Don't Go 'Bottom Fishing' With These Two Regional Banks

Regional banks are feeling the heat from investors... The mid-March collapses of Silicon Valley Bank and Signature Bank kick-started the trouble. And the fall of First Republic Bank brought this space back into the spotlight last week... [Chaikin PowerFeed]( Don't Go 'Bottom Fishing' With These Two Regional Banks By Pete Carmasino, chief market strategist, Chaikin Analytics Regional banks are feeling the heat from investors... The mid-March collapses of Silicon Valley Bank and Signature Bank kick-started the trouble. And the fall of First Republic Bank brought this space back into the spotlight last week... The SPDR S&P Regional Banking Fund (KRE) is down more than 40% since early February. Investors are clearly shaken. And on every sign of weakness, regional-bank stocks tumble. On the flip side, exploiting weakness is a short seller's favorite pastime... Short selling is a simple concept to understand. An investor bets against a stock he thinks will fall. And he hopes to book a profit when the stock trades at a lower price in the future. With so much uncertainty... the regional-banking space is full of short-selling targets. Now, more than ever, it's critical for investors like us to know which banks are under threat. So today, I'm "pulling back the curtain" to show you how the Power Gauge can help... Recommended Links: [What We're All Watching This Week]( It's an event 20 times BIGGER than the bank collapse of 2023... because over HALF of the U.S. stock market ($10 trillion) is set to move in a matter of weeks from now. This critical moment will send some stocks soaring... while slashing others up to 90%. It's time to protect your money now. [Click here while there's still time](. [Sell This Popular Stock NOW]( Over 1 million people around the world follow 50-year Wall Street veteran Marc Chaikin for his surprisingly accurate stock predictions. And he just gave them an urgent SELL ALERT for one of the most popular stocks in U.S. history. He says, "After years of breathtaking gains, this company's day in the sun is coming to an end. You must sell this stock – NOW!" [Get the ticker here](. In short, the Power Gauge includes a screener that can help us focus on specific criteria. For example, we can look at all the banks with a "very bearish" grade in the short interest factor. And we can search for weak ratings in the relative strength over the past month. Here's what I found when I ran this search last Tuesday morning... [Chaikin PowerFeed] As you can see, 18 bank stocks met my criteria. And none of them were "bullish" overall. You'll also notice that one bank didn't have any price action that day – First Republic Bank (FRC). That's because it was no longer trading at all... As we now know, [First Republic became the second-biggest bank failure in U.S. history](. And megabank JPMorgan Chase (JPM) struck a deal with the government to "rescue" it. Two other West Coast banks stand out in this list of big short-seller targets... 1. PacWest Bancorp (PACW) 2. Western Alliance Bancorporation (WAL) The Power Gauge ranks PacWest as "very bearish" today. That's definitely a stock to avoid. The system's "neutral+" rating for Western Alliance might seem like a good thing at first. After all, we've told you in the past that this rating generally involves an optimistic outlook. But in this case, the real-world details matter. And Western Alliance is in a tough spot... It suffers from the same overly tight margins as the now-failed First Republic. So any fast movement of investor capital out of the bank will act like a land mine on its share price. The bottom line is simple... I'm not wishing for another bank failure. I'm only following what the Power Gauge tells me. A lot of short sellers are circling regional banks right now. That tells me the industry is still under threat. With all the ongoing volatility, it's not time to go "bottom fishing." I recommend you steer clear of this space for now – especially the two banks I mentioned. Good investing, Pete Carmasino Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 +1.63% 11 15 4 S&P 500 +1.83% 144 277 77 Nasdaq +2.12% 47 44 9 Small Caps +2.41% 375 986 518 Bonds -0.33% Energy +2.74% 0 12 11 — According to the Chaikin Power Bar, Large Cap stocks are more Bullish than Small Cap stocks. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Information Technology +0.27% Utilities +0.07% Health Care +0.04% Staples -0.34% Discretionary -0.45% Industrials -0.49% Real Estate -0.82% Materials -1.10% Financial -2.56% Communication -2.62% Energy -5.73% * * * * Industry Focus Oil & Gas Exploration & Production Services 0 36 22 Over the past 6 months, the Oil & Gas Exploration & Production subsector (XOP) has underperformed the S&P 500 by -33.50%. Its Power Bar ratio, which measures future potential, is Very Weak, with more Bearish than Bullish stocks. It is currently ranked #20 of 21 subsectors. Indicative Stocks [rating] CLNE Clean Energy Fuels C [rating] STR Sitio Royalties Corp [rating] GEVO Gevo, Inc. * * * * Top Movers Gainers [rating] ZION +19.22% [rating] CMA +16.76% [rating] LYV +15.04% [rating] KEY +10.08% [rating] TFC +9.46% Losers [rating] BIO -16.73% [rating] MPWR -10.38% [rating] EPAM -10.33% [rating] MTD -3.40% [rating] MSI -3.05% * * * * Earnings Report Reporting Today Rating Before Open After Close PYPL, TSN SWKS VTRS DVA, MCK, VTR DVN, IFF, WDC No earnings reporting today. Earnings Surprises [rating] WBD Warner Bros. Discovery, Inc. Q1 $-0.38 Missed by $-0.26 [rating] EOG EOG Resources, Inc. Q1 $2.69 Beat by $0.20 [rating] EPAM EPAM Systems, Inc. Q1 $2.47 Beat by $0.13 [rating] CI The Cigna Group Q1 $5.41 Beat by $0.17 [rating] D Dominion Energy, Inc. Q1 $0.99 Beat by $0.02 * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. 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