European Debt Crisis: Here Is The Trade
Many of the leading European banks are now diverging from the U.S. banks, this tells us that the European debt crisis is far from over. In this Weekly Market Report we will examine three leading European banks using daily charts. The stocks discussed in this report are all trading under the daily chart 200 moving average, which is a sign of weak relative strength for the European bank stocks. The opposite is true for the U.S. banks, as J.P. Morgan Chase & co (NYSE:JPM), Bank of America Corp (NYSE:BAC), and Wells Fargo & Co (NYSE:WFC) are all trading above the daily chart 50, and 200 moving averages, which is a sign of strength on the charts.
Banco Santander SA (NYSE:STD) is a leading Spanish bank that operates throughout Europe, Latin America, and the United States. Last week, the stock closed at $8.05 a share which is 0.70 cents below its daily chart 200 moving average. It is also important to note that the stock is trading below its October 2011 high of $9.32 a share. The STD stock will have short term support around the $7.65, and $6.75 levels. Should the leading Spanish bank rally from current levels the stock will have daily chart resistance around the $8.77, and $9.50 levels. Take careful note of these levels, place them on your charts and trade them accordingly.
The National Bank of Greece SA (NYSE:NBG) is another leading European bank that looks terrible on the charts. Last week, NBG stock closed at $3.26 a share. NBG stock is also trading below the important daily chart 200 moving average. This pattern puts the stock in a week technical position on the charts. Traders and investors should watch for near term daily chart support around the $2.90, $2.50, and $1.70 levels. Should the stock trade higher and rally from its current price, their will be resistance around the $4.10, and $4.50 levels.
Lloyds banking Group plc (NYSE:LYG) is a leading bank based out of the United Kingdom. This stock closed at $2.12 on March 9, 2012. Believe it or not, this stock could be forming a base to actually trade higher in the future. Please note that the stock is still trading below the daily chart 200 moving average which signals poor relative strength when compared to the major stock indexes in the United States. LYG stock has very good support around the $1.80, and $1.40 levels. Should the stock rally from its current price there will be resistance around the $2.40, and $2.85 levels.