By Nicholas Santiago on June 9th, 2010 3:38pm Eastern Time
Today the large major bank stocks are all slumping as the politicians meet in Washington and try to come up with a financial reform bill. While many traders and investors say that this is simply politics at its best as the politicians are fighting for their careers. Since the Gulf oil spill Washington is scrambling to try and show that they are going to be tough on all reform including oil drilling and financial reform. Therefore, these banks may not get what they want despite the massive amount of lobbying dollars they have in Washington.
Today J.P. Morgan Chase (NYSE:JPM) has struggled even when the market was in rally mode during the morning trading session. JPM will have intra-day support around the $33.30 - $37.00 level. Should JPM take out its recent low on the daily chart the stock could decline down to the $35.00 level rather quickly.
Wells Fargo & Co (NYSE: WFC) is another leading financial stock that falls into the “too big to fail” category. WFC is trading lower today by 0.56 to $27.20. The stock will have intra-day support at the $27.00 level. The daily chart will have support around the $25.00 area should it breakdown and close below yesterday's low.
Bank of America (NYSE:BAC) is another name that is very weak today trading down 0.31 to $15.00. If this stock breaks down below the recent low on a closing basis this stock could test the 14.00 level rather quickly.
It is important to remember that these large bank stocks can borrow from the Federal Reserve Bank at zero percent and they are still struggling here at this time. Therefore, traders have to be very cautious as Washington has the tendency to over regulate rather then under regulate in time of crisis and pressure. Many of the recent primaries have not fared well for the incumbent politicians. Therefore, these government officials will take drastic measures to save their own hides.
Comments