Regions Financial Corp (NYSE:RF) – Long term weakness cropping up

Regions Financial Corp (NYSE:RF) opened with a small gap up but failed to sustain the higher levels by the end of the session and closed in the red. The volume at 15 million was slightly lower compared to the average volume of 18 million. The company is enjoying a flurry of upgrades in the recent weeks though the stock has not performed that well in the market. It is just 7.45% away from its 52 week low, which was registered in this January.

Expert breakdown of the RF candlestick chart.

The stock has been upgraded to “buy” from the earlier “neutral” rating by Compass point, with an upgraded target of $11 compared to the earlier $10. The “buy” rating has also been reiterated by Deutsche Bank with the same price target. On the other hand, Citigroup has a “neutral” rating on the stock with a price target of $11 along with the analysts of Nomura, who have the same “neutral” rating with a target of $10.

RF

The last quarterly result reported by Regions Financial Corp (NYSE:RF) in January had an EPS of $0.14, much less the expected $0.21 and revenue of $1.27 billion, 6.6% down on a y-o-y basis. Obviously the markets didn’t take it very well and the stock crashed to $8.60 levels from $10.80 levels in just 2-3 weeks.

Technically, both the short term and the medium term trends are down with a firmly established series of lower highs and lower lows. The most alarming thing for the bulls can be the expansion of volume in the declines and contraction of volume in the rallies, implying distribution by the smart money. The expanding shape of the medium term downtrend shows declines are getting larger compared to the rises and the long term shape points to the probability of a Rounded Top formation, with a huge bearish significance in the coming months.

 

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Culver Stinson

Culver Stinson

Stinson is US Markets Daily’s Senior Producer for News & Public Affairs.