FITB Week

The financial services company First Third Bancorp (FITB), by creeping up for a second straight week on rising volume, is setting up to make a run past $16 to a higher high in the uptrend that began in February 2009, the month when markets began to recover from the collapse of capitalist finance in 2007/08.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
FITB (daily) $13.58

However, the week's intra-day run up of 6.8% low to high ultimately disappointed, retreating Thursday and Friday to 4.4% below the peak.

Last week's volume stood 5% above the week before and 20% above two weeks previous. That tells us that there is serious accumulation going on, although the number of shares traded -- 66.5 million last week -- is well below the 119.1 million of the most recent swing high.

As a trader, I like slow accumulation. The fast version usually happens to quickly for me to open a meaningful position. I prefer the stealthy uptrend to its flashy cousin.

To qualify as a higher high, FITB must push past the $15.95 swing peak of April 21. That requires the stock to overcome five weeks worth of resistance set during that topping period. There are sure to be plenty of sellers, disgusted by the subsequent decline, who are willing to close out for little profit or a wash.

Above that level is another swing high of $21, set in mid-September 2008 and followed by a punishing decline down to $1.01 by mid-February 2009.

Reversal Levels

• $21.00, +54.6%
• $15.95, +17.5%
• $14.20, +4.6%
• $13.58 <== You are here.
• $12.05, -11.3%

In the long-term view (the 20-year God Chart, because only God can afford to be such a long-term trader), FITB peaked in April 2002 at $69.8-, and has declined since, in three waves, The most recent wave, from $43.32 in May 2007, has the greatest magnitude of the set.

In the short-term view (the three-month daily chart), the signalers are far from unanimously bullish. The parabolic sar and Person's Proprietary signal have been in bull phase since June 9 and 10, respectively, but the macd is declining through bull territory toward the zero line, and the fast stochastic has dropped below the overbought line, bringing back into the neutral zone in a very near term bearish signal.

The question for traders wanting to open a position is whether the late-week decline has in fact played itself out, and Monday's late action (after 3 p.m. Eastern) will no doubt provide an answer.

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Disclaimer

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

Abbreviations:

• psar - Parabolic Stop and Reverse
• adx - Average Directional Index
• pps - Person's Proprietary Signal
• ma20 - 20-day moving average
• macd - Moving Average Convergence-Divergence
• sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.