First Republic Bank (NYSE: FRC)

First Republic Bank, together with its subsidiaries, provides private banking, private business banking, real estate lending, and wealth management services to clients in metropolitan areas in the United States. It operates through two segments, Commercial Banking and Wealth Management.

Take a look at the 1-year chart of First Republic Bank (NYSE: FRC) below with added notations:

FRC has stalled at the same $106 resistance area (red) multiple times over the past eight months. The stock has recently rallied towards that mark, and now it sits just a few ticks below that $106 level. A solid close above the resistance should lead to another leg higher for FRC.

The Tale of the Tape: FRC has a 52-week resistance at $106. The possible long position on the stock would be on a breakout above that level with a stop placed under it.

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