Financial Sector: Beware LEH, CIT

Tuesday, June 03, 2008 | 11:19 AM

Every day, we run a series of screens, large and midcap, buys & sells, breakouts and breakdowns.

Today, our Large Cap Sell Screen identified Lehman Brothers (LEH) as a Sell. It has a current master score of 33 (out of 100) and has an abysmal technical score of 17. It went to a sell signal back in March around $52, and two weeks later, traded as low as $20.25. It recovered somewhat, flipping to neutral around $44. 

Its now back on a sell signal, with a $20 price target. (See chart below)

The MidCap Sell Screen found a smaller financial: CIT Group (CIT). It also went on a Sell signal. Same set up as Lehman Brothers: First sell signal was in March about $16, fell to $6.45 a few weeks later, back to a neutral a month later.  Now, CIT is back on a Sell/Short rating, with a possible target about 30% lower.

Lehman Brothers (LEH) Six month daily

CIT Group (CIT) Six month daily

NOTE: Traders who short stocks should always work with stop losses. The financial sector, with outside investors, have been very volatile, with squeezes occurring regularly.

Regular FusionIQ posts can be found here.

Tuesday, June 03, 2008 | 11:19 AM | Permalink | Comments (22) | TrackBack (1) add to | digg digg this! | technorati add to technorati | email email this post



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» Lehman Brothers $20 Price Target Complete from The Big Picture
In the beginning of June, I noted that Lehman Brothers (LEH) was reiterating a sell signal on the Fusion IQ ranking system. So too was CIT Group (CIT). Lehman closed at $19.81, and is now at an eight year low on Take-under speculation. CIT is $6.81, ab... [Read More]

Tracked on Jun 30, 2008 5:18:06 PM


A little late on LEH don't you think????

if you didn't short it into the last rise over 45 then I'm afraid you'll just get stopped out on the next "capital injection news" (that they are repeatedly denying) I think most of them will continue to try to raise new money because if they do not they will collapse like a wet taco. The fed can't keep doing the same thing to soak up all the bad choices they all have made. They may try........


Posted by: michael schumacher | Jun 3, 2008 11:28:27 AM

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