This is a special update to my recent coverage of the banks in #419 on the 30th September of the Radar Newsletter. There I illustrated the danger, and possibility, of them falling below big key support zones that the banks have recently been hovering above, yet I remained long all of them as the were holding this key support. Thankfully they haven’t dropped below those supports. Thus I had entered a technical trade above this key low area. I am starting to see now why being long the banks may not be such a bad trade idea as prices keep on edging higher and higher.
I recently came across this article on Bloomberg Short interest has once again spiked in Australia’s biggest banks and then I saw the recent comments by smart operator Wilson Asset Management (WAM) Portfolio manager Matthew Haupt in the AFR (24/11/16) suggesting WAM was falling in love with the banks again. In reality they have been keeping the ASX/200 up recently along with the big miners of BHP RIO and WPL as the rest of the market looked decidedly weak with the breadth being completely knocked out of it. So my take, when I see the ‘shorters’ getting active again, remember if they get it wrong they have to chop out quickly causing a short squeeze and more upward pressure on share prices, and within a background of big support just below current bank share prices and a few whispers from the ‘smart money’ that the banks are perhaps ready to rally, I get a warm contrarian glow. Below are the charts. What do you think? Note 5 of the top ten stocks in the ASX/200 are now banks with MQG jumping in as it has surged higher recently.
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