A number of the big US bank stocks are consolidating under significant resistance levels and this raises the question of whether this is consolidation before the next bullish breakout or before some overdue mean reversion. In this post I look at the charts of some of these banking stocks, as well as the Financials sector ETF, XLF, and identify technical levels to watch for any bullish or bearish breakout and, also, the Highs and Lows to monitor with any breakout.

 

XLF: Financials ETF 

XLF weekly: Price action on the Financials ETF is consolidating under the previous GFC High of $31:

 

XLF weekly:

• Bullish Targets: the weekly chart could be viewed as a bullish ascending triangle. The Height of this triangle is $26.50. Thus, technical theory would suggest that any bullish break and hold above $31 might extend by this same amount making the target for any breakout move of $57.50.

• Bearish Targets: this weekly chart has been overlaid with Fibonacci retracement and it shows that the popular 61.8% level is near previous Support/Resistance (S/R) of $15. This level would be in focus with any pullback that breaks through the support trend line.

 

 

C: Citigroup

C weekly: Price action is currently consolidating under the $80 level and the monthly chart (below) shows that $80 is previous long-term S/R.

 

C weekly:

• Bullish Targets: the monthly chart (further below) shows that the 61.8% fib level of the 2007-2009 swing Low move is up near $360 and so this would be the longer-term target for any bullish break and hold above $80 and continued recovery move.

• Bearish Targets: this weekly chart has been overlaid with Fibonacci retracement and it shows that the popular 61.8% level is near previous Support/Resistance (S/R) of $55 and this level would be in focus with any pullback.

 

C monthly: Note the $80 S/R level back in 1993:

 

GS: Goldman Sachs

GS weekly: Price action has been in an uptrend since the GFC but has stalled at the $260 level.

 

C weekly:

• Bullish Targets: the weekly chart here could be viewed as a bullish ascending triangle as well. The Height of this triangle is $235. Thus, technical theory would suggest that any bullish break and hold above $260 might extend by this same amount making the target for a bullish breakout move at $515.

• Bearish Targets: this weekly chart has been overlaid with Fibonacci retracement and it shows that the popular 61.8% level is near previous Support/Resistance (S/R) of $140. This level would be in focus with any pullback that breaks through the support trend line.

 

JPM: JP Morgan:

JPM weekly: Price action here, too, has been in an uptrend since the GFC and has also stalled under resistance. The resistance here is from the $120 level:

 

JPM weekly:

• Bullish Targets: the weekly chart here could also be viewed as a bullish ascending triangle. The Height of this triangle is $105. Thus, technical theory would suggest that any bullish break and hold above $120 might extend by this same amount making the target $225.

• Bearish Targets: this weekly chart has been overlaid with Fibonacci retracement and it shows that the popular 61.8% level is near previous Support/Resistance (S/R) of $60. This level would be in focus with any pullback that breaks through the support trend line.

 

BAC: Bank of America

BAC weekly: The swing high move of note here is the one dating from 2016 – 2018:

 

BAC weekly:

• Bullish Targets: the monthly chart (further below) shows long-term price action trading in a monthly triangle with the 61.8% fib up near $35. This would be the target with any bullish breakout and continuation from the weekly Flag pattern.

• Bearish Targets: this weekly chart has been overlaid with Fibonacci retracement and it shows that the popular 61.8% level is near previous Support/Resistance (S/R) of $20. This level would be in focus with any pullback that breaks through the bottom Flag support trend line.

 

 

BAC monthly: The $35 level is the next target with any Bullish weekly chart Flag breakout: