This article is for education purposes only, and not to be taken as advice to buy/sell. Please do your own due diligence before committing to any trade/investment.
The banking saga is far from over.
Regulators in the US are paying more attention to the banks in a bid to avoid a repeat of the meltdown.
As investigations continue, the shares of most banks are being dumped.
Today, you’ll be discovering if the shares of PNC Financial Services provide a shorting opportunity.
Brief History of PNC Financial Services
Source: pnc.com
PNC Financial Services was founded in 1852.
In the period of the Great Depression, PNC Financial Services began offering loads to consumers with a simple approval process. It was such a phenomenon that other banks followed suit.
Over time, through mergers and acquisitions, PNC Financial Services grew to become the behemoth it is today, with a market capitalization of more than $45b.
Business Model and Financials
Source: tradingview.com
In this section, we will do a quick fundamental check.
What do you notice about PNC Financial Services’ total revenue represented by the bars in blue?
Its total revenue increased from 2017 to 2019 before taking a hit in 2020 due to COVID-19. It has since recovered and even surpassed its best year in 2019!
Can the same be said of its net income (shown by the bar in yellow)?
After growing by 37% in 2017, it stagnated in 2018 and 2019 before exploding 40%. Since then, its net income has been inconsistent despite a healthy growth in its total revenue.
This is potentially a cause for concern.
Therefore, are the shares of PNC Financial Services a good candidate for a short position trade?
Technical Analysis on PNC Financial Services (NYSE: PNC)
When you’re looking for shorting opportunities, you’re looking for stocks that are likely to fall in price, and continue for a while to help you profit.
Looking at the daily chart of PNC Financial Services, you can tell that it’s in a downtrend.
Without having to plot support and resistance zones, you can tell that the time to short its shares is ripe.
How?
By looking at these 2 indicators: red arrow and Trend Impulse Factor.
For a short trade that’s ripe, you’ll want to see a red arrow above its latest candle and its Trend Impulse Factor bar in dark green.
This is because the red arrow indicates a fresh downtrend, while the dark green bar of its Trend Impulse Factor indicator suggests that the bearish momentum is here to stay.
And both indicators are showing that the time to short PNC Financial Services’ shares is here!
Conclusion
Source: unsplash.com
PNC Financial Services started off nearly 200 years ago and has been growing steadily to become such a behemoth.
The bank’s net income has been fluctuating, and this doesn’t bode well.
Looking at its price chart, a shorting opportunity is present.
Both the arrow and Trend Impulse Factor indicator have been tested and proven. They form the TradersGPS (TGPS) system to help you decipher if a stock is ripe for a position trade. You won’t have to feel in the dark and make wild guesses.
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