The four "too big to fail" money-center banks -- Bank of America (BAC) , Citigroup (C) , JPMorgan Chase (JPM) and Wells Fargo (WFC) -- will report first-quarter 2016 earnings this week. Two of these stocks are in bear market territory and two are in correction territory. Beating analysts' estimates and offering optimistic guidance will thus be extremely important.

Bank of America and Wells Fargo are both holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells BAC or WFC? Learn more now.

Jim Cramer commented on Bank of America stock on Monday: "This stock has been hammered mercilessly, and it still has risk. It is not our favorite, but we recognize the price to book has gotten absurd and it is a good hedge against higher Fed rates if they do take them up at an accelerated rate."

As for Wells Fargo, Jim Cramer and Action Alerts Plus Research Director Jack Mohr wrote on Friday, "We view Wells as a high-quality, well-managed, large-cap, diversified -- yet domestic -- bank that has numerous levers to pull in order to drive earnings growth amid the difficult backdrop weighing on global bank revenues. So the question really is not whether it has dry powder at its disposal (it does), but which form of capital deployment maximizes shareholder value .... We believe the company may take on a bit more risk, but expect it to invest in a disciplined manner, as it always has."

Here's a scorecard for the four "too big to fail" banks.

 

JPMorgan reports first, before the opening bell on Wednesday. Analysts expect the bank to earn $1.26 a share.

Bank of America and Wells Fargo report their earnings before the opening bell on Thursday. Analysts expect these banks to earn 22 cents a share and 98 cents a share, respectively.

Citigroup reports before the opening bell on Friday. Analysts expect the bank to earn $1.04 a share.

Here are the daily and weekly charts and their key trading levels, starting with the daily chart for Bank of America.


Courtesy of MetaStock Xenith

Bank of America had a close of $12.97 on Monday, down 22.9% year to date. It is in bear market territory, 29.8% below its multiyear high of $18.48, set on July 22. The stock is up 18% from its 2016 low of $10.99, set on Feb. 11.

The daily chart shows the Fibonacci Retracements from the July 22 high to the Feb. 11 low. The rebound from the low failed at its 38.2% retracement of $13.86 on March 21. Weakness on April 7 held its 23.6% retracement of $12.76.

Here's the weekly chart for Bank of America.


Courtesy of MetaStock Xenith

The weekly charts show a red line through the price bars, marking the key weekly moving average (a 5-week modified moving average). The green line is the 200-week simple moving average, the "reversion to the mean." The study in red along the bottom of the chart is weekly momentum (a 12x3x3 weekly slow stochastic), which scales between 00.00 and 100.00, where readings above 80.00 indicate overbought and readings below 20.00 indicate oversold. A negative weekly chart shows the stock below its key weekly moving average, with weekly momentum declining below 80.00 in a trend toward 20.00.

The weekly chart for Bank of America is neutral, with the stock below its key weekly moving average of $13.39 and below its 200-week simple moving average of $14.40. The weekly momentum reading is projected to rise to 47.98 this week, up from 43.91 on April 8.

Investors looking to buy the stock should consider doing so on weakness to $12.49, which is a key level on technical charts until the end of April. Investors looking to reduce holdings should consider selling strength to $14.39, which is a key level on technical charts until the end of June.

Here's the daily chart for Citigroup.


Courtesy of MetaStock Xenith

Citigroup had a close of $41.12 on Monday, down 20.5% year to date. It is in bear market territory, 32.5% below its multiyear high of $60.95, set on July 23. The stock is up 19.1% from its 2016 low of $34.52, set on Feb. 11.

The daily chart shows the Fibonacci Retracements from the July 23 high to the Feb. 11 low. The rebound from the low failed below the 38.2% retracement of $44.60 on March 21, then dipped below its 23.6% retracement of $40.75 on April 7.

Here's the weekly chart for Citigroup.


Courtesy of MetaStock Xenith

The weekly chart for Citibank is neutral, with the stock below its key weekly moving average of $41.91, and below its 200-week simple moving average of $47.39. The weekly momentum reading is projected to rise to 51.94 this week, up from 46.22 on April 8.

Investors looking to buy the stock should consider doing so on weakness to $36.44, which is a key level on technical charts until the end of April. Investors looking to reduce holdings should consider selling strength to $45.39, which is a key level on technical charts until the end of this week.

Here's the daily chart for JPMorgan.


Courtesy of MetaStock Xenith

JPMorgan had a close of $58.20 on Monday, down 11.9% year to date. It is in correction territory, 17.6% below its all-time high of $70.61 set on July 23. The stock is up 10.9% from its 2016 low of $52.50, set on Feb. 11.

The daily chart shows the Fibonacci Retracements from the July 23 high to the Aug. 24 low of $50.07. The rebound from the low was above the 50% retracement of $60.31 on March 18, then the low on April 7 was below its 38.2% retracement of $57.89.

Here's the weekly chart for JPMorgan.


Courtesy of MetaStock Xenith

The weekly chart for JPMorgan is neutral, with the stock below its key weekly moving average of $59.02, and above its 200-week simple moving average of $55.43. The weekly momentum reading is projected to rise to 62.73 this week, up from 58.06 on April 8.

Investors looking to buy the stock should consider doing so on weakness to $55.45 and $55.09, which are key levels on technical charts until the end of 2016 and the end of April, respectively. Investors looking to reduce holdings should consider selling strength to $60.30 and $62.45, which are key levels on technical charts until the end of this week and until the end of June, respectively.

Here's the daily chart for Wells Fargo.


Courtesy of MetaStock Xenith

Wells Fargo had a close of $47.03 on Monday, down 13.5% year to date. It is in correction territory, 19% below its all-time high of $58.07, set on July 23. The stock is up just 5.7% from its 2016 low of $44.50, set on Feb. 11.

The daily chart shows the Fibonacci Retracements from the July 23 high to the Feb. 11 low. The rebound from the low has failed above the 38.2% retracement of $49.95 on March 21, then broke below its 23.6% retracement of $47.86 on April 7, trading as low as $46.62.

Here's the weekly chart for Wells Fargo.


Courtesy of MetaStock Xenith

The weekly chart for Wells Fargo will shift to negative given a close on Friday below its key weekly moving average of $48.55. A break below its 200-week simple moving average of $46.47 in reaction to earnings would be the big warning for the four "too big to fail" money-center banks. The weekly momentum reading is projected to decline to 46.86 this week, down from at 47.65 on April 8.

Investors looking to buy the stock should consider doing so on weakness to $44.83, which is a key level on technical charts until the end of April. Investors looking to reduce holdings should consider selling strength to $49.40 and $50.11, which are key levels on technical charts until the end of 2016 and the end of this week, respectively.

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

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