Old National Bancorp operates as the holding company for Old National Bank that provides various financial services to individual and commercial customers in the United States. The company offers deposit accounts, including noninterest-bearing demand, negotiable order of withdrawal, savings and money market, and time deposits; and loans, such as home equity lines of credit, residential real estate loans, consumer loans, commercial loans, commercial real estate loans, letters of credit, and lease financing.
Take a look at the 1-year chart of Bancorp (NASDAQ: ONB) below with added notations:
Over the past two months, ONB has fallen into a sideways trading range. While in the range, the stock has formed a common pattern known as a rectangle. The pattern has formed a resistance at $17.50 (red), and a $16 support (green). At some point the stock will have to break one of the two levels.
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The Tale of the Tape: ONB is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $16 or on a breakout above $17.50. The ideal short opportunity would be on a break below $17.50.
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