Now that panic over Greece and China has (finally) started to subside, investors have begun to turn their attention to the parade of U.S. corporate earnings. That’s especially good news for the financials.
Banking stocks in particular struggled in the last couple of weeks — but have really started to turn things around more recently, getting further help from earnings beats by JPMorgan Chase (JPM) and Bank of America (BAC).
In this environment, Profit Scanner powered by Recognia has identified plenty of bank stocks that, from a technical standpoint, are looking great for bullish trades.
Read on for four such stocks that you can trade now, ahead of their own earnings announcements.
Bank Stocks: Barclays (BCS)
Click to Enlarge Barclays (BCS) is up more than 4% this week, starting with a gap higher at the Monday open, and during that time BCS has put in a series of bullish signals.
On Monday, the stock’s momentum indicator turned short-term bullish. This basically signals a healthy price trend, and is plotted by the difference between the last bar and the price 10 bars ago. When the Momentum indicator moves strongly above the flat line, as is the case here, it shows that the stock is exhibiting strong bullish momentum.
Then, on Tuesday, the MACD turned short-term bullish as well. While the MACD is calculated using moving averages, it essentially suggests the same thing: that BCS is enjoying increasing price strength.
Also on Tuesday, Barclays completed an Upside Breakout pattern with the potential to carry shares 6%-8% higher from here. You can see all three bullish signals on the chart below.
Barclays reports on July 29, which may give the stock a nice jolt higher towards the Profit Scanner’s $18.50-$18.80 profit target.
Bank Stocks: Royal Bank of Scotland (RBS)
Click to Enlarge Royal Bank of Scotland (RBS) also gapped higher on Monday and has enjoyed a couple of bullish signals since then.
On Tuesday, the stock’s Williams %R oscillator turned short-term bullish, suggesting that RBS is embarking on a new uptrend.
Williams %R compares a stock’s closing prices to the recent (14-bar) range and is used to tell when the stock ventures into oversold or overbought territory. A reading of -20 indicates overbought, while -80 indicates oversold. When a stock begins to recover from -80 and head back toward 0, as RBS did, you can take that as a short-term bullish signal.
In addition, RBS overtook its 50-day moving average on Tuesday — another compelling bullish signal. Since the 50-day MA is an intermediate-term indicator, and RBS doesn’t report earnings until July 30, you should have plenty of time to get in and reap some upside profits.
Bank Stocks: Deutsche Bank (DB)
Click to Enlarge Deutsche Bank (DB) has had an excellent week too, up more than 3%. On Monday, DB’s Momentum indicator turned short-term bullish, as did its Commodity Channel Index (CCI).
The CCI charts the difference between a stock’s current price and a moving average — in this case, the 20-day m.a. A reading of +100 is bullish, while -100 is bearish. So, with Deutsche Bank’s CCI firmly above +100, that indicates a bullish condition.
Most recently, on Tuesday, DB’s Short-term KST turned bullish as well. When the KST crosses above its own moving average, as was the case here, it indicates bullish momentum. DB reports on July 30, so you could look to ride the stock higher before then, or see if it enjoys further upside after the report.
Bank Stocks: SunTrust Banks (STI)
Click to Enlarge Last but not least is SunTrust Banks (STI). SunTrust reports on Friday morning, and its stock chart is showing plenty of short-term bullish momentum for those looking for quick profits.
On Monday, STI’s Momentum indicator turned short-term bullish, suggesting healthy price action. And on Tuesday, the MACD and CCI followed suit … both of which compare the stock price to moving averages to gauge momentum. With all of these signals in play, SunTrust is showing lots of potential for near-term gains.
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.
