Shares of Metro Bank PLC (LON: MTRO) today fell 9.21% as investors took profits on their positions following the bank’s massive rally since the start of November. The bank’s shares have rallied over 100% this month from a low of 60.6p to its current price.
Traders have been betting on a pullback given the parabolic nature of the rally as depicted in the image below, but Metro Bank shares have shown little signs of pulling back as buyers kept pushing the company’s stock price higher.
However, the stock is long overdue for a correction even to give indicators time to catch up to the current price given the huge gap between current prices and the 20-day moving average, which closely tracks an instrument’s price.
Investors who missed out on the latest rally may be best served waiting for a correction before establishing new positions, while those who have benefitted from the rally should trim their positions and book some of their open profits.
The latest rally comes as the Brexit deadline fast approaches with the EU and UK yet to agree on a post-Brexit trade deal. A hard Brexit could affect banking stocks such as Metro Bank negatively and it seems like investors are betting on a deal before the December 31st deadline.
Metro Bank share price
Metro Bank shares today plunged 9.21% to trade at 116.20p having fallen from Tuesday’s closing price of 128p.