Investing in bank stocks can be confusing, frustrating, and downright difficult at times when “buy the news” trading cycles rule the market.
Add to that a healthy dose of Trump tweets and a dash of trade war drama, and you’ve got the makings of a “lose your mind (and money)” cocktail. Bank shares are chopping every which way these days, making most of them highly unattractive.
Especially to the trained eye of a veteran trader.
But that doesn’t mean there aren’t a select number of banks that stand out, nor are they all too difficult to trade. As of this morning, one in particular looks ready to rally after “checking” nearly every technical analysis box there is.
The best part?
It’s not even a “real” bank, but rather, a cooperative banking operation.
In the weekly candlestick chart above, you can see that we’ve got a repeat winner on our hands. New York Community Bancorp Inc (NASDAQ: NYCB) has bounced off the Bollinger Bands (BBs) like a ping pong ball over the last year, and traders who took a chance on this stock were handsomely rewarded for it.
Three times in a row.
And even though it looks like NYCB couldn’t get any better, we’ve got yet another promising trade on our hands. A higher low was set just two weeks ago, stochastics linger around 20, and contact with the lower BB has just been made.
But more importantly, we have the recent weekly candlesticks on a collision course with resistance at the 7-bar high. Should a breakout occur past that resistance, watch out. NYCB might “take off” again like it did in December.
Which, incidentally, was the last time the lower BB was hit AND the weekly candlesticks broke past resistance.
People often say that history repeats itself, typically with a negative connotation attached. In this case, though, I really hope it does.
Because what’s waiting on the other side of another breakout could be good enough to qualify for “best trade of the summer” territory. Even if other banks are getting rocked by up-and-down headlines from the press.
