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Swing Trade Idea (TFC) – August 1, 2024

Our bearish trade for Thursday, August 1st is Truist Financial Corporation (TFC). TFC is part of the Financial Sector, which is pulling back from the top of an uptrend channel and performed at 6.17% over the last month. TFC overperformed relative to its sector over the same period at 13.86%.

TFC has been very bullish over the last two months and has traded into an area of resistance at $45. With TFC losing strength and with the Financial Sector pulling back from recent highs, we expect to see a pullback with support at around $40 to $41. We are playing a Credit Spread that will collect over 33% of the Premium/Width.

As a close, if TFC were to trade above $46 for multiple days, this would invalidate our analysis and we will consider cutting losses on the trade. We will also consider cutting losses on this options trade if the value of the vertical spread moves above $1.68.