After Exiting KeyCorp, Here's Where I'd Look to Get Back in
Why I'm flat on the stock for now.
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I sold my last share of KeyCorp (KEY) overnight. It then dawned on me that, yes, this was a "Stocks Under $10" name and, yes, I had to confirm to readership that I had acted as I wrote that I would back on February 13. At that time, KEY was riding high.
I showed readers this chart and I was quite cautious. I wrote:
"It appears that KEY has now fully benefited at this point from the Cup with Handle inspired breakout of early 2026. The stock has given up its 21-day EMA and appears to be headed for a test from above of its 50-day SMA (blue line). Should the stock fail that test, my plan is to exit the balance of my position and perhaps re-enter at the 200-day SMA (red line)"
Let's Update the Chart
Readers will note that KEY did in fact surrender its 50-day SMA for good on February 27. The next day, I started working my way out of the position. As mentioned in that note almost a month ago, I am still interested in re-initiating upon a test of the 200-day line, currently at $18.80. I currently see a still-developing head-and-shoulders pattern of bearish reversal with a pivot just above $20.
Should the pattern fully mature, that would imply a sell-off that could go as low as $18, so I'll see how the stock behaves when that test happens. Currently, relative strength has been resilient but is fighting a losing battle. The daily MACD is now posted quite bearishly with the 12-day EMA well below the 26-day EMA and the histogram of the nine-day EMA stuck below zero for more than three weeks. KeyCorp does not report again until mid-April.
At the time of publication, Guilfoyle had no positions in any securities mentioned.
