SVB Bank Stage Analysis : Never Buy a Stock in Stage 4Silicon Valley Bank Stage Analysis:
If you understand this, you would have exited in January 2022
Never Buy a Stock That are in Stage-4
SIVB
SIVB drop of 60% in one dayWhile everyone, including FED, is assuring that banks are adequately capitalised and there is nothing to worry about.
These are not good signs.
Manage your portfolio risk.
SIVB Meltdown- Canary in the Coal mind?Today we saw a systemic risk in the financial sector. The regional banks were hit extremally hard and as a result the Major banks saw sell side liquidation.
Where there's one cockroach, there's usually another.
Risk in the banking sector is the worst type of risk investors can ask for. Credit liquidity crisis is not something to mess around with.
SIVB looks like its in serious trouble potentially being exposed to fraudulent crypto loans that will likely default as well as failed speculative startups in the tech and health care space.
Any chance for a $SIVB Revival?No surprise we saw a huge knife down that met with hard resistance at ~$82.77. This price point acted as a huge support back in 2016. Despite the NFP numbers, there should be a relief bounce for the stock, but any follow-through to break that resistance during the trading day could introduce a retest of the monthly high in 2000. You can be certain that Silicon Valley Bank is at risk of losing capital to the many companies that will be looking to withdraw (keep in mind that the struggling tech market means fewer deposits in SVB). I have no specific positions on $SIVB and see a very long road to recovery here. Their 2.3B firesale in new shares would cause extreme dilution to the stock, which was needed from their horrible positioning just before interest rates increased with their $21 billion bond portfolio having a yield of 1.79% and a duration of 3.6 years compared to the 3-year treasury yield of 4.71%.
What happened today is a harbinger of what's to come for the entire market.
XLF - Technical Breakdown in finacialsXLF is now trailing behind the KRE . This topping formation has now triggered on the daily chart and is showing us there is a tremendous amount of risk in the banking sector.
Will we see a small bank blow up which causes contagion?
SIVB - MegaphoneDouble Megaphone structures
Dominant trend within these structures in yellow
Price I expect to hit the yellow line and continue upwards as it did following the first megaphone top
Financial giant $PNC could follow the leader $SIVBWhenever I miss the chance to buy a breakout of a leading stock, I look for other stocks in the same industry. As my personal account is still too small to buy a stock like SIVB , I've been watching PNC to buy when it breakouts from its large base. This strategy has helped me to capitalize industry moves. A good example was when I missed TBK but bougtht CASH . Normally good stocks follow the leading stocks.
The earnings report missed estimates making the stock to gap down but had a higher close, this move could be the handle of the "cup & handle pattern" that has been making since May. I'll wait for the breakout to take a position.
The breakout pivot point is at $205, with a 2:1 risk/reward ratio my stop loss is at $196.55 with a target sell at $224.15. NYSE:PNC has a IBD RS of 84 with a rank #10 in its Industry Group.
Sometimes I like to check the options market of the stock. The option with highest volume and open interest is a CALL option with a 23.61% implied volatility. That means that the market is expecting an upside move of at least +1.50% on Monday, and a +3.40% move in the next 5 days. Next week is key.
