Bull Flags Take Shape in Bank SPDRs


Deutsche Bank dominated the news late in the week, but US banks have been largely unaffected and bullish flags are taking shape in two bank-related ETFs. The charts below show the Bank SPDR (KBE) and the Regional Bank SPDR (KRE) in long-term uptrends. Notice that the 50-day EMAs are above the 200-day EMAs and both ETFs hit their highest levels of the year in late August. Both ETFs pulled back in September, but I view short-term pullbacks as opportunities when the bigger trend is up. 

The ETFs pulled back after the August surge and these pullbacks look like bull flags. Note that bullish flags slope down and mark corrections within an uptrend. A move above the late September highs would break flag resistance and signal an end to the correction. This would also signal a resumption of the bigger uptrend. Chartists can also watch the Percentage Price Oscillators (PPOs) because they are flattening and could be poised for an upturn. 

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Thanks for tuning in and have a good weekend!
--Arthur Hill CMT

Plan your Trade and Trade your Plan 

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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