Ally Financial Inc. (ALLY)

Ally Financial stock forecast: buy or sell

Ally Financial stock outlook

  • Counting today, it's been 3 consecutive sessions in red for Ally Financial. Price closed today at $20.82 after inching a 1.46%.
  • Ally Financial is presenting its earnings report next Friday
  • The stock is configuring an uptrend pattern since mid-March, when it bottomed at $10.11. This rally marked a 105.93% gain
  • Ally Financial Inc., a bank holding company, provides various digital financial products and services to consumer, commercial, and corporate customers primarily in the United States and Canada.
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Important:
The opinions published in this article are personal and should not be followed as recommendations for you to buy or sell stocks. The author of this text does not know the specific conditions of the reader, his or her finances or his or her own best interests at any given time. All users should speak with their financial advisor before buying or selling any securities Comments are expressed for informational purposes only

Ally Financial stock chart overview

Should I buy Ally Financial stock?

All successful traders recommend adhering to a trading strategy and not make decisions based on subjective opinions, rumors or feelings. Trading strategies are meant for helping you in the decision process of what stocks to pick and when is the best moment to buy them. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best

Is ALLY stock a buy?

Currently, Ally Financial stock matches one trading strategy:

Uptrend buy setup

Ally Financial stock is in an uptrend since in mid-March that so far marked a gorgeous 106% gain. Price marked a pull back in this uptrend at $18.20 on June 24, and since then it bounced up a 14.4%. Now, it's only 17.1% away from breaking out over its last top and resume the uptrend. The new buy point is therefore at $24.38. If you decide to enter this trade, the suggested stop loss is at $21.94

Buy setupBuy pointStop lossRisk
Uptrend buy setup$24.38$21.9410%
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Should I sell Ally Financial stock?

Do you know when is it time to sell Ally Financial?. Like when we have to buy shares, determining when is appropiate time to sell is not a whimsical decision, and we must use our own trading strategy. We like very simple setups to guide us on when is a good moment to sell our shares. Be aware that these setups are not intended for shorting ALLY stock

A guiding principle is that you should never mantain an investment that results in losses greater than those expected upon purchase. When to sell shares should always be ruled by the stop-loss (automatic or manual)

Is it time to sell Ally Financial stock?

In the current situation of Ally Financial there is not any eligible sell setup, so Ally Financial stock holders with operations in profit can keep their positions

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Analysts' recommendations to buy or sell Ally Financial stock

Brokerage firms and financial institutions post stock ratings based on their views of the market and the fundamental and technical situation of the analyzed stock. Unfortunately, the accuracy of these predictions is not very high, and certainly not a direct buy or sell signal

In the last month, 4 ratings were published for Ally Financial. General sentiment is bullish, with 3 out of 4 publishing optimistic forecasts

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Ally Financial ratings

Brokerage firmRating
Jun 25th, 2020
Credit Suisse Group Buy
Jun 25th, 2020
Janney Montgomery Scott
Jun 25th, 2020
Morgan Stanley BuyBuy
Jun 25th, 2020
Piper Sandler BuyBuy

Technical analysis

Since in mid-March, Ally Financial has been printing an uptrend that so far marked an amazing 105.93%. During this uptrend, the price provided some buy points on the breakouts. Latest low was on June 24, when price bounced at $18.20. Like in all uptrends, price needs to rest and now price is consolidating the gains in a range between $24.38 and $18.20

SMAs overview

A favorite tool of many technical analysts are the moving averages, that easily show trend direction. A moving average is calculated as the simple mean of the previous N periods (usually sessions). Usual time periods used for moving averages are 21 days, 50 days, 100 days and 200 days

Supports and resistances

Traders use support and resistance levels to find price points on a chart that may act as barriers, preventing the price of an asset to move up or down. A support level is a level where the price may find support as it falls. Price is more likely to "rebound" this level rather than break through it. However, if the price breaks down the support, it will probably continue descending until meeting another support level. In contrast, resistances are where the price tends to find resistance as it rises. Again, this means that the price is more likely to "rebound" at this level, and if it finally crosses this level, the price will climb more easily until it hits the next resistance

The current resistance levels are:

  • R1: $21.72 (4.32% above)
  • R2: $22.65 (8.79% above)
  • R3: $23.83 (14.46% above)
  • The current support levels are:

  • S1: $20.45 (-1.78% below)
  • S2: $20.29 (-2.55% below)
  • S3: $19.81 (-4.85% below)
  • Bollinger bands

    This is an indicator that was designed in the 1980s by John Bollinger. Fundamentally, the Bollinger Bands are lines that move around a centralmoving average, varying the distance from the bottom to the top depending on market volatility. They are usually drawn by an offset of two standard deviations, above and below, from a moving average line. Bollinger himself recommends the moving average period to be 20

    The price is moving very close to the upper Bollinger band, signaling some level of overbought in recent sessions. This is not a sell signal, as price can move in these levels for many days and weeks

    Relative strength index

    The Relative Strength Index is an oscillator-type indicator that measures price movements to identify when the share or financial asset is overbought or oversold. Oscillator indicators, such as relative strength, are designed to indicate values in the range of 0-100. J. Welles Wilder introduced the relative strength indicator in the late 1970s and since then it has been widely used by traders

    The RSI dropped below the overbought level of 70 in mid-June after just crossing to the overbough zone for just one day (weak signal). The RSI value today was 56.8. Since that level was lost, Ally Financial stock sank a 9.16%

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    Earnings and financials

    Ally Financial is posting quarterly financial report next Friday. Forecasted earnings per share (EPS) for this quarter is $0.26. Earnings reporting day has a more than usual risk for investors as the information posted can soar and sink the shares price with exceptionally low volume and not honouring your buy or stop-loss orders. It's always good to review company's website to confirm time and details about the earnings call and the earnings report.

    Ally Financial had the financial event and released the first-quarter report in mid-April. Ally Financial presented 1st-quarter earnings of $-0.44 per share on revenue of $1.4 billion. The analysts estimate was $0.19 per share on revenue of $1.6 billion.

    This compares to earnings of $0.80 per share a year ago, so reported EPS means a reduction of -155%. Looking at revenues, figures fell a -11.88% compared to $1.6B same quarter last year.

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