Trading Visa: Uncrowned King of Consumer Credit
When it comes to short term edges in some of the bigger credit card stocks, there’s no doubt that Visa (V) is the leader of the pack.
Shares of both Visa and MasterCard (MA) have been trading in bull market territory for most of the year, making pullbacks and short-term sell-offs in the stocks especially noteworthy for traders and active investors. Most recently, shares of Visa have closed lower for three days in a row, finishing in oversold territory for a second day in a row. This has given the stock a positive edge of more than 1% heading into trading on Monday.
The last time Visa closed oversold for two days in a row was in the final trading day of September and first trading day of October. Then, back-to-back finishes in oversold territory anticipated a rally during which Visa closed higher for eight out of the next nine trading days, gaining more than 13%.
Playing Pespi to Visa’s Coca-Cola is MasterCard, which takes a smaller, but still positive short term edge into trading on Monday. Shares of MA have been trading in bull market territory for the majority of 2011, as well, with short term, multi-day pullbacks typically resulting in short term, “snapback” rallies.
Ahead of trading on Monday, shares of MasterCard have pulled back for two days in a row, five out of the past seven. Although the stock is not currently as oversold as it was earlier in its pullback, any significant selling on Monday will likely return the stock to oversold status.
All of the other competitors to Visa and MasterCard are struggling to trade consistently in bull market territory. Among those stocks, the biggest positive, short term edges are in Capital One Financial (COF). Trading below its 200-day moving average, COF finished at its lowest level in more than 20 days on the day before Thanksgiving and was little changed in trading on Friday.
All of the stocks in today’s report were available from research and data available through The Machine. To learn more, click here.
David Penn is Editor in Chief of TradingMarkets.com