Bove’s Sour Bank Call Cautions Recent Gains (BAC, C, FAS)
What happens when a sector loses a key bull, even if it is temporary? Often nothing, but if it is a big enough market pundit then it can have an impact. That is what we are seeing today in the…
Bove essentially pointed out that the run on banking stocks was on fumes and he expects a short-term pullback in share prices. His thesis is that rational investors would lighten up. But there is still a positive notion here.
Another issue noted by Bove was that the judge’s opposition to approving the SEC settlement by Bank of America Corp. (NYSE: BAC) was actually bad for the entire sector.
The good news is that this is based on a post-rally level. Bove still believes the sector is attractive for the long-term investor.
Bank of America shares are active today and down 4% at $15.94, while Citigroup, Inc. (NYSE: C) was down over 7% at $3.65 today. Effectively these look like healthy pullbacks helped along by an influential analyst who determined that these stocks have gone up too far too fast.
The Direxion Daily Financial Bull 3X Shares (NYSE: FAS) is down 9% at $68.09.
Jon C. Ogg
August 11, 2009
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