Four 'Too Big to Fail' Regional Banks Are Above 200-day SMA

TheStreet.com

NEW YORK (TheStreet) -- I have been warning about the risk of reversion to the mean and in my first post today I showed how 11 components of the Dow Industrial Average have either held their 200-day simple moving averages on weakness, or are now trading below its 200-day SMA.

In this post I show that only one of the 24 members of the regional banking index is below its 200-day SMA. Others have been declining towards these key levels as key supports after failing to hold their 50-day SMAs.

All 24 regional banks are overvalued with seven overvalued by more than 20%. All have hold ratings according to www.ValuEngine.com . Only one is slightly lower over the last 12 months while 11 are up between 21.1% and 56.1%. Only one is below its 200-day SMA. 22 of 24 are below their 50-day SMAs which indicate risk to the 200-day SMAs reflecting the continued risk of reversion to the mean.

Reading the Table

OV/UN Valued: Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.

VE Rating: A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy.

Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.

Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.

Value Level: Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual.

Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.

Risky Level: Price at which to enter a GTC limit order to sell on strength.

Bank of America ($13.84) set its multi-year high at $15.03 on July 23. The 200-day SMA is $12.97 with the 50-day at $14.39.

BB&T ($32.76) set its multi-year high at $36.59 on Aug. 5 and is now below its 50-day SMA at $34.65 with the 200-day SMA a tight support at $32.48.

Citigroup ($47.95) set its multi-year high at $53.56 on May 30 and is now below its 50-day SMA at $50.09 with the 200-day SMA a tight support at $47.29.

Capital One ($68.10) set its multi-year high at $70.49 on Oct. 4. This bank is just above its 50-day SMA at $67.69 with the 200-day way down at $61.09.

Fifth Third Bank ($17.75) set its multi-year high at $19.79 on July 24. This bank has been below its 50-day SMA at $18.63 since Aug. 27 and is just above its 200-day SMA at $17.43.

Huntington Bancshares ($8.12) set a multi-year high at $8.78 on Aug. 1. This bank has been below its 50-day SMA at $8.45 since Sept. 19 with the 200-day SMA a support at $7.66.

JPMorgan ($50.75) set a multi-year high at $56.93 and July 24 and has been below its 50-day SMA at $52.75 since Aug. 14. This biggest of the four 'too big to fail' banks is on the cusp of its 200-day SMA at $50.74.

M&T Bank ($110.63) set its multi-year high at $119.54 on July 18 and has been below its 50-day SMA at $114.51 since Aug. 27. The 200-day is a key support at $107.40.

Northern Trust ($52.94) set its multi-year high at $62.00 on July 16 and has been below its 50-day SMA at $55.82 Aug. 5. This bank has been below its 200-day SMA at $55.25 since Sept. 27.

PNC Financial ($70.87) set a multi-year high at $77.93 on Aug. 2 and has been below its 50-day SMA at $73.95 on Aug. 26. The 200-day is a key support at $68.97.

Suntrust Banks ($32.27) set its multi-year high at $36.29 on July 19 and has been below the 50-day SMA at $33.52 since Aug. 27 except for one day, Sept. 18. The 200-day SMA is a key support at $30.97.

US Bancorp ($35.96) set a multi-year high at $38.23 on Sept. 18 and has been below the 50-day SMA at $36.86 since Sept. 24. The 200-day SMA is a key support at $34.96.

Wells Fargo ($40.36) set a multi-year high at $44.78 on July 23 and has been below the 50-day SMA at $42.28 since Sept. 20. The 200-day SMA is a key support at $39.11.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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