The CBA finished at $69.50 yesterday. That’s its lowest close since July 2013.
It’s not the type of anniversary Ian Narev and his board would have been hoping for yesterday as they celebrated the 25th anniversary of the Commonwealth Bank’s privatisation and listing.
And the fact that the fall has finished below the level which has become the de facto floor for the CBA’s stock price over the last year could unsettle investors in the days ahead. That’s particularly so given the area around $70 held against all the headwinds of regulatory capital requirements, concerns about bad debts, and the global market funk we saw earlier this year.
The argument that the Australian market’s, and the CBA’s, move yesterday preempted the overnight weakness in the US and Europe can be credibly run.
But the fact US financials fell 1.8% overnight and that the CBA’s price slipped, and closed, under an important range bottom will attract the attention of chartists. It will also attract the attention of the various short sellers who have been calling the demise of Australia’s banks which could accelerate the downside pressure.
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