Don't Ignore This Chart!

Regional Bank ETF Rises to the Top


Even though I am currently in the "correction" camp for the broader market, there are clearly pockets of strength in some key groups. The Software iShares (IGV), Cyber Security ETF (HACK), Internet ETF (FDN) and Networking iShares (IGN) are leading the technology rebound and all are close to new highs. In addition, the Bank SPDR (KBE) and Regional Bank SPDR (KRE) are up over 1% so far today and close to new highs. 

The chart below shows the Regional Bank SPDR (KRE) retracing around 50% of the November-January advance with a sharp throwback in February. The ETF found support in the middle of the triangle and broke out with a surge last week. John Murphy pointed out last week that KRE was one of the first to retake its 50-day SMA (members only Market Message). 

The indicator window shows RSI bouncing off the oversold zone for the second time since the big trend reversal in September. KRE reversed its long-term downtrend with a breakout in September and then provided two more opportunities to partake in the uptrend with the two pullbacks. 

Plan Your Trade and Trade Your Plan.

- Arthur Hill, CMT

Senior Technical Analyst,

Book: Define the Trend and Trade the Trend
Twitter: Follow @ArthurHill

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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