Don't Bank on United Security Bankshares

 | Mar 30, 2016 | 2:40 PM EDT
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United Security Bankshares (USBI) stock was downgraded by's quantitative service today, which doesn't help a deteriorating technical backdrop on the company's charts.

This chart of USBI, above, is an interesting "study" of supply and demand. Demand for USBI appears to develop every time the stock declines to around $8 -- buyers come in and the stock bounces. The supply side of USBI is another issue. Notice how the rallies have been stopping at lower and lower highs -- first at $9.75, then $9.25, then $9 and finally a little above $8.50. Sellers of USBI have been getting more aggressive. Prices are below the 50-day and 200-day averages and the 50-day crossed below the longer one. The On-Balance-Volume (OBV) line is roughly pointed down and the momentum study isn't offering any positive clues. 

A hundred and fifteen years ago, Charles Henry Dow might have called USBI's narrow pattern a "line formation" with prices staying in a tight range. With this chart's OBV line pointed down since July, we anticipate that the price of USBI will eventually break the support around $8 and head lower.

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