CBA hit the top end of a well-defined chart support range last week. This support zone is broadly between $69.70 and $72. It's proven to be the low point for Commonwealth Bank shares on 5 separate occasions over the past year. 

CBA has also come back to the pack in terms of valuation. Having been valued well above the other 4 majors for a long time; CBA’s forward price: earnings ratio now stands at about 12.8 compared to Westpac on 12.6 and ANZ on 12.4. Even allowing for timing differences in dividend payments, this suggests that the much publicised strategy of switching out of CBA into other major banks may be approaching skinny risk: reward territory. 

With a dividend yield of 8.4% after franking, this chart support zone should attract yield hunters yet again.

However, this is a situation where a false bearish break to the downside would not surprise. We saw one of these back in April when traders pushed CBA fleetingly below the previous lows. This time around, the 50% retracement level and other Fibonacci projections around $68.75/$69.50 might be worth keeping an eye on. They have potential as levels that could put a floor under any brief break into new low ground.



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