Boston, MA 09/18/2014 (wallstreetpr) – Regions Financial Corp (NYSE:RF) (Closed: 10.38, Up: 1.67%) saw a midday spurt on Wednesday with a huge spike in volume at 25.5 million against the average of 12.6 million. The daily candle engulfed the entire price action of the previous three sessions and would be stronger of not for the profit booking seen in the dying moments. The stock is only 9% away from the 52 week high of $11.43 and just a few good sessions would be enough for the stock to make a new high.
The last long term rally from the 2011 bottom of $2.82 made a high at $11.54 in March 2014 and had the biggest correction. The first two corrections in 2012 were limited to $1.50 in magnitude and when the third intermediate correction came in 2013, it almost remained in the same range, overshooting it by only 15-16 cents. But the last correction from the March 2014 top of $11.54 hit a low of $9.65 in August, about $1.89 in magnitude. This increase in the size of the correction suggests a larger corrective period, from the perspective of time too.
But the bears tend to be trapped in this stock again and again. On the weekly charts, a clear Head & Shoulder was formed in the period of January 2014 to June 2014, with the neckline at $9.80. It was broken down in the second week of August but the downside was limited to only 15 cents before the price reversed and a panic short covering was seen. The bearish pattern of Head & Shoulders is said to fail when the trendline connecting the head and the right shoulder is broken above. In the current case, the said trendline stands at $10.55-60 and may have been the reason the stock faced profit booking last session.
Investors may keep a sharp watch on the stock and invest in it whenever it manages to close above $10.60.
