COF BearishI Just got into some cof 180 puts. I think the option market is signaling a push down to the $180 area so im going to jump on the band wagon. Looking to get out there or lower.
0HT4 trade ideas
COF - How we spotted and prepared for this breakoutCOF was lagging behind a bit, still building liquidity to break into fresh ATH's. But even though it took an extra few weeks, I was prepared and building my position. The more proof I saw of tapering white in control, the more confident I was in the eventual breakout.
This is something that can be demonstrated on all charts and just outlines the visual aspect of the liquidity building process which every chart must go through in order to see sustained breakouts.
Happy Trading :)
💾 Capital One Financial Corporation | Financial DetoxI started a series with the TOP10 largest bank in the USA.
I went all the way through 8 and stopped... Let us finish now.
Capital One (COF) is the 9th largest bank in the USA, the chart is also bearish and has been bearish since August 2021.
This banking corporation as well as others have been going down for more than a year and the final phase of the bear market is about to take place.
The type of correction we are witnessing is a Zig-Zag, 5-3-5.
We have the initial 5-down mapped out, then the WXY correction and a new 5-down wave pattern starting to develop.
This is Elliot Wave theory that I now mix together with my classic signals.
The 0.618 Fib. retracement support level for the inflationary, money printing, bull-market of 2020-2021 has been broken. The current price trades below this level and closing below it confirms lower prices.
Likely to close below based on all the bearish signals coming from this chart.
✔️ We have an established downtrend.
✔️ There is a bearish cross on the MACD (chart below).
✔️ The RSI trending lower.
MACD:
As I mentioned in my latest Bitcoin article, we still have some turbulence to go through in 2023.
2024 Everything should start to get better.
All the weak banks will be flushed out and a new cycle will start. Just as we saw with Crypto where the gambling/weak companies were removed, the bear market works the same all across.
Let's call it a "financial detox" once more.
Namaste.
COF - Proceed... but with caution. From the general outlook, we see a beautiful bullish flag forming on the HTF and price respecting our tapered controlled selling white algorithm. However, what I did not mention in the video is that we have a very large HTF demand zone at the $165 level - price is definitely going to be attracted to it like a magnet - so unless we see real support up here at these levels and strong buying pouring it, I have an expectation that we attempt a deeper liquidity build to those levels.
Happy Trading :)
Capital One Could Be Breaking OutCapital One has been stuck in a range most of the year, but some traders may think a breakout has begun.
The first pattern on today’s chart is the falling trendline along the highs of April and early July. COF surged through the resistance last week and remained above it this week.
Second, the financial stock has turned positive on the week after making a higher low and lower high. Such an inside week is a potentially bullish signal.
Third, the 50-day simple moving average (SMA) is near the 100-day SMA. That highlights the tight price action during its recent basing. Will expansion follow the narrow movement?
Next, MACD is rising and the 8-day exponential moving average (EMA) is above the 21-day EMA. Those patterns could indicate that short-term trends are getting more bullish.
Finally, COF bounced this week near the July 1 high. That may suggest that old resistance has become new support.
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COF - Capital One Drop and Pop LONGCOF is shown on 1 15 minute chart. The trade idea is to play the drop in a bank stock as a
reaction to the sticky inflation report and the idea that a rate cut already baked into stock
price is about to come off the table. This is a risky reversal trade. However, with risk comes
reward. The idea is on the chart. I will take a long trade here anticipating a return of 2%
and about seven times risk. A call option for an expiration of 4/19 will also be in the position,
striking 141. See also
Continuation Pattern in Capital One?Capital One Financial rallied to a 21-month high in late January and paused during February. Now some traders may see upside potential in March.
The first pattern on today’s chart is the series of higher lows with prices remaining below its January 26 close. That ascending triangle is a potentially bullish continuation pattern.
Second, the 8-day exponential moving average (EMA) has remained above the 21-day EMA during the sideways movement. That may reflect a positive short-term trend.
Third, COF completed a bullish inside week between February 26 and March 1: another potentially bullish continuation pattern.
Finally, traders may look for a close above roughly $139 to confirm buyers are back in charge.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com . Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com . System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit www.TradeStation.com for further important information explaining what this means.
Capital One to Buy Discover for $35 BillionThe country’s ninth-largest bank, Capital One (NYSE: COF), shocked the finance world when it announced that it will buy Discover Financial Services (NYSE: DFS) for a staggering $35 billion. This all-stock deal is set to be one of the biggest M&A deals of 2024, bringing together two of the nation’s credit card giants to create a true global payments powerhouse.
