Weekly Market Report for (August 7th, 2011 - August 13th, 2011)
This past week has been one of the more volatile and turbulent trading periods for the stock market since early 2009. Money has flown right out of the stock market as the problems in the European Union and the United States hit main street. The problems are debt, debt, and more debt. There has been very little done to correct these debt issues, except for creating more debt. The stock market is now telling the world that simply increasing the debt is not going to fix the problems facing the United Sates and Europe. It can be argued that every bailout, whether it was the TARP bailout in the U.S, or the recent EU bailouts in Greece, Ireland, and Portugal are simply just more bailouts for banks. Eventually, the banks that hold all of this bad debt will simply have to take the hit and write down the loss. That has not yet occurred, however, it is getting closer to reality everyday. In this week's report we shall examine three different financial institutions that are likely to come under further selling pressure due to holding bad debt.
Banco Santander SA (NYSE:STD) is a leading European bank that is based in Madrid, Spain. This leading bank has been declining since January 2010 when the stock traded as high as $17.55 a share. On August 5, 2011 the stock traded down to its June 2010 low before closing at $9.39 a share. This stock is in a very weak technical position trading below all of the major daily chart moving averages. The only positive factors that we can see for the stock at this time is that it is very extended and oversold at the moment which typically leads to a move up. The stock also has some daily chart support around the $9.00 level. It is important to note, in this type of economic climate weak stocks can easily break daily chart support levels. News out of Europe is being released very often and this should make this stock very volatile for weeks to come. Traders can watch for some daily chart support around the $8.00 area. Should the stock rally from its current level, traders should watch the $10.50 area as important resistance in the near term.
Deutsche Bank AG (NYSE:DB) is leading bank based out of Frankfurt, Germany. Believe it or not, Germany has been considered by most investors as the safe haven country in the European Union. In any case, the Deutsche Bank stock topped out in October 2009 at $84.93 a share. Since that time, the stock has been making a series of lower highs on the weekly chart. On August 5, 2011 the stock closed at $48.20 a share after trading as low as $45.83 a share. This leading European bank stock is also very extended and oversold at the moment. Stocks with this type of pattern will usually react and bounce to any positive news. Should that happen over the weekend, traders can watch for resistance around the $55.00, and $57.50 levels. Should DB stock continue to decline the next important support levels will around the $44.00, $40.50, and $37.75 areas. Watch these levels closely, place them on your charts and trade them accordingly. The Pros will be trading them and making money. Join them live in our Intra Day Stock Chat, view their charts, hear them over your speakers, ask them questions, make money and get started for free with our Free Trial. click here to get started and be ready for the week
Credit Suisse Group (NYSE:CS) is one of the leading banks based out of Zurich, Switzerland. First, it is important to note that Switzerland is not part of the European Union, however, the bank does have global exposure, especially to most of Europe. This is another leading bank that topped out in October 2009 at $60.00 a share. On August 5, 2011 the stock closed at a new 52 week low at $31.58 a share. This stock is really not very different from the other leading banks stocks on the charts, it is oversold and extended to the downside on the daily chart time frame. Should the European Union come out with some type of band-aid fix for the European Union countries over the weekend this stock could be a bounce candidate. Should the stock decline from here traders should watch the $30.00, $27.00, $24.00, and $22.50 levels for support. Should CS stock bounce higher from current levels traders can watch for resistance around the $34.00, $36.00, and $39.00 levels. These markets are extremely volatile at the moment and wide swings in both directions are very possible. Note the key levels, play them with tight stops and make money.