BAC, C, JPM, GS updates 06/26

With the financials not having played ball during the past rally, and all major banks below their 200d SMA, but showing a lot of strength today, its time to review if these stocks are dead or if there’s still live left in them.

BAC: Very nice intra-day reversal off the 23.6% retrace of major-3. This Fib-retrace is often the minimum retrace level for a 4th wave and if it is all she wrote, it means this is a strong stocks as the Bears couldn’t even push price to the more usual 38.2% retrace. Price is coming off deeply oversold and it looks like a falling wedge is forming. This is a Bullish setup. Clearly the price action since the February high has been corrective down: too much overlap. A break above the upper downtrend line of the wedge will confirm major-5. Longs can be initiated on a close back above the 200d SMA, with a stop on a close below it. KISS. Price target is $37-34.

BAC

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C: Very strong intra-day reversal (hammer) candle today (see chart below), and right off the 38.2% retrace of major-3 (see 2nd chart). As mentioned above, that’s the typical 4th wave retrace level. So far so good. Also here a wedge is forming, but price is still well-below its 200d SMA, and therefore has a lot of work to do. A break above the 50d SMA will go a long way to confirm major-4 has bottomed. It will be confirmed on a move back above the 200d SMA. For me that’s always the “go long” signal. Looking for a major-5 target of around $85. But once intermediate-i and ii are confirmed we’ll be able to narrow it down more precisely assuming we get a standard impulse and not an ending diagonal which are very hard to trade and forecast.

C daily2

C daily

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JPM: Let’s start with the big picture first, as it hasn’t changed from last. I still expect a intermediate-v to complete Primary-III followed by a Primary-IV and V to end this bull off the 2002 lows. Primary-IV will not be funny, so I’d step aside (aka exit or reduce exposure) because sitting through a 30% haircut, with only the possibility of say 10% additional gains compared to III is IMHO not worth it. Remember: all 5th waves are required to do is making a higher high above the prior 3rd wave…

JPM monthly

Like the other banks, also JPM is sporting a falling wedge patter: bullish. But also here, price is below its 200d SMA and a close above it is required to re-establish the longer term uptrend.

JPM daily

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GS: For now, I am least bullish on this bank stock as it may have completed Cycle wave-C. The alternate is a intermediate-i and ii of major-5 wave. A drop below 205 will confirm the former option. Price is right at very important support and it must hold. A break below targets mid to high-100s. A move back over $250ish will go a long way to re-establish the Bullish alternative.

GS monthly