But, what drove Capital One to make this move? It’s clear as day that the Berkshire Hathaway-backed (NYSE: BRK.B) Capital One has finally had enough of the sky-high fees associated with Visa (NYSE: V) and Mastercard (NYSE: MA).
By snatching up Discover, Capital One won’t just compete with these industry titans, but it could break free from their clutches altogether. After the news, DFS stock rose 15.6% in premarket trading, while COF stock fell by 3.5%. But there’s just one problem: The rise in DFS stock doesn’t reflect the nearly 27% premium Capital One valued Discover at, which could suggest that investors aren’t entirely convinced that this deal will come to fruition.
The Deal
Under the terms of the all-stock deal, if you’re a Discover shareholder, you’ll receive 1.0192 shares of COF stock for each DFS stock you own. And what’s really interesting about this is that Discover has a market cap of $27.6 billion, and the deal is valued at $35 billion, which means it’s a 26.6% premium over its closing price on the 16th of February. Moreover, after the deal closes, Capital One shareholders will hold roughly 60% of the combined company, while Discover shareholders will own the remaining 40%.
What is Capital One Getting?
For starters, now is a good time for credit card companies to make big moves like this one. There’s a boom in the credit card sector because more and more customers are switching from paying with cash to cards. This is largely thanks to generous rewards programs and the strong rise in e-commerce, which started to take off during the pandemic. Additionally, card issuers are getting a boost from increasing credit card debt, which continued to increase last year amid rising prices and declining savings.
As for what it’s getting from the deal, buying Discover would give Capital One a large card network, greatly increasing its power in the payments ecosystem. And this is important because card networks are essential for making transactions happen, as well as setting the fees that sellers pay when customers shop with their credit cards.
This would allow Capital One to negotiate interchange fees and other terms directly with merchants, making Capital One more of a competitor to companies like Visa and Mastercard. Notably, shares of Visa were down 1.8% in premarket trading after the news, while Mastercard stock was down 3.2%.
The deal would also increase the number of cardholders Capital One counts as customers for its credit-card lending business. This deal doesn’t just give Capital One numbers, but quality too, since many Discover cardholders have high credit scores. The deal would also allow Capital One to get its hands on the consumer deposits in Discover’s savings accounts, an area where it already has a large presence but would like to continue growing.
When you compare Discover to competitors like Visa and Mastercard, you’d think that Discover is a very small company, but what makes it unique is that it’s one of the few U.S. card issuers that actually have payment networks. Which is the main reason why Capital One is buying it in the first place. Even though it uses Visa and Mastercard for most of the cards it issues, it will likely begin switching some of its cards to Discover after the deal closes.
Even after the deal closes, Capital One will continue using Visa and Mastercard thanks to its wider reach. For example, Discover currently has 70 million merchant acceptance, compared to Visa’s 130 million and Mastercard’s nearly 100 million.
Still, this could be a play from Capital One to reduce its dependence on Visa and Mastercard, as the pair have come under fire recently for their high fees they charge for processing payments. Some lawmakers have even accused them of forming a “duopoly”.
Discover’s Recent Troubles
For Discover, the deal couldn’t have come at a better time. The company was going through a tumultuous period with increased regulatory scrutiny and two changes in its leadership.
Discover’s troubles are a result of a statement issued last year, in which it stated that it had misclassified certain credit card accounts beginning in 2007 and had incorrectly placed them in the highest pricing tier. As a result, the company was forced to record a liability of $365 million in estimated compensation for everyone involved.
In addition to that, Discover received a consent order from the FDIC regarding consumer compliance, but Discover did not release many details about the matter. Discover escaped a fine from regulators after reaching an agreement with the FDIC to improve its compliance management system.
A Decade of Offers
Interestingly, this is not the first time Discover was approached by a large bank or even a tech company for an acquisition. In fact, the company has been receiving offers for the last decade, especially from tech companies. The reason Discover accepted this deal and not those from tech companies is likely because they were only interested in its payments and card network. For tech companies, Discover offered an opportunity to play a more central role in payments. But, Discover’s older management wasn’t interested in separating the company’s credit card lending side from the network, which is why many deals were rejected.
On the other hand, Capital One said that it’s planning to keep the Discover brand on the cards and network. If the deal happens, it will certainly rank among the biggest deals so far for 2024. After a slowdown in M&A activity in 2023 due to increased interest rates that reduced the appetite for massive deals, this deal between Capital One and Discover could reignite interest in this market.
