Friday, March 21, 2008

Is the Bottom in for Bank Stocks?

With the value of bank stocks falling precipitously for numerous weeks and their dividend yields reaching highs not seen in recent memory, eager dividend investors jumped back in after the Fed cut announcement, causing a quick rebound in the bank share values.

Here are the 5-day hourly charts for the bank stocks that I follow for future reference:

Bank of Montreal:


Royal Bank of Canada:

Bank of Nova Scotia:

TD Bank:

National Bank of Canada:

Canadian Western Bank:


Bank of America:

But with headlines like "BMO, Scotiabank and Royal Bank likely to issue more capital: Citigroup" on FP Trading Desk still making the news, it makes you wonder if this is just a sucker rally (in an attempt to raise more capital at higher valuations) or the real deal.

I missed out on this week's big bounce so I'll wait to see if another shoe drops before initiating positions for the first time ever in these very tempting dividend-yielding stocks.

No comments: