Keycorp is another of those stocks which value investors may well be eyeing at the moment, as it is another from the list that could be ‘perceived as cheap’. Sometimes there is a reason why stocks are cheap, but in this case, the fundamentals and technicals would suggest otherwise, and with last week’s price action now firmly balanced at a significant level, now might be the time to add this one to any watch list.
And the reason for this is easy to see on the weekly chart. Since the early part of the year, the stock has been trading in a relatively narrow range. However, note how following each reversal lower the stock closes at a higher level each time. The low of 2018 was $13.60. The low of late March at $14.80 and finally the low of late May at $16.00. This in itself is signalling a rising triangle formation with the ceiling of resistance building at $17.84 per share and indeed clearly identified with the accumulation and distribution indicator. The blue dashed line is relatively wide denoting this is a strong region which was tested again in last week’s price action. With the price now tantalisingly balanced the journey higher for the stock still has some significant hurdles to overcome. Nevertheless, this is the starting point for a move away from the volume point of control at $16.80 per share and denoted with the yellow dashed line. So provided the price continues to hold at the volume point of control and break through $18 per share, we should then see an advance to the next level of resistance at $18.50 per share and denoted with the red dashed line where lighter volume awaits on the volume histogram before deeper volume resistance then builds towards $20 per share.