SunTrust Banks, Inc. (NYSE: STI)

SunTrust Banks, Inc. operates as the holding company for SunTrust Bank, which provides various financial services in the United States. It’s Retail Banking segment offers consumer deposits, home equity lines, consumer lines, indirect auto, student lending, bank card, and other consumer loan and fee-based products. Its Diversified Commercial Banking segment provides commercial lending, financial risk management, capital raising, commercial card, and other treasury and payment solutions. The Commercial Real Estate segment offers construction, mini-perm, and permanent real estate financing; capital raising services; financial risk management; treasury and payment solutions; and investment advisory and management services, as well as tailored financing and equity investment solutions. Its Corporate and Investment Banking segment provides investment banking products and services, such as strategic advice, capital raising, and financial risk management; and traditional lending, leasing, treasury management, and institutional investment management services. The Mortgage segment offers residential mortgage products. Its Wealth and Investment Management segment provides brokerage, professional investment management, and trust services. The company also offers mortgage banking, credit-related insurance, asset management, securities brokerage, and capital market services.

To review Suntrust’s stock, please take a look at the 1-year chart of STI (SunTrust Banks, Inc) below with my added notations:

1-year chart of STI (SunTrust Banks, Inc)

STI has formed a clear resistance at $25 (red), which would also be a 52-week high breakout if the stock could manage to break above it. In addition, the stock is climbing a short term, up-trending support level (blue) over the last (2) months. These two levels combined have STI stuck within a common chart pattern known as an Ascending Triangle. Eventually, the stock will have to break one of those (2) levels.

The Tale of the Tape: STI has formed an up-trending support and a 52-week resistance level to watch. A long trade could be made on a pullback to the support, or even better, on a break above $25. A break below the up trending support should be an opportunity to enter a short trade.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!

Christian Tharp, CMT