The Combined Company
There’s an opportunity here to create a new credit card giant, but the main concern for shareholders of COF stock and DFS stock can be summed up in one question: Will the resulting company outperform the broader market in the long-term?
Over the past 10 years, COF stock has underperformed SPY with an annualized return of 8.39%, while SPY has yielded a comparatively higher 12.62% annualized return. Compared to the XLF, COF stock has also underpeformed offering an annualized return of 8.39% over the last 10 years, while XLF has yielded 13.08% annualized return.
The same can be said for DFS stock which underperformed the XLF during this same period and compared to the SPY, achieved an annualized return of only 9.97% compared to the SPY’s 12.62% annualized return.
It’s possible that these two companies hope that combined, they will be able to outperform these benchmarks and take on industry giants. With this merger, the resulting company would create the largest card issuer in the US – immediately surpassing JPMorgan Chase.
While Jamie Dimon brushed it off saying “let them compete. Let them try”, the merging companies are likely hoping to capitalize on the credit card sector boom and use their advantages and synergies to generate higher profits and shareholder value than COF stock or DFS stock could achieve on their own.
COF Stock Forecast
If the deal is approved by regulators, the COF stock forecast looks notably bullish. In fact, Citi analysts stated that with Discover’s valuable payments network it will unlock value that neither company could achieve on its own. As a result, Citi increased its price target for COF stock to $152, offering 11% upside from its closing price on the 16th of February.
However, one glaring risk is the fact that M&As of large companies are super hard to pull off. Together, Capital One and Discover will become the sixth-largest bank in the US, with consolidated assets of almost $625 billion. A combination like this will undoubtedly come under intense antitrust scrutiny.
The deal is already seeing push back from Senator Warren and 12 congressional Democrats who wrote Acting Comptroller Michael Hsu and the Michael Barr, urging them to block the deal. This appeal is based on their belief that the deal would reduce competition and reduce card issuers’ incentives to offer customers favorable terms.
However, its possible that regulators will be more amenable to this deal, since Capital One is a well known company and considered to be a “good actor”. Not to mention, Discover previously pledged to invest $500 million to better its compliance operations after its troubles with the FDIC.
Setting aside these regulatory concerns, the two companies expect the deal to close late this year or in early 2025. There is a lot at stake for Capital One which stated that shifting away from Visa and Mastercard’s “duopoly” would help it generate an extra $1.2 billion in revenue in 2027.
While COF stock offers a tempting opportunity for long-term investors, veteran investors have seen time and again major deals fall through. Whether it was the collapse of Adobe’s acquisition of Figma or the UK’s decision to block Microsoft’s $69 billion acquisition of Activision Blizzard, its not unusual for these deals to fall through or at the very least face hurdles such as in Microsoft’s case.
BUY TODAY SELL TOMORROW for 5%DON’T HAVE TIME TO MANAGE YOUR TRADES?
- Take BTST trades at 3:25 pm every day
- Try to exit by taking 4-7% profit of each trade
- SL can also be maintained as closing below the low of the breakout candle
Now, why do I prefer BTST over swing trades? The primary reason is that I have observed that 90% of the stocks give most of the movement in just 1-2 days and the rest of the time they either consolidate or fall.
Trendline Breakout in COF
BUY TODAY SELL TOMORROW for 5%
A slight drop provided a opportunityAfter reporting earnings and being down about 2% post market 01/25. The price had recently hit a low on the RSI indicator at a price equivalent to 129.52 which was hit around 17:15 hrs. Viewed easier on the smaller timeframes on the 15min. observing the weekly timeframe there is a possible break as the resistance of 120 was easily broken compared to Jan 30/23. When the opportunity came buyers stepped in and deemed the price cheap and this uptrend may very well continue.
COF bullish prior to earningsAs we approach much awaited results for capital one stock, from a technical perspective although the price had failed to break its a high of 134.26 during the week of FRI 05 Jan 2024, As we observe current price action as comparable to the left chart using the weekly timeframe we are at a point in price were there has been a significant move within this equity around this price range. The fact the current weekly candle starting tues jan 16 2024 ended with a green long wick full bodied candle representing buying volume looks to have gained momentum holding price action at a halt furthering the chance of a drop in price to be unlikely as we approach Jan 25. Looking at the right chart on the price was support at a low of 123, if we look within the monthly candle on the daily even with the consecutive daily red bearish candles the fact that the green bearsh daily candle closed green well above the ichimoku cloud cover further supports the price. I have a 2024 price target of 160 but would look towards a high of 135 to retest that price range yet again in the near future as early as mid February if buyers step into this with positive earnings.
from a fundamental aspect the rise in credit card usage and loans being acquired is on the rise, and many people will go need credit to fund their ventures or any daily activities that can be in the form of a credit card.
