Technically CBA was significantly overbought on the spike this morning to A$76.92, with the ten-period RSI hitting 87. This seems to be the key reason why the pair failed to hold these highs and has pulled back after the open.
The 61.8% retracement of the January to February sell-off comes in at A$76.07 and a close below here could be very telling. Shorting stocks into an uptrend are rarely profitable exercises and the downside seems fairly limited given the strong short-term trend.
Given the rejection of the morning’s highs (from overbought levels) a period of consolidation looks likely. Given the earnings momentum, strong dividend and lower bad and doubtful debts, CBA will be seen more and more as a safe haven. This is a stock that traders will look to short for short-term moves, especially with CBA going ex-dividend on February 17.