First Republic Bank is facing a grim fate as its stock has plummeted around 75% this week following a disappointing first-quarter earnings report. Investors fear a banking crisis and have been selling off First Republic stock. Hopes for a white knight to save the embattled lender were dashed after reports suggested the bank will likely go into receivership by the Federal Deposit Insurance Corporation. The bank has already received about $100 billion in life support from big banks last month, but it may still collapse without a lifeline. The bank's total deposits fell 41% in the first quarter to $104.5 billion, and it has loaned and invested more money than it has in deposits, subjecting it to liquidity risk. First Republic's fight for survival comes just over a month after Silicon Valley Bank's collapse, and it remains uncertain whether the Fed will ease up on its fight to stabilize prices. Federal regulators have released a review on the missteps that led to SVB's collapse, and the FDIC has unveiled its own review of Signature Bank's collapse.
Based on the bearish trend analysis, it appears that the outlook for FRC is negative. The Momentum Indicator fell below 0 on April 25, 2023, which suggests a bearish signal. In the past, 62% of the time when this happened, the stock fell further within the subsequent month. Therefore, it may be prudent to consider selling the stock, shorting the stock, or exploring put options on FRC.
Additionally, after a 3-day decline, the stock is expected to fall further. Historically, in 61% of cases where FRC declined for three days, the price rose further within the following month. However, given the current market conditions, it is more likely that the bearish trend will continue.
Moreover, the Aroon Indicator for FRC entered a downward trend on April 28, 2023. This suggests a strong downward move is ahead for the stock, and traders may want to consider selling the stock or buying put options to benefit from the expected decline. Overall, the analysis points towards a bearish trend for FRC, and investors should exercise caution while making any investment decisions.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows