PNC Financial Services Group Inc. (PNC) lost half its value in less than three months. It takes your breath away but this happened to other financial institutions this year, although not all of them. The big difference with the charts of PNC and other banks was a break down from a large double-top formation.
Let's check out the charts and indicators of PNC, which is a topic of discussion today in Doug Kass's Daily Diary on Real Money Pro.
In the daily Japanese candlestick chart of PNC, below, we can see a less-than-robust picture. Prices are below the declining 50-day moving average line and the declining 200-day moving average line. We can also see a bearish death cross of the 50-day and 200-day averages in March. The candlestick chart does not show me any strong reversal patterns nor do I see lower shadows telling me that the lows are being rejected.
The On-Balance-Volume (OBV) line turns down in the middle of February and is still pointed down telling us that aggressive sellers still dominate. The 12-day price momentum study shows a small bullish divergence in March as prices made a lower low but momentum made a higher low. This small signal was a green shoot but upside momentum has been very weak this month.
Bottom-line strategy: In full disclosure I do have a banking relationship with PNC, however, I would not recommend the long side of the stock. With a downtrend on the OBV line and a bearish price target from the Point and Figure chart I cannot make the case for a purchase.