Credit Suisse (CS) has gotten unwanted media attention recently as bankers, investors, and probably central bankers have been worried about its financial health and what risks may lurk behind closed doors or in leveraged accounts.
Let's check out three charts.
In this daily bar chart of CS, below, we can see that the price of CS has been in a persistent downward trend the past 12 months. Traders and investors have been selling the stock for months now. CS trades below the declining 50-day moving average line and is roughly at 50% of the intersection of the declining 200-day moving average line.
The On-Balance-Volume (OBV) line is in a downward trend and confirms the price decline as traders are more aggressive sellers. The Moving Average Convergence Divergence (MACD) oscillator is in a bearish alignment below the zero line.
In this weekly Japanese candlestick chart of CS, below, we can see a weak market. Prices are in a longer-term downtrend below the bearish 40-week moving average line. The candles do not show us any meaningful bottoming action nor large lower shadows.
The weekly OBV line is bearish and so is the MACD oscillator.
In this daily Point and Figure chart of CS, below, we can see a potential downside price target in the $3.19 area.
Bottom line strategy: I have no special knowledge of what the head of CS is doing to get their house in order, or any special knowledge of what is on their books or positions their traders have put on. What I do know is that investors and clients of financial institutions like well run firms and a wire transfer is easy to accomplish when confidence goes out the door.
Avoid the long side of CS as further declines are possible.
