Each to their own. If people want to short CBA, or anything else for that matter they are welcome to it. I personally have bought some more recently.
FA aside, given the chart shows excellent support around this level for CBA, I would have to say one would think looking at the chart, CBA is much more likely to go up from here than down. So then why would you risk shorting it at this level. Sure, the SP may go down, but why not pick a stock that has a higher chance of falling than one at a major support.
And on the FA side, all this talk of housing going down by 20-50% is hysterical. Housing prices don’t move like spec stocks. Sure they can stagnate or go down by 5-10%, but an overall a move of 20-50% would be extremely unlikely to say the least.
You can see from the chart above, that even during the GFC, median house prices, in Sydney for example, did not plunge ridiculously. Mostly failed to go up. So I really don’t think the banks are about to go belly up any time soon, like in my lifetime. Furthermore, with increasing interest rates, the spread between interest on their funding and the interest they can charge on their loans spreads, so effectively each loan becomes more profitable for the banks.
Anyway, let’s not let the truth stand in the way of a good story.
CBA Price at posting:
$70.39 Sentiment: Hold Disclosure: Held
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