Trading Strategies For First Republic Stock Before And After Q1 Earnings

First Republic Bank FRC is set to print its first-quarter financial results after the markets close on Monday. Analysts expect the company to report EPS of 85 cents on revenues of $1.15 billion for the quarter ending March. 31.

The regional bank, which was rescued from collapse last month by other big banks, has had to find ways to save capital. Earlier this month, First Republic suspended payment of quarterly cash dividends on its non-cumulative perpetual preferred stocks as a measure of “prudent oversight.” Read more here...

When First Republic prints its financial results, investors will get a better idea of the health of the bank and gain insight on the chances of surviving.

When First Republic printed its fourth-quarter earnings report on Jan. 13, the stock edged about 2% the following day and continued in its uptrend until Feb. 2, when it topped out at $147.68. On March 7, three days before the banking sector suffered massively bearish price action due to the collapse of SVB Financial Group, First Republic began to drop, plunging 90% between that date and March 20, when the stock hit the $11.52

From a technical perspective, First Republic looks slightly bullish due to several signals that have developed on the stock’s chart. Of course, holding a position in a stock over earnings can be akin to gambling, as stocks can rise following an earnings miss and fall after reporting a beat.

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The First Republic Chart: Between March 22 and Monday, First Republic was trading sideways between $11.74 and $16.76. On Monday, the stock attempted to break up from the horizontal pattern but rejected and wicked down from the upper trendline of the pattern.

• Bullish traders want to see the stock break up above $17, which could indicate a longer-term reversal to the upside is on the horizon. The stock’s upward move has allowed it to regain the eight-day EMA, which is bullish and indicates a break up may be the most likely scenario.
• Bearish traders want to see the bank receive a bearish reaction to its earnings print, which could knock the stock down from the sideways pattern. If that happens, a longer-term downtrend could be in the cards.
• First Republic has resistance above at $16.76 and $21.88 and support below at $11.74 and at the psychologically important $10 mark.