A New 52-Week High For BBT

04/26/12 09:39:36 AM

by Koos van der Merwe

Bank stocks have simply not been performing, but there are the exceptions.

Security: BBT
Position: Accumulate

BB&T Corp. (BBT) is an American bank with assets of US$157 billion (as of March 2011). The bank offers commercial and retail banking services along with other financial services such as insurance, investments, retail brokerage, mortgage, corporate finance, consumer finance, payment services, international banking, leasing, and trust. Unlike the better-known banking names like Bank of America and Citigroup, the share price is making new highs. Is it worth adding to your portfolio at its present price?

FIGURE 1: BBT, DAILY. This chart shows vote line buy signals.

Graphic provided by: OmniTrader.

Figure 1 shows the following:

a. A rise in price from a low of $18.93 in August 23, 2011, to a high of $29.69 by March 28, 2012.
b. A buy signal given by the vote line on April 12 based on buy signals given by the Verve trailing stop and red-green long strategies.
c. The relative strength index (RSI) moving up, suggesting further strength ahead.
d. The ergodic oscillator giving a buy signal.
e. Rising volume as the price strengthened, suggesting strength.

Volume did, however, fall on the last day of trading as the price formed a strong white candlestick body with no lower shadow. This type of candlestick pattern may indicate an up reversal with confirmation the next day.

FIGURE 2: BBT WITH ELLIOTT WAVE ANALYSIS

Graphic provided by: AdvancedGET.

Figure 2 shows the Elliott wave count, suggesting that an early wave 5 has been completed, with a possible alternate wave 5 target of $32.29 should the price move strongly higher. The JM internal band is suggesting a possible buy signal, as the price looks as though it broke above the upper band with trading on April 24, a price not shown on Figure 1. Note also that the XTL trend indicator has the candlestick as blue, suggesting strength. Finally, note that the RSI appears to be moving sideways after having formed a V-bottom on April 10, not a customary RSI 14-period buy signal, but a buy signal based on a nine-period RSI.

I would be a buyer of BBT Corp. on any and every correction as long as the price does not fall below the lower band of the JM internal band. Should this happen, a review of the technical data would be necessary.

Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.

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