York, Penn. isn’t exactly known as a financial hotbed, but traders should pay attention to a community bank based in the region, Codorus Valley Bancorp, Inc. (NASDAQ:CVLY).
The $116 million market cap firm owns and operates 20 retail financial centers in eastern Pennsylvania, offering typical banking services like money markets, savings, loans and mortgages. After a 105: 100 stock split on Oct. 24, this week, Codorus Valley Bancorp received regulatory approvals to acquire Madison Bancorp, another regional bank based in Baltimore.
Codorus Valley Bancorp stock moved up to new all-time highs on the news, but Profit Scanner powered by Recognia identified that shares could move a lot higher in the short term.
At the Nov. 6 close, Profit Scanner spotted a bullish Pennant pattern on Codorus Valley Bancorp’s chart.
A bullish Pennant is a short-term technical pattern that consists of two converging trend lines with diminishing volume. It’s confirmed when the stock’s price breaks through the upper boundary to resume advancing. Essentially, the stock’s price seems to be resuming a sharp rally after taking a brief pause.
This Pennant carries a price target that is some 22% higher from Codorus Valley Bancorp’s Nov. 6 close at $20.87. The pattern is expected to resolve in just nine trading days to an upside level of $25.50 to $26.50.
Now, full disclosure, this Pennant appeared on relatively low volume of just 754 shares traded, but Codorus Valley Bancorp’s average daily volume is only around 4,000 shares. Generally speaking, in technical analysis, the more volume, the greater the likelihood the pattern will play out to the target. So, traders should be mindful that, one, inventory on Codorus Valley Bancorp shares may be limited and, two, keep speculative positions small anyway because of the relatively low volume associated with the Pennant.
A stop loss is also a smart idea in a situation like this, and Profit Scanner places a tight stop at $19.29 or a medium stop at $18.20, depending on your loss tolerance.
But if you have some fun money to put toward this idea, you could ‘make bank’ in short order.
Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.
