Should You Buy-the-Dip at Bank of Montreal?

Bank of Montreal (TSX:BMO)(NYSE:BMO) fell 1.05% on December 11. Its Tuesday close of $91.19 represented a 52-week low. BMO stock has now plunged 14.8% over the past three months.

The downward move comes just over a week after BMO released its fourth-quarter and full-year results for 2018. The bank posted solid growth in several major segments. BMO reported that its Canadian Personal and Commercial banking segment realized adjusted net income of $676 million which was up 8% from the prior year.

It achieved this on the back of revenue growth and lower provisions for credit losses.

BMO reported impressive growth in its U.S. Personal and Commercial banking segment on the back of tax reform, which has also powered major banks south of the border to record profits. In the fourth quarter BMO reported adjusted net income of $383 million in its U.S. retail segment which represented a 36% increase from Q4 2017.

BMO credited this increase to solid revenue growth and the benefits of the U.S. Tax Cuts and Jobs Act.

After yesterday’s close, BMO stock last had an RSI of 20, which indicates that the stock has fallen steeply into oversold territory. The bank said in its most recent earnings release that it would rely on growth in its U.S. segment going forward, as it was far and away the best performer for the bank in 2018.

This may be a concern heading into 2019 as U.S. growth is projected to slow. Canada’s economy is also facing major challenges as we look ahead to 2019.

BMO stock looks like a great buy based on its technicals, but broader volatility could contribute to frustrations for investors in the near term.