Sun Belt Regional Bank’s Chart Looks Hot, Hot, Hot

by Sam Collins | March 21, 2014 1:56 am

Regions Financial Corp. (RF[1]) — This financial holding company has almost 1,700 banking offices in 16 states mostly in the Sun Belt region. On Feb. 13, S&P raised its opinion to “strong buy” from “buy,” with a 12-month price target of $12. On March 7, it raised its target to $13, based on anticipated above-peer loan growth of 3% to 5%, a higher return of “excess” capital in the form of a dividend increase, and noninterest expense reductions.

Consensus estimates are for earnings of $0.86 per share in 2014, up from $0.82 in 2013, and $0.92 in 2015. The company pays an annual dividend of $0.12 for a current yield of 1.1%.

I first recommended RF on Feb. 26[2], near $10.50, saying, “Technically, RF has been in a powerful bull market since March 2012. In December 2013, it broke from a bullish triangle at $10 and ran to a six-year high of $11.08 in January.

“A round of profit-taking dropped the stock to its bullish support line, where it reversed and rallied above its 50-day moving average at $10.16. This pop was supported by buy signals from my proprietary indicator, the Collins-Bollinger Reversal (CBR), and MACD, as well as high volume. Buy RF as an intermediate-term trade to $12.”

On Thursday, the stock broke to a new high from an ascending triangle, which was coupled with a fresh buy signal from MACD. As a result, I’m increasing my trading target to $13.

RF Chart
Click to Enlarge

Chart Key[3]

  1. RF:
  2. on Feb. 26:
  3. [Image]:

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