SunTrust Banks Inc. (STI)

SunTrust Banks stock forecast: buy or sell

SunTrust Banks stock outlook

  • Counting on December 2019, it's been 3 consecutive sessions in positive for SunTrust Banks. Price closed on December 2019 at $70.13 after inching a 1.26%.
  • SunTrust Banks is presenting its earnings report next Thursday
  • From the chart point view, price is drawing a scaled uptrend since August 2019 with higher tops and higher bottoms. Up to date, price made a 21.73% gain since the beginning of this rally
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Important:
The thoughts written in this post are personal and not recommendations for you to buy or sell stocks. The author of this paper does not have any knowledge of the individual conditions of the reader, his or her financial statements 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 Viewpoints are expressed for education motives only

SunTrust Banks stock chart overview

Should I buy SunTrust Banks 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 STI stock a buy?

In the current situation of SunTrust Banks there is just one buy setup eligible:

ATH buy setup

One of the most recommended trading strategies is to buy on All-time Highs (ATH) breakouts. The good point of buying at ATHs is that shares price doesn't struggle with upper resistances, and usually it rises fast. However, there's the risk of a bulls trap that may trigger your buy order and then drops sharply. That's why a stop loss is always important. Price is now at 2.24% of all-time highs and it can breakout at any time, so if you want to trade this setup it's recommended to setup your order at $71.70. The stop loss would be set at $64.53

Buy setupBuy pointStop lossRisk
ATH buy setup$71.70$64.5310%
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Should I sell SunTrust Banks stock?

When you own stock shares with some profit, it's really difficult to decide the correct moment to sell and get your profits. Much like when we have to buy shares, choosing when is appropiate to sell is not a fickle decision, and we must adhere our own trading strategy. Our trading system selects very simple setups to guide us on when is a good time to sell a stock. Be aware that these setups are not intended for selling short STI stock

A golden rule is that you must never mantain a trading operation that results in greater losses than those expected at the time of the buy. When to sell shares always has to be ruled by the stop-loss (automatic or manual)

Is it time to sell SunTrust Banks stock?

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

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Analysts' recommendations to buy or sell SunTrust Banks 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 previous month we couldn't find any rating for SunTrust Banks

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Technical analysis

Since on August 2019, SunTrust Banks has been drawing an uptrend that by now marked an amazing 21.73%. The price action shows higher peaks and troughs, and along the way provided very few entry points for those who wanted to trade in. Latest pullback was on October 2019, when price bounced at $64.01. Now, the price trades in a consolidation between its last top ($71.66) and its last bottom ($64.01)

SMAs overview

A favorite tool of many trading systems are the moving averages, that easily show market direction. A moving average is calculated as the simple mean of the previous N periods (usually sessions). Moving averages are usually calculated on different periods depending on the trading timeframe 21, 50, 100 and 200 days are the most usual moving averages

Supports and resistances

Technical analysts use supports and resistances to spot price points in the stock price action that may act as obstacles, containing the price of a stock to move in certain direction. A support level is a level where the price tends to 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 is likely to continue declining until meeting another support level. On the other hand, resistances are where the price may find opposition as it rises. Again, the price is more liable to "rebound" at this level, and if it finally breaches this level, it will rally easily until it approaches the next resistance

The current resistance levels are:

  • R1: $70.46 (0.47% above)
  • R2: $71.66 (2.18% above)
  • R3: $71.70 (2.24% above)
  • The current support levels are:

  • S1: $70.02 (-0.16% below)
  • S2: $69.53 (-0.86% below)
  • S3: $69.02 (-1.58% below)
  • Bollinger bands

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

    The distance between the upper and lower bands is 3.79%, meaning that volatility is at very low levels. Reduced volatility is often the antecedent to a sharp movement (up or down), so we must be alert and manage our buy or sell orders accordingly

    Relative strength index

    The relative strength index (RSI) is a technical indicator used in the analysis of stock markets. Its objective is to chart the current and previous strength or weakness of a stock or market based on the closing prices of a recent trading period. Oscillator indicators, such as relative strength, are intended to indicate values in the range of 0-100. The relative strength indicator is one of the best known and most widely used indicators, and it was invented by J. Welles Wilder in 1978

    The Relative Strength Indicator has been between the the levels of 30 and 70 for many weeks, and therefore, without this indicator really being helpful in making any decisions.

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    Earnings and financials

    SunTrust Banks will host the quarterly earnings call next Thursday. Market estimates earnings of %s per-share of $0.00, compared to previous quarter that made $0.00. If you hold or you are looking to buy SunTrust Banks stock, you must be aware that the financial reporting day usually has a very high volatility, and price can soar and sink with exceptionally low liquidity and not honouring your buy/stop-loss orders.

    SunTrust Banks had the quarterly financial event and presented the first-quarter report in mid-April.

    Compared to the same quarter last year, EPS was $1.24, so current EPS is a reduction of -100%. Turnover barely moved on an annualized basis in the Q1, from $2.2B to $2.2B last quarter.

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