M&T Bank Corporation operates as the holding company for M&T Bank and Wilmington Trust, National Association that provide commercial and retail banking services. The company’s Business Banking segment offers deposit, lending, cash management, and other financial services to small businesses and professionals. Its Commercial Banking segment provides commercial lending and leasing, letters of credit, deposit products, and cash management services to middle-market and large commercial customers. The company’s Commercial Real Estate segment offers credit services, which are secured by various types of multifamily residential and commercial real estate properties, as well as deposit services. Its Discretionary Portfolio segment provides securities, residential mortgage loans, and other assets; short-term and long-term borrowed funds; brokered deposits; and Cayman Islands branch deposits, as well as foreign exchange services. The company’s Residential Mortgage Banking segment originates and services residential real estate loans and sells those loans in the secondary market; and purchases servicing rights to loans originated by other entities. Its Retail Banking segment offers demand, savings, and time accounts; consumer installment loans, automobile loans, home equity loans and lines of credit, and credit cards; mutual funds and annuities; and other services.
Take a look at the 1-year chart of M&T (NYSE: MTB) below with added notations:
MTB has been trading mostly sideways over the past 2 months. While in the sideways move, the stock has formed a clear resistance at $120 (red) and a solid support at $112.50 (green). At some point, the stock will have to break out of the current trading range.
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The Tale of the Tape: MTB is trading within a large sideways range. The possible long positions on the stock would be either on a pullback to $112.50 or on a breakout above $120. The ideal short opportunity would be on a break below $112.50.
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!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach