52-Week Lows Soon Gone in Banks (BAC, C, JPM, WFC, FAS)

There is a common search that value investors, momentum investors, growth investors, and traders all look through for various price screens to help on deciding when to a buy or sell a stock.  The problem is that many key stocks have 52-week lows which in many cases have seen exponential gains since those prices were hit.  The magical day for most stocks, and certainly for the indexes is March 9, 2010.  Here we sit less than one week away from the date that many 52-week lows will no longer reflect the inflection point in 2009.  We wanted to see how this would affect many share prices in analyzing the 52-week lows when we go our one week beyond the 52-week lows.  We then wanted to look out two weeks and then one month.

We have looked at Bank of America Corporation (NYSE: BAC), Citigroup, Inc. (NYSE: C), JPMorgan Chase & Co. (NYSE: JPM), and Wells Fargo & Company (NASDAQ: WFC) as the key money center banks.  If you go further down the quality chain, the results are even more skewed.  That is why we included the triple-leverage Direxion Daily Financial Bull 3X Shares (NYSE: FAS).  All figures are below…

Bank of America Corporation (NYSE: BAC) was at $3.74 on March 9, but it closed at $31.13 and $31.16 the two trading days before that.  Literally one week later it closed at $6.17 and two weeks later it closed at $7.78.  A month after the March 9 low is closed at $9.53 before trading up to $11.00 and then back under $9.00 before making its move higher.

Citigroup, Inc. (NYSE: C) is still a very low priced stock but it is always active.  Citi got so bad the week before March 9 that it broke under a buck to $0.97 but never really closed under the $1.00 mark.  On March 9, 2009 it closed at $1.05.  A week later it was at $2.33 and two weeks later it was at $3.13.  On April 9 shares were at $3.04.

JPMorgan Chase & Co. (NYSE: JPM) is the best of the best banks.  On March 9, 2009 its shares hit $15.81 for the close. A week later its shares were at $22.96 and two weeks later shares were at $28.70.  On April9 shares were at $32.62.  There was never a period in any recent years or anywhere close to what we saw in the best capitalized and best run bank.

Wells Fargo & Company (NASDAQ: WFC), Warren Buffett’s favorite bank, closed at $9.89 on March 9, 2009.  A week later it closed at 13.60 and two weeks  later it closed at $17.20.  By April 9 its stock had closed at $19.46.

The biggest changes will come in the Direxion Daily Financial Bull 3X Shares (NYSE: FAS) as the triple leverage ETF.  Things got bad enough that Direxion had to reverse split.  At $76.81 now, its 52-week range is $11.60 to $94.54.  Its March 9, 2009 close was $13.42.  One week later it was at $24.21, and two-weeks later it was at $35.20.  By April 9, 2009 it was back at $43.41.

In another month these stocks are still going to look as though they are much higher than their trailing 52-week lows.  The difference is that these stocks will no longer trade exponentially above their 52-week lows.  This has also started to take a large bite into the 200-day moving averages of many key stocks as their old much lower prices are being replaced by today’s much higher prices.

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JON C. OGG