Banks have been on many radars as of late, and I think unnecessarily so. Stick to groups that are working. However it always pays to stay alert to names that may be forming bottoming patterns. Domestic names here may not be humming on all cylinders. Looking around the world though one would see the Canadian names benefitting from a rebounding crude price and below we will take a recent and current look at a South American name, CIB.
Here is precisely how we presented the idea in our Monday 6/6 Game Plan. CIB is a Colombian financial play higher by 27% YTD and lower by 17% over the last one year period and sports a dividend yield of 4.3%. The stock is acting well despite four consecutive negative earnings reactions of 1.9, 1, 4.6 and 1.7% on 5/24, 3/10, 11/13 and 8/14. CIB is higher 14 of the last 21 weeks with some several double digit weekly gains of 11.3, 10 and 10.3% ending 1/22, 4/15 and 3/4. It has had trouble with the round 40 number since breaking below a bearish head and shoulders pattern last July that started that April. The number was resistance on 10/9 and 10/12 last year and this 4/21 and 4/29. CIB did record a bullish morning star pattern this week off 200 day SMA support after breaking above it in early March (it was below that line since October ’14 previously). Look to enter on a slight pullback into the pattern at 33.35 and add to above a double bottom trigger of 37.04.