The Commonwealth Bank of Australia share price (ASX: CBA) pulled back 3.55% today, having initially failed to hold the break above $160.
With CBA coming off new all-time-highs, a period of price discovery can be healthy, and can often take place around psychologically relevant levels. The rounded $160 number seems to be where the next phase of battle between the bulls and bears is likely to take place, as we had also seen at both the $140, and $150 levels. With the stock having gained 50% over the past 12 months, a pullback could be seen as healthy, or even indicate some profit taking.
The remainder of Australia’s big four banks also pulled back on the day, with Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), and ANZ Group Holdings Ltd (ASX: ANZ) experiencing notably smaller declines.
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Whilst the ASX200 was down on the day, and the broader markets seem to have taken a pause in light of incoming US President Trump’s comments surrounding tariffs, the absence of a clear catalyst could lead us to believe that the proportionally higher dip in CBA might be a result of profit-taking by investors. After witnessing such significant gains over the recent weeks, it would not be uncommon for shareholders to decide to crystallise their profits, especially in a market that remains volatile and uncertain.
While today’s movement in CBA’s share price could be disconcerting to some investors, the lack of significant negative news related to the bank itself suggests that the drop may be more reflective of broader market movements and strategic decisions by shareholders rather than a fundamental shift in the bank’s underlying value or outlook.
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