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Financial Stocks Death Spiral

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May 10, 2011 – Comments (0)

The financial stocks have been weak throughout 2011 as the Federal Reserve QE2 comes to a close. New rules and regulations have hampered them as well. As the markets have recently hit new 52 week highs, many financial stocks have made or are near new 52 week lows. Today, as the markets uptick again, financial stocks are finally catching a little bit of a bid and moving higher.  Goldman Sachs Group, Inc. (NYSE:GS) is trading at 150.24, +1.12 (+0.75%) while JPMorgan Chase & Co. (NYSE:JPM) is trading at $45.25, +0.29 (+0.65%). Bank of America Corporation (NYSE:BAC) and Wells Fargo & Company (NYSE:WFC) are also up approximately one-percent on the day.

While the financial stocks are seeing a rare move higher, it is likely they will see more downside in the near term. None of these stocks mentioned above have solid support. Goldman Sachs has major support at $143.00, JPMorgan at $43.00 then $42.00, Bank of America at $11.50 and Wells Fargo at $26.50.

These levels are key supports and should they hit, then these stocks will have a reward to risk that is worthy of a long. Until then, today appears to be a minor dead cat bounce in an otherwise ugly sector.

Gareth Soloway
InTheMoneyStocks.com

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