Charles Schwab Corp (NYSE: SCHW) is having a rough time, along with other major bank stocks, as uncertainty in the economy and ongoing selling pressure continue to impact the financial sector. With Wall Street uneasy about tariff negotiations and recession fears, traders are closely monitoring bank stocks for potential opportunities amid the market’s ups and downs.
Looking at the stock charts, Charles Schwab has lost its 11.8% gain from January and is now down 4.1% for the year. It’s experiencing its 11th loss in 13 sessions and was recently trading 4.9% lower at $70.95. This puts it near its 260-day moving average, which is historically a positive benchmark.
Rocky White, Senior Quantitative Analyst at Schaeffer’s, notes that SCHW has tested this trendline five times in the past three years. Each time, the stock showed a positive performance one month later, averaging an 8.4% gain. If a similar bounce occurs, the stock could reach just under $77, nearing its February 11 peak of $84.50, which was a 13-month high.
A shift away from bearish sentiment in the options market might also provide a boost. Charles Schwab’s 50-day put/call volume ratio of 1.39 across the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is in the 90th percentile for the past year, indicating a strong preference for protective puts.
Furthermore, Charles Schwab’s Schaeffer’s Volatility Scorecard (SVS) stands at an impressive 91 out of 100. This suggests that the stock often exceeds volatility expectations, presenting an enticing opportunity for those buying options premiums.
