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What Should You Do Ahead of Bank Earnings?

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Take a a look at some major banking stocks, including JPMorgan, Bank of America, and Goldman Sachs.

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MINYANVILLE ORIGINAL Are you ready for bank earnings? We have been all over the mega-cap money center banks since mid to late August.

Since ChartLabPro.com first initiated a Buy reading on August 24 based on our proprietary algorithm, this is how the banks have performed:
So the million dollar question is: What should you do ahead of earnings? Well, that all depends on your objective. If you're a swing trader and have owned these names since August 24, we would not risk these gains and reduce exposure. As traders, we never go into earnings with a directional bet, which is just guessing. Long-term investors who have owned these names for several months can stay the course. There is no reason to own more than one of these names. Over the last several years, these names perform well into earnings, gap up on earnings, and then sell off. If you are looking for exposure after JPMorgan reports, go with the higher beta name, which is Bank of America.

These stocks all have the same correlation and provide very little out performance (see the correlation graph below). All of these names are currently rated a Strong Buy (5 Rating). Even though Goldman Sachs is technically a bank (yes, it has a bank charter, we know), it trades with the group. At the end of this article, we have also listed the strongest financials based on our algorithm for your consideration.





Bank of America



JPMorgan




Citigroup


Wells Fargo




Goldman Sachs



Click to enlarge

For more from ChartLabPro.com, click here.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
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