Silicon Valley Bank's stock ($SIVB) reached a low of $100 Friday as a result of a depositors run on the bank and inability to secure enough cash from bond investments to maintain solvency. After failing to cover deposits the FDIC took the bank over.
A technical view of $SIVB shows cracks in the foundation going back to January of 2022.
The stock peaked in Oct of 2021 and attempted to reach another high in Jan 2022 but fell short. A bearish divergence in RSI is when the stock reached a high but the RSI showing a significant weaker reading.
Divergence example:
2. 3 Phase Stock Collapse
Selloff 01 - Occurred in Jan 2022 falling below the 50ma. After failing upon a retest of the 50ma the stock went on a months-long selloff.
Selloff 02 - In Sep 2023 the stock fell below the 200ma and retested. This resulted in a massive volume 2 week selloff.
Selloff 03 - Depositors begin to make mass withdrawals. Because of poorly valued treasury investments the bank was unable to secure enough liquidity to cover the withdrawals. The bank's stock completed an 86% fall from its peak before being halted.
Low Short Interest
Short interest according to FINVIZ was actually quite low and reasonable with a ratio of 2.11
Sector Fallout
The ETF that holds the largest banks printed a 9% loss last week as a result.
What's more concerning when you look at $XLF holdings is Charles Schwab ($SCHW) printed a -23% loss for the week. The stock has reverted back to Jan 2021 levels. Clearly affected by the SVB failure but how remains to be seen.
