Banks have been punished all year long. After making highs in early 2011, stocks like Goldman Sachs Group, Inc. (NYSE:GS), Bank of America Corporation (NYSE:BAC) and Citigroup Inc. (NYSE:C) have all come crashing down. Goldman Sachs hit a high of $175.34 in January before selling off to its recent price of $133.25. Both Bank of America and Citigroup have performed equally as poorly as have others.
There is a persistent fear of massive new regulations coming to the financial institutions in the next few months. These upcoming regulations sparked a question by Jamie Dimon from JPMorgan Chase & Co. (NYSE:JPM) to Ben Bernanke yesterday during his speech. The question essentially spoke to the possibility of these new regulations causing banks not to lend. In addition, Dimon brought to the forefront the possibility that if the banks do not lend, a new recession may begin.
There is a plethora of negativity on the banks. They have sold sharply in recent months and continue to be under pressure. Many of these stocks are into key technical levels reached in the last few days.
The bottom line is this. The combination of these technical levels and the Crescendo of negativity probably dictate a near term solid bounce. Long plays can be initiated in this general vicinity on stocks like Bank of America, Citigroup, Morgan Stanley (NYSE:MS) and others.
Gareth Soloway InTheMoneyStocks
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