To The Moon

⭐️ Shares of PacWest (PACW) jumped nearly 82%. 

⭐️ $Western Alliance(WAL)$  gained 49%

⭐️ Zions Bancorp (ZIONO) added about 16%

🚨 However, Friday's rally only made a small dent in the week-to-date losses. PACW still finished the week down 43%🐻🐻🐻 after it confirmed this week that it is exploring strategic options to bolster its finances, which triggered a brutal sell-off.

⚠️ WAL, which said it is not seeking a sale, has also been under heavy pressure this week, falling 27% even after Friday's rally.

Many 🐯🐯🐯 might be wondering is it 🤨Safe To Buy Since Regional🏦🏦🏦 Have Rebounded🤨❓My quick answer is “Regional🏦 stocks still have high-risk of crashing & more may collapse‼️” To understand why my answer is no, we need to understand a few things below:

🧐Why Did Regional🏦🏦🏦 Crash💥💥❓

(1) Investors are fearful for the health of mid-sized lenders after FRC’s earnings release.

🚨 This fear is somewhat irrational given the regional banks’ balance sheet fundamentals. However, never underestimate irrational fears as see what it did to FRC‼️

➡️ Citigroup analysts said, "The most recent movements in bank equity prices are more about general confidence than deposits. That would be a more difficult issue for regulators to address"

(2) Former Federal Deposit Insurance Corporation Chair told CNBC on 4/5 (Thu) that some of the share price declines are likely being driven by short-selling.

🧐Why Did Regional🏦🏦🏦 Rebound📈❓

(1) A stronger-than-expected jobs report lifted Wall Street’s main indexes.

🚨 This is a 👍📰 for the economy as it signals that 🇺🇸 is able to still fend off a recession for now, BUT it’s bad📰 for the Fed & Tech companies as it means more rate hikes

might be on the horizon🐂+🐻

(2) JPMorgan analysts upgraded their ratings of several regional banks on Friday, including WAL, ZIONO, Comerica, saying that the stocks appear “substantially mispriced” after seeing “intense shorting/selling pressure.” “With sentiment very negative and a potential sector re-rating on the horizon, we now move to the middle of the boat and adopt a neutral sector stance,”

🚨🚨🚨 Didn’t several 🏦🏦🏦 stick their neck out for FRC as well❓It wasn’t just empty talk, in their vote of confidence, they even contributed $30 Billion to FRC but look at what happened to FRC still⁉️

(3) It’s common to have a relief rally just after the dramatic sell-off. Moreover, short-sellers may be buying shares to close their positions leading retail investors to believe that the worst is over📉📈📉🎢

(4) The market may be overly optimistic, anticipating some kind of government support for the sector in coming days

(5) On 5/5, St. Louis Fed President James Bullard reiterated the position of regulators that the banking sector is fundamentally in good shape, telling the Economic Club of Minnesota that regional banks had a “couple of issues” but represented a small share of 🇺🇸 financial intermediation.

🔎Who Are At Highest Risk Of Collapsing🕵🏻‍♀️🕵🏻‍♂️ ❓

Above is the list of companies that generated the most profits for short sellers on May 1 & May 2. From the above data & what this week, I would say that PACW & Truist Financial Corp (TRC) have the Highest Risk Of Collapsing🐻🐻🐻

🤔💭My Final Thoughts:

(1) Short-sellers reaped a combined $430.47 million in paper profits betting against PACW, WAL, ZIONO & First Horizon on 4/5, according to data from analytics firm Ortex. The rebound may not signal a long-term shift in sentiment, but rather a relief rally or short-sellers buying in shares to close their positions⚠️

(2) As many as 16 midsized banks have shed more than $57 billion in market capitalization since last Friday, a Reuters calculations showed🐻🐻🐻 A shift in momentum could cause a massive short squeeze, so meme play might be in action. Not all meme can avoid eventual bankruptcy & we can never know when we’ll be🔥🔥🔥

(3) Regional🏦🏦🏦 have hit back at short sellers, writing in a letter to the SEC chair Gary Gensler on 4/5 that many such bets did "not appear to reflect the issuers’ financial status." Gensler replied on the same day saying that the agency would probe any manipulative behavior.

🚨🚨🚨 Regional🏦 stocks still have high-risk of crashing & more 🏦🏦🏦 may collapse given the current circumstances & considering FRC’s recent history replay. There hasn’t been additional government or SEC intervention except Powell & other Fed members, bank executives & analysts saying that 🏦🏦🏦 are 👌

💡Big🏦🏦🏦 will be dragged down $JPMorgan Chase(JPM)$ Bearish$Bank of America(BAC)$ Bearish$Citigroup(C)$ Bearish $UBS Group AG(UBS)$ Bearish but I’ll be continuing my daily auto-investing plan on BAC as it’s hard to time the market & get the lowest price. I’m confident in BAC as Buffett holds lots of BAC shares, & he didn’t sell them even though he sold JPM😉

Fellow 🐯🐯🐯 Trade Safe in this volatile period❣️Follow me if you enjoy reading analytical stock research🔍 presented in a fun & easily understandable way😉 & for the Latest Stock & 🗞🗞🗞 Updates🕵🏻‍♀️❣️

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