Banks' earnings have peaked this quarter
Keep an eye on Barclays (BARC) over the next month or so, given the recent slip in US banking stocks and Germany's Deutsche bank.
Some analysts believe banks' earnings will have peaked in the third quarter, meaning the fourth quarter earnings will likely fall on a quarter-on-quarter basis, particularly if the US housing market starts to wane.
Talk in the German press that the UK's Chancellor of the Exchequer is considering imposing a tax on financial transactions will not help the sector either.
Barclays share price action also signalled a dead-cross with not only the 20 and 50 day exponential moving averages negatively intersecting, but also the eight and 20 day simple moving averages.
Over the last 15 months Barclay's stock has recovered very well given its ability to avoid government capital/control.
However, the market feels like it is ready to bash the sector and accordingly Barclays looks ripe to sell. Resistance should come at 350p-370p while support should come in at 250-260p and through here possibly as low as 200p.
Update
Ocado (OCDO) – Suggested to sell at 139.25p, the shares closed yesterday at 134.7p following a further broker downgrade. Waitrose's move into delivering to London addresses come January will probably further reduce investors appetite for this stock.
Vedanta (VED) – Suggested to sell at 1980 with a view that it was likely to spike upwards possibly up to 2500p, the shares closed yesterday at 2261p. Sit tight as there have been negative corporate developments which could bring this idea back into profit. A close above 2500p would invalidate this idea.
Victrex (VCT) – Suggested to sell at 1076p, the stock closed yesterday at 1286p. Not ideal but hold on unless 1320p is broken.
The writer does not hold any shares or derivatives in the above mentioned companies. The material for this report comes from Alpha Terminal
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