Buy and hold Westpac?

With the slide in the share price of BHP the big four banks take out the top four positions of largest companies on the ASX measured by market capitalisation.  And by a fair bit too with Commonwealth Bank (CBA) being twice the size of Telstra (TLS).  That's despite some decent falls in their share prices since April.  And that's all everyone wants to talk about "How far they've fallen since April." Not that this isn't important but what if we look further back.  Much further back.

Take Westpac (WBC) for example.  Here's a monthly chart going back to the beginning of 2009.

Source: Yahoo Finance

Since March 2013 (roughly two and a half years) they have been going sideways trading between a range of $30 to $35.  There was a descent spike out of this range at the beginning of the year with the price almost touching $40.  Everyone seems to conveniently forget that the falls in April, May and June were matched by gains of a similar magnitude at the beginning of the year.  So the only people nursing descent capital losses are those who bought in February, March and April.

The period from July 2009 to September 2012 also saw plenty of sideways movement trading between roughly $20 and $25.  That's a bit over three years.  After that 11 consecutive monthly gains saw the price shoot from $20 to $30.

So what does this all mean.

Despite the hysterical headlines its business as usual for the Westpac share price.  Despite a capital raising and recently going ex dividend the share price remains above $30 within its two and a half year range.

With sentiment currently poor one would expect it to stay in this range for some time.  However if you believe that Australia will avoid a recession, that unemployment will remain around 6% and economic growth is going to pick up you would have thought there is more upside than downside in the share price.