasury 10-year yield down to 1.605% a new 52-week low versus the all-time low of 1.381% set in July 2012. The move into gold pushed the metal as high as $1,230.4 early Thursday, a level not seen since last May. Crude oil fell to a multiyear low of $26.35, as a clear sign of global economic weakness and indicates that central bank money printing and negative interest rates are doomed to fail as monetary policy measures.

Bank of America and JPMorgan have gapped below its 200-day simple moving averages, while Citigroup and Wells Fargo ended 2015 already below their 200-day SMAs providing warnings. Each ended 2015 with negative weekly charts indicating that lower prices lied ahead.

Each of these money center banks reported quarterly results between Jan. 14 and Jan. 19 and beat analysts' earnings-per-share estimates. Each were rebounding as January ended but immediately traded lower as February began. 

Here's the scorecard for our nation's largest banks, followed by technical charts for the individual banks.


Here's the weekly chart for Bank of America.


Courtesy of MetaStock Xenith

Bank of America closed Wednesday at $11.98, down 28.8% year to date and in bear market territory 35.2% below its multiyear high of $18.48 set on July 22.

The weekly chart is negative but oversold with the stock below its key weekly moving average of $14.31 and its 200-week simple moving average of $14.14. The weekly momentum reading is projected to decline to 18.01 this week down from 21.60 on Feb. 5 falling below the oversold threshold of 20.00.

Investors looking to buy Bank of America should place a good till canceled limit order to buy the stock if it drops to $10.98, which was the low set during the week of March 1, 2013. Investors looking to reduce holdings should place a GTC limit order to sell the stock if it rises to $15.98 and $17.58, which are key levels on technical charts until the end of February and March, respectively.

Here's the weekly chart for Citigroup.


Courtesy of MetaStock Xenith

Citigroup closed Wednesday at $37.41, down 27.7% year to date and in bear market territory 38.6% below its multiyear high of $60.95 set on July 23.

The weekly chart is negative but oversold with the stock below its key weekly moving average of $43.82 and its 200-week simple moving average of $46.83. The weekly momentum reading is projected to decline to 14.41 this week down from 16.08 on Feb. 5 falling deeper below the oversold threshold of 20.00.

Investors looking to buy Citigroup should place a good till canceled limit order to buy the stock if it drops to $35.10, which was the low set during the week of Nov. 30, 2012. Investors looking to reduce holdings should place a GTC limit order to sell the stock if it rises to $48.36 and $50.22, which are key levels on technical charts until the end of February and March, respectively.

Here's the weekly chart for JPMorgan Chase.


Courtesy of MetaStock Xenith

JP Morgan closed Wednesday at $55.52, down 15.9% year to date and in bear market territory 21.4% below its all-time high of $70.61 set on July 23. It appears that this stock will gap below its 200-week simple moving average this morning.

The weekly chart is negative with the stock below its key weekly moving average of $59.55 and just above its 200-week simple moving average of $54.43. The weekly momentum reading is projected to decline to 25.90 this week down from 28.21 on Feb. 5.

Investors looking to buy JP Morgan should place a good till canceled limit order to buy the stock if it drops to $45.83, which is a key level on technical charts for all of 2016. There's another key annual level of $55.45, which should act as a magnet. Investors looking to reduce holdings should place a GTC limit order to sell the stock if it rises to $62.51 and $66.53, which are key levels on technical charts until the end of February and March, respectively.

Here's the weekly chart for Wells Fargo.


Courtesy of MetaStock Xenith

Wells Fargo closed Wednesday at $46.17, down 15.1% year to date and in bear market territory 20.5% below its all-time high of $58.07 set on July 23. It appears that this stock will gap below its 200-week simple moving average at today's open.

The weekly chart is negative with the stock below its key weekly moving average of $49.86 and just above its 200-week simple moving average of $45.72, which was tested this week. The weekly momentum reading is projected to decline to 25.87 this week down from 29.30 on Feb. 5.

Investors looking to buy Wells Fargo should place a good till canceled limit order to buy the stock if it drops to $38.66, which is a key level on technical charts for all of 2016. Investors looking to reduce holdings should place a GTC limit order to sell the stock if it rises to $49.40 and $51.34, which are key levels on technical charts until the end of 2016 and the end of February, respectively.

 

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.