On Wednesday morning, we talked about the the Golden Cross pattern that has formed on the Regional Bank ETF (KRE). Check out the article here if you missed it.
Today, I’m going through two regional banks stocks that I’m adding to my portfolio, as we break into what is likely to be a bullish year for the smaller banks.
I’m going to keep this short and to the point.
Huntington Bancshares (HBAN)
HBAN shares emerged from the sub-$10 price range over the last month or so and made a bull run to $12.50. That move took them into overbought territory, and they deserve a rest. That’s exactly what I expect to see as we get rolling in January 2024.
One of the simplest technical and sentiment rules is going to apply to the stock – round numbers.
The $12 price is only 4-5% below current prices. The market will see a round number of $12 as a “value” for HBAN… and pounce.
Here’s an easy contrarian view of the stock. Nine of the 15 Wall Street firms tracking the stock have it ranked a “hold” or “sell.” That’s 67%. Those analysts are going to start upgrading this stock to a buy as interest rates fall in 2024. I love riding analyst upgrades to higher prices.
New York Community Bancorp (NYCB)
I like stocks that I call “Best in Breed,” and New York Community Bancorp is one of them.
The stock has been a relative strength leader in the banking – small and large – sector for the last year. It’s still seen as a value proposition from my view.
We’re in the process of seeing Wall Street wake-up to the potential value as Michael Burry (you know, the Big Short guy) closed out a short position on NYCB in November while David Einhorn, another big name in the hedge fund industry, opened a new bullish position.
NYCB shares have dropped 12% in the last week as “The Crowd” is reallocating to some of the riskier names in the sector, but that’s creating an opportunity for the long haul at a price I love.
Ten dollars! That’s right, the stock is trading at $10, one of those special psychological prices. Watch for support at this price and use it as an indicator that NYCB is ready to make a bull run to $13 over the next quarter.
About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant – like the “rocket scientists” of investing – with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street’s data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It’s the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron’s, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Penny Hawk. He also contributes to Money Morning as the Quant Analysis Specialist.
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