Comerica Incorporated, through its subsidiaries, provides various financial products and services. The Business Bank segment offers various products and services, such as commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services, and loan syndication services to middle market businesses, multinational corporations, and governmental entities. The Retail Bank segment provides small business banking and personal financial services, including consumer lending, consumer deposit gathering, and mortgage loan origination. The Wealth Management segment provides products and services comprising fiduciary services, private banking, retirement services, investment management and advisory services, and investment banking and brokerage services.
Take a look at the 1-year chart of Comerica (NYSE: CMA) below with the added notations:
CMA has been in an overall, downward move over the past 10 months, and during the majority of that time the $40 price level (red) has become very important to the stock. You will notice on the chart above that $40 was a key support for the last part of 2015, and then that level was resistance in both March and now April. A break above that mark should lead to higher prices for the stock.
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The Tale of the Tape: CMA has a key level at $40. A trader could enter a long position on a pullback to $40 with a stop placed under the level. However, if traders are bearish on the stock, a short trade could be made instead on a break of the $40 support.
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!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach