October 11th, 2008
“I was going to write a speculative piece about the alternative possibilities of where the ‘hot money’ might flow after the oil and commodities bubble bursts, which I think can’t be too far off now.” That was the lead sentence in my May 5, 2008, piece entitled “Regional and Local Banks; Today’s Market Retreat“. Again, I was a little premature.
Just over five months have passed, the S&P 500 was 1390 back then, a whopping 55% higher than yesterday’s close, and in today’s Investors’ Business Daily Industry Snapshot, entitled “For Banks, Smaller is Better” you read:
“While IBD’s industry group of big money centers ranks a relatively poor No. 120 out of 197 total, community banks in all four regions of the country rank in the top 30…..Expect more bank failures and consolidation as the stronger banks pick up the weaker ones.
Given that the market has been devastated lately, lead by the large money center banks, oil and commodity stocks, it’s not surprising that a group that is falling less precipitously, even hold its own, is pushes higher in the Industry Group rankings. Regional Banks have done that:
It’s quite an extensive report, well worth getting your hands on and lists the following stocks:
- UMBF (UMB Financial)
- HBHC (Hancock Financial)
- SBNY (Signature Banks)
- PNFP (Pinnacle Financial)
- HTLF (Heartland Financial)
- SYBY (SY Bancorp)
A couple of days ago, in “What to Look for at the Bottom“, I wrote that stocks that have formed “Golden Crosses” (where the 90-day MA crossed over the 180-day MA) might be excellent trading opportunties in the early stages of a recovery from the market bottom. It’s interesting to note that the following 24 regional bank charts with “Golden Crosses” out of a mere 90 stocks in total fit that criteria. The most active of these banks include (click on symbol for charts):
- PNC (PNC Financial)
- NAL (Newalliance Bancshares)
- PRSP (Prosperity Bancshares)
- ONB (Old National Bancshares)
- HBHC (Hancock Holding)
- SBNY (Signature Bank)
Note: I’ve dubbed the double cross overs in the HBHC chart as a “Platinum Cross”, a chart where the 90-day has crossed both the 180-day and the 300-day MA – a perfect Bull Market alignment of 60-, 90-, 180- and 300-day MA’s. Perhaps that’s one of the reasons HBHC is also an IBD pick. IBD’s pick UMBF would have been on list too but it closed yesterday below the 90-day MA.