Looking at the recent Commonwealth Bank of Australia (ASX: CBA) share price, you wouldn't think investors have been in a selling mood. CBA shares are well in the green today, recording a gain of 0.73% at the time of writing at $106.69 a share. That puts CBA up just over 4% in 2022 so far, as well as an impressive 14.1% since the start of March. It also means CBA is now up just over 24.5% over the past 12 months.
And yet, many investors have been cashing out of their Commonwealth Bank holdings. We know this because of Gemma Dale of NABtrade. Ms Dale joined Motley Fool Chief Investment Officer Scott Phillips on Ausbiz recently to discuss the share trading trends that she is seeing in NABtrade customer accounts.
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Why are investors selling out of CBA shares?
Dale told Ausbiz that ASX banks like CBA still make up very large proportions (35-40%) of many investors' share portfolios, helped more recently by "massive buying" during the COVID crash of 2020. However, she also said that NABtrade has noticed some strong retail selling in ASX banks of late, particularly with CBA and National Australia Bank Ltd. (ASX: NAB). Here's some of what she said:
So now with NAB above $31, the selling is unbelievable, 85%-plus sell on NAB… why wouldn't [investors] take some profits at this point? Also, they've seen NAB above that level and fall back away before so they've taken the opportunity to lock that in… CBA at $107, that was a 90%-plus sell… It's mostly trimming at this level. [Investors are] pretty keen to lock in those numbers.
So Ms Dale argues that many retail investors (nine in ten at one point) are selling out of CBA now that the share price is approaching the bank's all-time high of just above $110 a share. That could explain why we've seen some volatility with the CBA share price over the past week. Indeed, CBA shares have touched close to $106 and gone as high as $107.50 in just the past few days. And remember, this is a company that is still up 14% over this month alone. That would be enough to give more than a few investors itchy fingers.
We'll have to wait and see what the CBA share price does next and whether it is on track to beat that all-time high of $120.19 that we saw back in August last year.
In the meantime, the current Commonwealth Bank of Australia share price gives CBA a market capitalisation of $182 billion, with a dividend yield of 3.52%.
