When tech gets soft, bank on the banks!! – May 31, 2024
Dan Fitzpatrick here at StockMarketMentor.com. I want to look at Wells Fargo ( NYSE: WFC ) as a trade idea.
You can see how the stock fell back, not too steep like a lot of stocks have lately, but it just drifted back to test the 50. It spent a little time under there on Wednesday, and since that time it came up. Now, today the stock closed on about twice the average volume, it was up a little over a buck, 1.22 percent is what I’m talking about.
If we look at the weekly chart you can see the stock is still in this ‘toppy’ area around $60.00 that it’s had a heck of a time clearing. If you look at the Banking Index ( INDEXDJX: DJUSBK ), in general, it’s sucking a little bit on the weekly chart but on the daily chart, you can see there’s some pretty good strength here.
You’ve got Wells Fargo ( NYSE: WFC ), which is giving us a good bounce. You’ve got Goldman Sachs ( NYSE: GS ) that’s giving us a decent bounce. Morgan Stanley ( NYSE: MS ), a decent bounce JPMorgan ( NYSE: JPM ), I really like the way this thing has been trading. All in all, I think the banking stocks are a good place to be parking some money, while some of these other stocks, the semis, and the software stocks sell off and regroup. Just be mindful that the market ( NYSEARCA: SPY ) is a little funky today, and that means something.
You could look and say, Wow, this was a really, really great day, a healthy day, and all of that. And it was, but I have to say, this is a little bit concerning to me, that on the last day of the month, the market was selling off like this. Then magically, boom, at 12:30 we had a buy program that hit everything all across the board ( NASDAQ: QQQ ), ( INDEXNASDAQ: .IXIC ).
It started running right at 12:30, so it’s important to be mindful of that. When you see this stuff, right across the board, everything’s running up at the same time, that’s a buy program. That may lead to something next week or it may just be a one-hit-wonder, and then more weakness resumes on Monday.
I don’t know which way it’s going to be, but I do know that it typically doesn’t pay to discount some things. In other words to say, Well, I know it looks like this but we did get a lot of selling during the first part of the day. So, you know what, this doesn’t really matter. No, it does matter, I’m cautious about things right now.
When you see twice the average volume and a big monstrous close, essentially right at the high of the day, the high of the day was 528.36 and this thing closed at 528.07, that’s basically a close right at the high of the day. So we could very well be seeing the worst of this selloff as being over. We’ll know for sure on Monday morning.
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