In his first Executive Decision segment of last Friday's "Mad Money" program, host Jim Cramer spoke with Steve Steinour, chairman, president and CEO of Huntington Bancshares (HBAN) , an Ohio-based bank that last Friday released better-than-expected fourth-quarter earnings on weaker-than-expected revenue.
Steinour said Huntington has a great deposit base and that rising interest rates will only add to its profitability. He said he also was encouraged by falling COVID hospitalization rates in Huntington's service area, which finally may be signaling that the pandemic is winding down.
Let's check on the charts and indicators of Huntington.
In this daily bar chart of HBAN, below, we can see that prices plunged sharply last week, gapping lower and breaking below the 50-day moving average line while testing the 200-day line all in the same day. The On-Balance-Volume (OBV) line turned lower as traders became more aggressive sellers. It looks like the uptrend in the OBV line has been broken. The Moving Average Convergence Divergence (MACD) oscillator crossed to the downside for a take profit sell signal.
In this weekly Japanese candlestick chart of HBAN, below, we can see a top reversal pattern over the past three weeks. Prices are poised to break below the 40-week moving average line. The weekly OBV line has generally followed the price action but it made a lower high since November when prices made a higher high; this is a bearish divergence. The MACD oscillator also made a bearish divergence and has crossed to the downside for another take profits sell signal. This indicator is only slightly above the zero line and an outright sell signal.
In this daily Point and Figure chart of HBAN, below, we can see a downside price target of $13. A decline to $13 will do serious damage to the chart, in my opinion.
In this weekly Point and Figure chart of HBAN, below, we can see the software is still projecting an upside price target. A trade at $14.13 or lower is likely to turn this chart bearish.
Bottom line strategy: While management may paint an optimistic picture of the fundamentals for HBAN, the charts tell me another story. Avoid the long side.