Is it finally time to buy European banks?
David Russell | [email protected]
optionMONSTER's tracking programs have detected unusual activity in companies such as Deutsche Bank, Credit Suisse, and HSBC. DB, for instance, appeared on our Heat Seeker market scanner on Monday as investors snapped up the May 42 calls for $0.70 to $0.85. The stock, which trades for barely half book value, has pushed higher since and those calls have roughly doubled to $1.55.
Today the activity shifted to HBC, which saw unusual buying in its September 55 contracts. The action in CS has been focused on the equity rather than the options. Our researchLAB tool, which analyzes relative performance of thousands of stocks and groups them thematically, shows the Swiss financial up 3.5 percent in the last month. That's more than twice the performance of the S&P 500 over the same period.
researchLAB also shows emerging strength in the most distressed European financials. National bank of Greece, for instance, has gained about 17 percent in the last two weeks and is now attempting to make a higher low. At $0.77, it's now above its 10-day moving average, which could signal a reversal of its bearish pattern.
Spanish lenders Banco Santander and Banco Bilbao Vizcaya have also outperformed the broader market over the last week. (See the dedicated Euro Crisis group on researchLAB for more.)