SOTR - SouthTrust Corporation $46.85 +0.89 (+1.04)

Tuesday's Comment:

SouthTrust Corporation has been consolidating in the $44-$47 range after hitting an all-time high last Thursday. On Tuesday, shares of SOTR traded to an intra-day high of $46.76 but the stock reversed directions along with the rest of the market. The stock ended the day at $45.96 on volume of 755,000 shares. SOTR has lost its short-term upward momentum and volume is trending lower. On the positive side, the long-term trend remains in tact as we approach the 2:1 stock split, payable on May 11th. SOTR may need a volume surge to push the stock to new highs. Going forward, support is the 10-dma at $45.55 with additional support at $44.93, the 20-dma. Resistance has fallen to Tuesday's intra- day high of $46.76 and then the all-time high of $47.20. Look for a bounce off of $45.55 or a move above $46.76 on midday volume of at least 500,000 shares before opening new positions. We are keeping our stops at $44 to limit potential losses.

Wednesday's Update:

It only took four interest rate cuts by the Fed, but bank stocks appear as if they finally want to go higher. The CBOE Bank Index (BIX.X) has found support at its short-term up trend line and looks to be stabilizing around its 50-dma at 628. As for our play, SOTR moved higher by $0.89 on lighter volume of 650,000 shares on Wednesday. The good news is that SOTR had a strong bid all day, which served to gradually lift the stock right into the close. Looking at the chart, we can see that SouthTrust's up trend is still well in tact and that we are just $0.35 away from a significant breakout to the upside. A breakout would be defined by a close above the previous high of $47.20. After this point, SOTR has no previous resistance, but sellers are sure to show up at the $50 level. New entries could be considered on a break of the $47.20 level or on a bounce off the 10-dma at $45.75 on volume of at least 400,000 by midday. We are keeping our stops at $44.00 to limit downside risk.

Picked on April 19th @ $46.96 Change since picked -0.11 Stop Loss @ $44.00

Play of the Day Index