Bank of Montreal shares fall around 2.5% as earnings beat is overshadowed by selling pressure

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Bank of montreal slides 2.49% today

Highlights

Bank of Montreal posted quarterly earnings of C$3.67 per share on C$9.57 billion revenue, with 11.25% return on equity.
The bank raised its quarterly dividend to C$1.71 per share, payable August 26, 2024, despite continued share price pressure.
Technical outlook shows bullish momentum with expected 5-day trading between C$242.17 and C$257.8, though intraday weakness continues after a gap down.

Earnings beat fails to offset dividend-driven selling pressure

Bank of Montreal reported quarterly earnings of C$3.67 per share with revenue at C$9.57 billion. The company recorded a return on equity of 11.25% and a net margin of 12.63% in the latest quarter. Bank of Montreal increased its quarterly dividend to C$1.71 per share, up from C$1.67, with the next payment scheduled for August 26, 2024, to shareholders of record as of July 30, 2024, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, sees a concerning disconnect between BMO’s bullish technical signals and its sharp 2.49% decline after earnings. He notes that, despite strong fundamentals and a dividend hike, the high RSI of 78.46 and CCI show the stock is severely overbought. The persistent gap down and daily close near the low highlight underlying selling pressure. Kharitonov warns that a break below C$245.1 could trigger a deeper correction. He adds, "Traders should treat current upside signals with caution, as technical exhaustion and sentiment-driven selling risk a near-term reversal."

Viktoras Karapetjanc, expert at Traders Union, views the latest BMO earnings and dividend increase as a signal of ongoing strength. He points out the robust return on equity and sustained net margin as drivers for further confidence. Karapetjanc believes the stock’s position above key moving averages keeps the bullish structure intact despite short-term volatility. "With fundamentals supportive and the technical trend unbroken, I expect BMO to attract renewed buying and test higher levels soon," he says.

Bullish momentum diverges from intraday selling after gap down

BMO is trading well above its 20-day (C$242.79), 50-day (C$226.62), and 200-day (C$195.62) moving averages, reflecting a strongly bullish structure across all timeframes. The closest levels are C$248.17 as the near-term ceiling and C$245.1 as the near-term floor, with Ichimoku Kijun at C$239.51 confirming underlying support in the broader trend. Momentum readings show strong upward pressure: the MACD signals "Strong Buy", and the Average Directional Index (ADX) confirms active upward momentum. The Relative Strength Index (RSI) sits at 78.46 with a buy signal, indicating overbought conditions that are echoed by the Commodity Channel Index (CCI) and Bull/Bear Power (BBP), with buyers clearly dominating. Daily action stands out: the stock gapped down by about C$3.02 or 1.19% at the open, and has dropped C$6.31 (2.49%), with price now trading near the intraday low and volatility at 1.61%. The Awesome Oscillator is neutral, and while Stochastic RSI is also neutral, the overall tone remains pressured after the gap down, as intraday performance diverges from prevailing momentum signals.

Earlier, analysts noted that Bank of Montreal shares were exhibiting persistent bullish momentum, with rangebound consolidation expected as the prevailing scenario. The latest technicals and earnings update reinforce this outlook, making a sustained move above the C$248.17 resistance the key signal for a bullish breakout in the days ahead.

Source of Data: BMO Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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