Investor’s worries surrounding the European banking giant Credit Suisse (NYSE: CS) have seen the share price tumble in the last couple of days. However, investors appear to be eyeing another European banking giant for short selling.
Short sellers make a profit when stocks fall by borrowing shares to sell them immediately at the market price, with a plan to repurchase them when the price drops, thus, pocketing the difference.
Namely, the data shows that currently, there is $1.68 billion worth of bets against BNP Paribas (EPA: BNP), or 3.66% of the volume traded, making it the most shorted European banking stock.
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BNP chart and analysis
BNP is an average performer in the banking industry, outperforming 48% of 25 stocks in the same industry. Over the past month, the shares traded in a wide range from €42.06 to €51.04, with both the short-term and long-term trends negative.
Technical analysis shows a support zone from €41.10 to €41.86 and a resistance zone from €46.77 to €47.33.
Meanwhile, analysts on Wall Street have a ‘moderate buy,’ rating on BNP, predicting that the shares may reach €65.94 in the next 12 months, 51.05% higher than the current trading price of €43.66. Notably, out of 11 TipRanks analysts covering BNP, seven have a ‘buy’ rating, and four have a ‘hold’ rating.
While discussions surrounding Credit Suisse reach an all-time high after news of a possible major banking collapse, investors seem to be worried about a systemic risk to European banks. The energy crisis far more pressures the Eurozone than the rest of the world. Furthermore, rate hikes have reached unprecedented levels, further pressuring consumers.
However, the bet against the largest French bank that withstood the 2008 crash, Covid lockdowns, and numerous other issues could be far-fetched, but only time will tell whether short sellers had a proper hunch.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
