In his "Executive Decision" segment of Mad Money Monday evening, Jim Cramer spoke with Ron Kruszewski, chairman and CEO of Stifel Financial (SF) , the nation's fourth largest equity research firm.
Kruszewski said Stifel is still not very well known, despite being a diversified company that includes a bank, wealth management, fixed-income and research divisions. The company has grown from 600 advisers in 2005 to over 2,300 advisers today.
When asked about interest rates, Kruszewski noted that Stifel will see a 50% rise in the net interest income with just three rate hikes, and most estimates now predict as many as six rate hikes in the pipeline. "Rate hikes are a good thing for Stifel," he added.
Stifel is attracting some of the best talent in the business because it has a great culture that recognizes achievement, he said.
Let's check out the charts and indicators.
In this daily bar chart of SF, below, we can see that prices traded sideways for much of the past 12 months. In recent months prices have made higher highs and lower lows in what could be considered a broadening pattern. Broadening patterns can be continuation patterns (continuing the trend in force before the pattern) or they can be reversal patterns. This example in SF could be a reversal pattern. Prices are trading below the 50-day and the 200-day moving averages.
The On-Balance-Volume (OBV) line shows weakness from early February. The Moving Average Convergence Divergence (MACD) oscillator is crossing to the upside for a cover shorts buy signal.
In this weekly Japanese candlestick chart of SF, below, we can see the past three years of price movement. Prices have turned from an uptrend to a sideways to a downtrend. Prices are below the now declining 40-week moving average line.
The weekly OBV line looks like it peaked in February after a long rise. The MACD oscillator has made a long decline and is close to the zero line showing us little in the way of trend strength.
In this daily Point and Figure chart of SF, below, we can see a downside price target of $59.
In this weekly Point and Figure chart of SF, below, we can see a potential downside price target of $40.
Bottom line strategy: Like many other charts of financials, SF looks vulnerable to further declines. Avoid the long side.
