Goldman Sachs on Monday broke out of its downtrend that was in place since November of 2021. On Monday July 18, 2021 Goldman Sachs reported earnings and the stock rallied to a high of $311.25 and pulled back during the trading day. We initially thought that was because $311 is near the resistance level that had been in place since November of 2021. On Tuesday July 19, 2022 GS again had a large up day, and that too on heavy volume. The breakout to an intraday high of $319.14 was a more visible sign that the stock may be turning around, and that breakout happened on heavy volume confirms our belief that GS stock is headed higher.

Similar to GS, BAC too has broken a downtrend that had been in place since 2/10/2022. BAC also like GS reported earnings on Monday July 18, 2022. On Friday July 15, BAC stock closed near our calculated resistance level based on the downtrend since February, and when earnings were reported on Monday the stock did not retreat below the resistance levels we had calculated. Instead the stock has been trading higher, and has help above its resistance level since Friday. We think a sentiment change has occurred in BAC.

With interest rates going higher BAC reported higher net interest income. BAC has the largest holder of deposits of the money center banks, so makes sense that they are making higher income on lending out yours and mine dollars deposited.

WFC will be the last bank stock we noticed breaking a downtrend. WFC reported earnings on July 15, 2022, and like GS and BAC it also has broken its downtrend that had been in place since February of 2022.

MS, C, and JPM are other bank stocks we think could be bucking the downtrend and could trade higher. GS and MS are both investment banks, and current market conditions have led to lower investment banking fees, hence less revenue for their investment banking business. However on the trading aspect of the investment banks, higher volatility leads to more revenue for their equity and bond trading desks.

The money center banks, as mentioned above in regards to BAC, are in an environment to make higher margins on interest rates. One little bright spot in their businesses.