One of the more interesting trades recently is in National Bank Of Canada stock. This stock trades in Canada only, under the symbol NA. I have been in and out of this smaller bank throughout the past decade, but this year the stock for much of the time was ideal with its trading pattern. Up until August of this year, National Bank of Canada Stock was moving is a steady but unexciting uptrend. This made trading perfect for the stock. I sold the $45 put strike repeatedly and never once worried about the stock.
In August though the stock rose quickly and then by September shot up to above $52.50. The stock was definitely overvalued at that lofty level. It then pulled back to just below $50.00 which as you can see in the chart below placed the stock perfectly on its uptrend line. I thought perhaps the stock might fall further but instead the correction in October was followed by a rise to another new all-time high in the stock. That all-time new high though pushed the stock deeply into overvalued prices as the stock pushed above $55.
The steady rise trend line showed that the stock was fairly valued down around the $49 valuation. Sure enough, earnings came out recently which showed that National Bank of Canada did well, but certainly not spectacular and the stock fell quickly breaking through support and what had been a steady trend line, simply because earnings could not actually support such lofty valuations. As usual investors over-reacted and punished the stock severely.
National Bank Of Canada Stock for 2014 to Dec 19 2014
The rest of this article is a trade alert and strategy discussion on National Bank of Canada Stock for Members.
National Bank Of Canada Stock (NA) Trade Alert for Dec 19 2014
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