SunTrust Banks, Inc. ($STI) has seen a nice run of strength the last two months, rallying from $23.23 to $30.80 during this stretch of time. With the recent push through resistance, the curret pull-back could be a prime swing buying opportunity. Here’s why..
The PEMA Pull-Back
A new Long signal has fired in $STI in the daily timeframe using the PEMA Pull-Back system. This system uses two pivot-based EMAs to carefully measure pull-back opportunities.
The last three signals in this stock have been dead-on, and the current signal actually looks much better from a technical standpoint. Therefore, we could see a bullish multi-day swing move toward the May 2010 high of $32.00 soon.
If price closes above $29.00 today, this will be important confirmation that more strength may indeed be ahead.
You can read more about the PEMA Pull-Back setup HERE.
Confluence
The $27.50 – $28.00 zone offers a major area of confluence in this chart. First, $27.75 was major resistance that had held since last May and was recently broken during the current advance. This zone is now serving as short-term support.
Second, price is testing the monthly pivot range from above, which is very bullish when in the midst of a bull run. This range is seen as a “buy the dip” zone in a trending market.
Next, the $28.00 level is also the 38% Fibonacci Retracement level, as measured from the November low to the January high. Price tested this level to the penny during Friday’s market before rallying into the close, thereby creating a bullish candlestick wick. Clearly, responsive buyers are finding value below.
Indeed, the signs are there for a short-term swing higher to the $32.00 target. If price continues to hold above $28.00 and can close above $29.00, there’s a good shot at more strength ahead for this stock.
Book Tour in Austin!
Here’s a reminder that I’ll be speaking to the Austin Association of Financial Traders (AAFT) in Austin tomorrow, January 11. I’d love to see you there!
Date: Tuesday, January 11
Time: 6:30PM to 8:30PM
Location: Austin City Energy Building
721 Barton Springs Road, TLC Room 130
Austin, TX 78704
Topics to be covered include:
Two-Day Pivot Relationships
Pivot Width Forecasting
Pivot Trend Analysis
Multiple Pivot Hot Zones
And MORE!
Let’s see how SunTrust turns out!
Cheers!
Frank Ochoa
PivotBoss.com
Follow Frank on Twitter: http://twitter.com/PivotBoss