U.S. equities remain rangebound on Tuesday, continuing a slow recovery from last week’s politically motivated volatility. Volume is light and trading ranges are tight. But there are encouraging signs if you know where to look.
Financial stocks in particular are looking ready for a run higher. These were among the hardest hit last week — threatening a nasty head-and-shoulders reversal pattern on the Financial Select SPDR Fund (NYSEARCA:XLF) — on fears the “Trump-flation” trade was fading.
A recovery now looks to be underway, as shares rally off of critical support as long-term interest rates push higher once more — lifting net interest margin expectations.
With that said, here are three stocks in the sector that look ready to move:
Bank Stocks to Buy: Bank of America (BAC)
Bank of America Corp (NYSE:BAC) shares are rising off of critical six-month support near $22.50 a share, threatening to move over its 50-day moving average. Watch for a possible return to its March high near $26, which would be worth a 10%-plus move from here.
The company reported a top- and bottom-line beat on April 18, with earnings of 41 cents per share six cents ahead of estimates on a 6.9% rise in revenues. The company will next report results on July 18 before the bell.
Bank Stocks to Buy: JPMorgan (JPM)
JPMorgan Chase & Co. (NYSE:JPM) shares are listing off of three-month support near $85 — avoiding a decline to the January low near $82.50 that looked so likely last week — setting up a run at its 50-day moving average along with the late April high near $89.
The company reported a top- and bottom-line beat on April 18, with earnings of 1.65 cents per share 13 cents ahead of estimates on a 6.9% rise in revenues.
The company will next report results on July 13 before the bell. Analysts are looking for earnings of 1.65 cents per share on revenues of $25.6 billion. Watch for a run at the early March high above $92.50, which would be worth around a 7% gain from here.
Bank Stocks to Buy: Citigroup (C)
Citigroup Inc (NYSE:C) shares are the most advanced here, perking up to challenge six-month resistance with a possible move over the $62-a-share level — representing a move to levels not seen since early 2009.
The company will next report results on July 13. When it last reported earnings, it was a top- and bottom-line beat with earnings of $1.35 per share beating estimates by 11 cents on a 3.2% year-over-year increase in revenue.
Analysts are looking for $1.26 per share next quarter on $17.67 billion in revenue.
Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to Investorplace readers. Redeem by clicking the links above.
