Banks Unfazed By Rate Chatter:
With this weeks loss of 2.6% heading into Thursday it looks as if its 6 week winning streak will be snapped. It recorded another 6 week winning run between weeks ending 12/28/18-2/1 before the week ending 2/8 lost 1.5% (the next 3 week all gained ground by a combined 4%). Nothing goes up in a straight line, but this group seems like it’s much more fit to keep its overall uptrend in place. It is the best behaved major S&P sector over the last one month period, and the space is not being drained by the chatter of interest rates not going higher, and even some calling for the next move to be lower. Respect the incipient trend, until it no longer exists.
Payment Platform Winner Squared Away:
Comparing big names in subsectors of their respective overall groups can yield valuable information. The bifurcation with PYPL and SQ is eye opening. PYPL sits just 5% off most recent all time highs, while SQ trades 33% off its own most recent peak. Since SQ hit a wall at the very round 100 number the three sessions of 9/28-10/2/18, it has weakened dramatically. It is lower 2 of the last 3 weeks with the 2 drops falling more than 4 and 6%, and all 3 CLOSED in the lower half of the weekly range. It trades underneath both its 50 and 200 day SMAs, whereas PYPL is doing just the opposite.
The banks are trying to make a stand here and names like JPM and BAC look firm. GS looks to be moving back toward its 200 day SMA, which happens to align with the very round 200 number. Below is another name in the arena and the chart of FRC, and how it appeared in out 5/1 Financial Report. It is not far from recent 52 week highs like JPM and BAC, but has a cloudy technical picture with good risk/reward to the downside. The stock has fallen 7 of the last 10 sessions after dubious candlesticks on 4/25 and 4/29. With several bearish candles at all time highs, the short scenario has a better chance of working out.