This chart analysis was requested by Daniel Morgan. What can I say, I’m a people pleaser.
Initially, I wasn’t 100% sure what ticker USB was but I was excited when I found out. I like bank stocks. JPM, WFC, FAS, BAC, C are all very fun to trade. I could always add USB to the list. Here’s what I see on USB.
As my note says on the chart, there is a small double top on USB. And, the stock’s price did close below the neck line of that double top. This is definitely a strong selling location. It’s always good to be reminded to “buy low, sell high” and conversely “sell high, buy low”. Thursday or Friday, USB will likely have its direction for the minor level trend. If the retest of the $41.21 resistance level fails, and we make a lower low, USB would likely have a small pull back to the 100 simple moving average (SMA), around $40.64.
Earnings on USB (according to earningswhipser.com) will be reported before the market open on 4/16/14. Since we are being amazing traders and planning our trade ahead of time, what I would love to see is a small sell off on USB; just $1 or $2, nothing cataclysmic. Then, USB reports great earnings and the stock gaps up and trades higher at the end of trading on 4/16/14. Personally, that would be a great buying location. If people trade USB short, into the 100 or 200 SMA and then the short sellers get “trapped” by the stock gapping up, those short would be forced to buy to close.
This is called a short squeeze. Boom! There’s a Newsome nugget for you.
The all time high for USB is $47.31. In the longer term, I really think there’s a solid chance this bank stock makes it up to that level again. Let’s see if this bad boy pulls back just a tad more, then buy the bounce, trade to your target and mitigate your risk. It’s all about creating a plan and trading that plan, folks.
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