Capital One $120 Price TargetCapital one NYSE:COF shares soared 3.3%
This is a credit card issuer.
Revenues for this company are up 4.6%
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ENVA
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Purchased Notes offerring around 11% interest
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Capital one according to Morgan Stanley has a hold analyst
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Holding to $120 price target
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Watch this video below to learn more
**Disclaimer:**
The information provided above is for educational and informational purposes only.
--
It does not constitute financial advice, and trading always involves
--
a risk of substantial losses, regardless of the margin levels
--
used. Before engaging in any trading activities, it is crucial to
--
conduct thorough research, consider your financial situation,
--
and, if necessary, consult with a qualified financial advisor. Past
--
performance is not indicative of future results, and market
--
conditions can change rapidly. Trading decisions should be made
--
based on careful analysis and consideration of individual
--
circumstances. The user is solely responsible for any decisions made
--
and should be aware of the inherent risks associated with trading in
--
financial markets.
Capital One $120 Price TargetCapital one shares soared 3.3%
This is a credit card issuer.
Revenues for this company are up 4.6%
--
ENVA
--
Purchased Notes offerring around 11% interest
--
Capital one according to Morgan Stanley has a hold analyst
--
Holding to $120 price target
--
Watch this video to learn more
--
**Disclaimer:**
The information provided above is for educational and informational purposes only.
--
It does not constitute financial advice, and trading always involves
--
a risk of substantial losses, regardless of the margin levels
--
used. Before engaging in any trading activities, it is crucial to
--
conduct thorough research, consider your financial situation,
--
and, if necessary, consult with a qualified financial advisor. Past
--
performance is not indicative of future results, and market
--
conditions can change rapidly. Trading decisions should be made
--
based on careful analysis and consideration of individual
--
circumstances. The user is solely responsible for any decisions made
--
and should be aware of the inherent risks associated with trading in
--
financial markets.
What's In Your Wallet? Better question is, "What's In Your Brokerage Account?"
If you own Capital One stock I would caution you to be extremely focused on the potential for large movement to the downside
They have the potential to be victims of the weakness in the Banking/Financial sector and....
They also have the potential to greatly exacerbate overall weakness in the Banking/Financial sector (their exposure to subprime borrowers should have us all worried)
COF Stock Rallies On Capital One EarningsCOF stock rallied Friday after financial services giant Capital One (COF) reported an upturn in earnings, topping Q3 estimates by a broad margin.
Capital One Q3 earnings rose 6% to $4.45 per share early Friday after six quarters of double-digit declines. Revenue increased 6% to $9.34 billion.
Analysts polled by FactSet expected earnings of $3.24 per share on $9.2 billion in revenue.
Net interest income climbed 6% to $7.42 billion.
Credit card loans increased 3% to $146.8 billion while consumer banking loans fell 1% to $76.8 billion. Auto loans decreased 1% to $75.5 billion. Commercial banking loans declined less than 1% to $91.2 billion.
Technical Analysis
COF is trading in the middle of its 52-week range and below its 200-day simple moving average.
Investors are still evaluating the share price, but the stock still appears to have some downward momentum, which will definitely reach support level and bounced back.
COF to begin pullback around early June
Credit card defaults are at all-time-highs
This pump is heading toward over-bought territory
The trend is downward (below both 50 and 200 MAs on the weekly)
This is a pretty obvious "head-and-shoulders" formation in the making
Still have downward pressure possible with MACDs, LuxAlgo, RSI and other indicators
I anticipate it tops out at around $110 (also coincides with a fractal number and a MA) befor its sharp decent, around late-May/early-June
Capital One....technical Breakdown loomingWith major weakness in the banking sector we are still seeing the contagion play out. Some banks are more at risk than others.
Based off of a blow out in Credit Default Swaps. The bond market is showing there is tremendous risk in this bank.
Just like Credit Suisse CD's blew out befroe the collapse, we are watching COF credit defaults blowout.
