Bank Earnings: Which Companies Show Most Profit Potential?

Earnings season is upon us and with the rising market, earnings expectations have followed.  

This is especially true for the banking sector which is supposed to have well outperformed the first quarter.

The reason for such predictions can be attributed to bank’s increased profits from low-interest rates enticing a wave of new mortgages and loans throughout the pandemic. 

With that said, which banks have the best technical chart setups to trade from a daily perspective? 

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wells fargo bank stock price chart earnings announcement image

Wells Fargo (WFC) reported today (July 14) and the stock took off towards its 50-day moving average at $45.46.

With such a large move, WFC stock price will need to clear its major moving average as the 50-day moving average represents nearby resistance to clear. 

On the other hand, Morgan Stanley (MS) is in a strong bullish phase and could be traded on a break to new highs.  

Another bank that looks interesting is U.S Bancorp (USB).

us bank corp earnings reaction stock price chart

However, like WFC, USB also needs to confirm a phase change over its 50-day moving average at $58.53. Note that both USB and MS report earnings pre-market tomorrow (July 15).

Our stance on taking new trades in earning season is normally to wait for the company to report before taking a trade.

That makes this week a potential great opportunity to buy bank stocks as earnings is out of the way, and as laggards, should the market hold, have lots of upside potential.

Stock Market ETFs Trading Analysis and Summary:

S&P 500 (SPY) 427 support area.

Russell 2000 (IWM) Watching support at 217.85.

Dow Jones Industrials (DIA) 351.09 high to clear.

Nasdaq (QQQ) 359.65 minor support the 10-DMA.

KRE (Regional Banks) Lots of bank earnings tomorrow could push KRE higher.  Next support area at 61.24.

SMH (Semiconductors) Cleared highs but could not hold. 10-DMA at 258.50.

IYT (Transportation) 251.78 support.

IBB (Biotechnology) Like to see 158.60 level hold.

XRT (Retail) 99.24 main resistance. 91.71 main support.

Twitter: @marketminute

The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.