Which Bank Is Next On Our Trading Watchlist? Find Out Now

All eyes are still fixed on the banking industry as more banks decline or climb in the wake of more failures. However, the bank at the focus of today’s stock pick is not one of those that is in danger of collapsing, at least not yet that we know of.

M&T Bank (MTB) has set us up with a clean channel with the bottom of that channel being a strong level of support as evidenced by the testing of that price a couple times in the past. After an initial look at the chart in the video below, a reasonable trader may think that there could be a bounce coming at the support level of 110, but this could be invalidated very easily with a breakdown of that level. So what’s the higher probability trade?

As of now, we have already bounce on this support level a couple of days ago, meaning if the stock came back down to this level one more time, the possibility of another bounce could be much lower. Each time price comes down to this level, imagine a floor that is getting weaker and weaker. This is where gauging price action is so crucial.

If there is a breakdown of this level and it provides little support then we could see a drop to 100 very easily, but if we show signs of putting in a meaningful bottom, we could see price climb back up to 130 in a hurry. We also have to keep in mind what the overall market is doing, as well as the financial sector. With the sentiment of the financial sector being mixed still, the highest probability trade is still a little murky.

This is one of those trades where you really want to pay attention to price action at or near these important levels. For now, keep an eye on a bounce of this support level until it is broken in a meaningful way, then look to short the stock to 100.

Learn to find these levels for yourself when you join The Profit Machine. There, you’ll learn all about my favorite stocks, setups, strategies, and plenty more. You’ll also be invited to weekly webinars where I answer questions and go over important trading lessons, like the one in today’s article. The best part, you’ll also receive live trade alerts. Not only will you get a world-class education, but you’ll earn while you learn.