SVB Financial Group, a diversified financial services company, provides various banking and financial products and services. Its Global Commercial Bank segment offers deposit products, such as business and analysis checking accounts, money market accounts, and multi-currency and sweep accounts, as well as lockbox, electronic deposit capture, and merchant services. The company’s SVB Private Bank segment offers private banking services, including mortgages; home equity lines of credit, restricted stock purchase loans, capital call lines of credit, and other secured and unsecured lending services. Its SVB Capital segment provides venture capital investment services that manage funds on behalf of third party limited partners.
Take a look at the 1-year chart of SVB (NASDAQ: SIVB) below with added notations:
After starting from a $83 low back in June, SIVB rallied up to a $180 high at the beginning of 2017. After that, the stock hit that $180 as resistance again (green), forming a clear 52-week high resistance at that level. Earlier this week, the stock finally managed to hold that level, which should lead to even higher prices overall.
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The Tale of the Tape: SIVB broke its 52-week resistance at $180. The possible long position on the stock would be on a pullback down to that level with a stop placed under it. A break back below $180 could negate the forecast for a move higher.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach