U.S. Bancorp (NYSE: USB)

U.S. Bancorp, a financial services holding company, provides a range of financial services in the United States. Its services include lending and depository services, cash management, capital market, and trust and investment management services. The company also engages in credit card services, merchant and ATM processing, mortgage banking, insurance, brokerage, and leasing. Its lending services include traditional credit products, as well as credit card services, leasing, financing and import/export trade, asset-backed lending, agricultural finance, and other products. The company’s depository services comprise checking accounts, savings accounts, and time certificate contracts. It also offers ancillary services, such as capital market, treasury management, and receivable lock-box collection services to corporate customers; and a range of asset management and fiduciary services for individuals, estates, foundations, business corporations, and charitable organizations. In addition, the company provides Visa corporate and purchasing card services, and corporate trust services.

To review Bancorp’s stock, please take a look at the 1-year chart of USB (U.S. Bancorp) below with my added notations:

1-year chart of USB (U.S. Bancorp)

USB has been trading mostly sideways for the last 3 or 4 months. Over that period of time, the stock has formed a resistance area around $37.50 (red), In addition, the stock has also created a strong level of support at $35.50 (blue). At some point the stock will have to break one of those two levels.

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The Tale of the Tape: USB has identifiable levels of support and resistance. The possible long positions on the stock would be either on a pullback to $35.50, or on a solid close above $37.50. The ideal short opportunities would be on a break below $35.50.

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

Follow me on Twitter: @cmtstockcoach