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Capital One Financial Corporation (COF)

COF stock forecast: buy or sell

Close on Sep 29th, 2020
$70.45 -0.01%
3 months performance
0.12%
Published: September 29th, 2020 - 4.37pm EDT

COF stock outlook

  • Capital One Financial closed today at $70.45 after inching down a -1.23%.
  • Price is drawing a scaled uptrend since last March with higher tops and higher bottoms. This uptrend marked a 86.92% gain

Disclaimer:
The viewpoints published in this post are personal and should not be followed as recommendations for you to buy or sell shares. The author of this article does not know the particular circumstances of the reader, his or her own financial statements or what is in his or her best interest at any given time. All users should speak with their financial advisor before buying or selling any securities Viewpoints are expressed for educative purposes only

COF stock charts

Should I buy Capital One Financial stock?

Even if you are a experienced or a novel trader, best trading results come from using an investing strategy that never leaves to random or subjective opinions when is the best moment to buy or sell stocks. 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 COF stock a buy?

In the current situation of Capital One Financial there is just one buy setup eligible:

Uptrend buy setup

Capital One Financial stock is in an uptrend since last March that so far marked a gorgeous 87% gain. Price marked a local bottom in this uptrend at $66.46 last Thursday, and since then it bounced up a 6%. Breaking out above $77.50 - it's last top - will be a good entry point if Capital One Financial resumes the uptrend. If you decide to enter this trade, the suggested stop loss is at $69.75

Buy setupBuy pointStop lossRisk
Uptrend buy setup$77.50$69.7510%

Should I sell Capital One Financial stock?

Knowing when to sell a stock is even more difficult than knowing when to buy it. Like when we have to buy shares, deciding when is appropiate to sell is not a random decision, and we must adhere our own trading style. When selling, as well as buying, our setups are very easy to use but are only valid for selling shares you already own, not for shorting Capital One Financial stock

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

Is it time to sell Capital One Financial stock?

Currently, Capital One Financial stock doesn't match any of our preferred sell setups, so if you own Capital One Financial stock and your operation is in profit probably is not time to sell now

Analysts' recommendations to buy or sell Capital One 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, just one analyst rating was published for Capital One Financial

Capital One Financial ratings

Brokerage firmRating
Sep 16th, 2020
Morgan Stanley

Technical analysis

Since last March, Capital One Financial has been printing an uptrend that so far marked a gorgeous 86.92%. The price line shows higher highs and higher troughs, and along the way provided some buying opportunities for those who wanted to invest. Latest pullback was last Thursday, when price bounced at $66.46. Currently, it swings in a consolidation between its last top ($77.50) and its last bottom ($66.46)

SMAs overview

Moving averages are simple indicators for traders to measure momentum. A moving average is the average price of a stock over a set period of time. Usual time periods used for moving averages are 21 days, 50 days, 100 days and 200 days

COF SMAs chart

Supports and resistances

Traders use supports and resistances as a way to spot price points in the stock price action that may behave as barriers, containing the price of shares to move in certain direction. Supports are levels where the price may stop as it falls. Price is more likely to "bounce off" this level rather than break through it. Nevertheless, if the price breaks down the support, it will probably continue declining until approaching another support level. In contrast, a resistance level is where the price may find a curb as it moves up. Likewise, the price is more likely to "bounce off" at this level, and if it finally crosses this level, it will rally easily until it hits the next resistance

The current resistances are:

  • R1: $70.89 (0.62% above)
  • R2: $70.90 (0.64% above)
  • R3: $71.03 (0.82% above)
  • The current support levels are:

  • S1: $70.42 (-0.04% below)
  • S2: $70.34 (-0.16% below)
  • S3: $70.19 (-0.37% below)
  • Bollinger bands

    This is an indicator that was developed in the 1980s by John Bollinger. Fundamentally, the Bollinger Bands are bands that flow around a centralmoving average and vary 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

    Since the price surpassed the upper band on September 16, the price has been corrected downwards by 8.34%

    COF RSI chart

    Relative strength index

    The RSI (Relative Strength Index) is an oscillator-type indicator that track price changes to detect when the share or financial asset is overbought or oversold. Like other oscillation indicators, the RSI fluctuates from 0% to 100%. The relative strength indicator is one of the best known and most widely used indicators, invented by J. Welles Wilder in the late 1970s

    The Relative Strength Indicator has been between the overbought and oversold zones for some weeks, and therefore, without this indicator really helping us to make any decisions.

    COF RSI chart

    Earnings and financials

    Second-quarter investors call was hosted by COF in mid-July after posting the financial report. COF presented Q2 earnings of $-2.21 per share on sales of $2.3 billion. The analysts estimate was $-1.68 per share on revenue of $6.8 billion.

    Compared to the same quarter one year ago, EPS was $3.24, so current EPS means a drop of -168.21%. Revenue collapsed a -67.56% on an annualized basis in the Q2, from $7.1B to $2.3B last quarter.

    COF is hosting the earnings call on mid next October. Wall Street analysts predict a per-share earnings of %s of $1.38, that is a 162.44% higher than Q2. If you own or you are planning to buy COF stock, be vigilant as the financial reporting day usually has a very high volatility, and price can jump up or down with unsually low liquidity and not honouring your buy or stop-loss orders. Check company's website to confirm time and details on the earnings call and the earnings report.

    COF revenues and profits chart