Don't Bank on BB&T Gaining More Ground

 | Mar 17, 2017 | 11:25 AM EDT
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BB&T (BBT) benefited from strong buying in the wake of the presidential election, but the advance has slowed since late December and it looks like the next leg to the upside will need a longer wait until it can get going. A review of our indicators should explain what we mean.
In this daily bar chart of BBT going back 12 months, above, we can see that BBT had a slow rise from June to early November and then the floodgates opened after the election. November/December was a strong period for BBT, and since then prices have pushed up to a new high in February.
BBT has been testing the slightly rising 50-day moving average line this week and a break of this mathematical trend line would not be a surprise. The 200-day moving average line is rising, but at a comfortable distance below the price action. The On-Balance-Volume (OBV) line moved up from March to December but has been stuck in neutral since. A bull market needs increasing buying interest, and so far BBT has not seen that this year.
In the lower panel we see a bearish divergence, with lower highs on the momentum study from November to February versus higher price highs in the same time frame. This divergence tells us that price gains have slowed.
In this weekly chart of BBT, above, we can see that BBT had a neutral trend until 2016. Prices moved above and below the 40-week moving average line, but this year it is firming above the rising 40-week line. The On-Balance-Volume (OBV) moved up during most of the sideways trend and then went sideways when BBT weakened in late 2015. The line remained in a sideways trend in 2016 until the election.
Overall I would consider the OBV line bullish. The Moving Average Convergence Divergence (MACD) oscillator is a trend-following indicator in my opinion and it has turned down on BBT. The MACD oscillator tells us we should be taking profits on longs.
Bottom line: If you are long BBT you will need to be patient and maintain a stop at a close below $45. If you are looking to go long BBT, I think you can take your time.

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