Much like the previous update on the Small Caps assumes a short-term bearish view on the USD, this update assumes a short-term bullish view on long-term Treasury yields (the recent spike in yields reversed yesterday and they are down again today). Personally, I am not at all clear on the short-term situation in yields but added COF yesterday for its chart and to temporarily at least, balance the rising yields side of the boat. Again, it is portfolio balancing, not one-for-one trading that I am doing.
Besides being what’s in my wallet and besides the extremely positive experiences I’ve had dealing with the company’s customer service, the chart broke out above resistance a couple days ago and is now testing that former resistance as support. COF had an earnings beat, which is nice but not unusual in the Financials this season. The important thing once again, will be the interest rate view.
So it’s testing the newly formed support area and has a gap a hair below 96. For my position – again, depending on an interest rate view subject to macro whipsaw and thus, change – I don’t want to see it fill. But a stingy would-be buyer can assume a still constructive situation even with a test of the SMAs 50 & 200 around 95.
A caveat is that I personally believe the market is vulnerable over the next couple of months but NFTRH+ is a chart service and your market view and/or portfolio may accept a position in the Financials. In that case, the chart above is presented for its bullish potential, as a stand-alone situation.
If the breakout is successful the pattern measures 104 (conservative) and 108 (best case). Manage risk as per personal tolerance on a break below support. Caution advised if the moving averages get taken out.
A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the buy, sell, stop parameters are already noted. They are meant as a starting point for your further research if interested. I will not personally buy every item highlighted and will sometimes sell (ref. Trade Log) any item that I do buy below target (assuming I’ve not stopped out or sold for some other reason), which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.