At the Christmas week low shares of $STT were off 50% from their all time high set back in January of 2018. This steep sell off drove the stock to its deepest oversold reading(Weekly MACD) since the 2009 lows.
$STT has not been this far below its 40W moving average since Q3 of 2011.
Following its Oct. 19th post earnings breakdown(biggest single day decline of ’18), $STT blew out major support near the 2014/2015/2016 lows.
Since the late November low the stock has been tracing out a divergent MACD(daily) low.
As this week comes to an end $STT is bumping up against a key overhead trendline(links Oct/Dec highs) as well as a declining 50 day moving average. Since late March the stock has spent nearly all of its time below the 50 day.
We believe the stock may have entered downside exhaustion territory over the last six weeks. If so, a powerful rebound could be on the way. Initial support is in place near last week’s high($64.25). A close below $61.60 would violate the December lows sending a clear warning sign that more basing will be needed before $STT can mount a significant rebound.
Banks/Financials will be reporting earnings en masse next week. The State Street release is due Friday morning(1/18). The tone for the sector will be set by then. An interesting week is ahead.
At time of publication we do not have a position in STT.