This Is Why The Bank Stocks May Be Knocking on Heavens Door

This Is Why The Bank Stocks May Be Knocking on Heavens Door

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MICHAEL KRAMER AND CLIENTS OF MOTT CAPITAL OWN SHARES OF NFLX, TSLA

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The market continues to twist and turn and trying to figure out its direction seems nearly impossible. Which I will admit has become almost impossible for me too. That is why it is so important to try to find the broader trends in the market. That is another problem because, despite all the ups and downs, the S&P 500 has gone nowhere since the end of October. We have been stuck in a trading range between 2600 and 2800.

But if there is one thing we can establish is that over the past few days, the highs have been higher, and the lows have been higher. Which tells me we are at least trending higher, for now.

spx

Russell 2000

The Russell 2000 is holdings its lows, and not making new lows.

russell 2000

SPY

Even the volume levels continue to come down to their three-month moving average.

volume

Anyway, let’s move on

Netflix (NFLX)

Netflix is once again approaching a downtrend which has been in place since October, which could signal a breakout is on the way. Also, the RSI is indicating a break out is near.

nflx

Facebook (FB)

Facebook has already broken out of a long-term downtrend, and rise above $149 sends the stock higher towards $157.50.

facebook

Micron (MU)

Micron reports quarterly results next week and my views are bearish. I wrote up a premium article on it today. More Bad News For Micron? There was a negative story on DigiTimes today about NAND pricing. 

The chart looks horrible, the stock failed at resistance around $36.40 twice, and it seems like it is heading lower towards $34.10.

mu

Tesla (TSLA)

Tesla is nearing its all-time high once again around $389. I have not seen many quadruple tops, and I’m not sure that it even exists. But it would suggest to me that this time when the stock gets to $389, it goes right on through it on its way towards $400. The RSI clearly shows there has been a shift in momentum which is bullish.

tesla, tsla

Roku (ROKU)

Roku keeps falling, and $29 is in the stock path.

roku

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JD

JD is attempting to break out. A rise above $23 would suggest the stock could go on to increase to around $26.10.

jd

Knocking On Heaven’s Door

The bank’s stocks look horrible.  That yield curve is just 15 bps wide on the 10-2s.  Home Sales are slowing, which means loan growth is slowing. Citigroup warned two weeks ago fixed-income revenue would be down versus last year. Surely not a good setup for the banks going into 2019. I mean the banks must be loving it? All those buy-back? Repurchasing their stock at even lower prices, its like shopping on Amazon.com. Of course, it doesn’t help the shareholders.

I want to know what happened to all the guys in June and July that were screaming on TV on how cheap the bank’s stocks were? What about how the buybacks were supposed to boost these stocks shares?  Hmm? All those guys seemed to have disappeared.  All these stock were trading at such low PE’s then, they’re trading at even lower PE’s now. I mean shouldn’t they love them even more now?

Funny. I also thought banks were valued based on price to tangible book value? These stocks weren’t so cheap if you had looked at them from that metric.

Anyway, this was my view of Banks on October 13, September 27, July 24,  June 29, April 13 Whatever!

I’m not also right either, but at least I’ll tell you when I was wrong.

Bank of America

Bank of America looks very well and has $22.90 in its crosshairs.

bac

Morgan Stanley (MS)

I’d hate to see this, but Morgan Stanley is on the brink of a major break down. The stock is sitting on support at $40.60. It looks like it could fall to $34. Ouch!

ms

Goldman (GS)

If Goldman Sach’s can not hold on to support at $171, then it’s going even lower! To potentially $158.

goldman sachs

JPMorgan (JPM)

Finally, JPMorgan may be on its way to $94.75

JPMorgan

Good Luck

Mike

Photo Credit Via Flickr

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results

sp500, tesla, netflix, banks, jpmorgan, bank of america, morgan stanley, goldman sachs

 

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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.