Mish's Market Minute

Will Regional Banking Continue to Grow as the Market Holds?


Yesterday, we looked at the Economic Modern Family as either hiding or holding their ground.

Today's price action shows that, at least for now, we are holding, as the Russell 2000 (IWM), Transportation (IYT), Regional Banks (KRE), Biotech (IBB), and Semiconductors (SMH) are currently trading inside the range from Mondays high and low.

KRE has been the largest underperformer in the Family, but with its recent breakout in price, it could give us some great opportunities as this sector is finally building momentum to the upside.

Above is a weekly chart of SVB Financial Group (SIVB), which is one of KRE's top holdings.

Interestingly enough, while KRE has been stuck under the 50-week moving average, SIVB was able to clear it long ago and now looks for a phase change, as the 50-WMA will cross over the 200-WMA soon.

With such a large run-up, it can be tough to find healthy risk-to-reward from a longer-term perspective, but, if money continues to rotate into this sector, then its outperformance from the other holdings makes it a good company to keep on our watchlist.

Another top holding is Truist Financial Corp (TFC). Sitting right upon the 200-WMA, TFC has been able to outperform KRE, which is still sitting between the 50-WMA and 200-WMA in a recovery phase.

While the regional banking sector, along with the rest of the market, is still digesting its move from Monday, keeping an eye for building support in this sector could make for some great plays as more money flows into this area.

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  • S&P 500 (SPY): Back over Mondays low with support 354
  • Russell 2000 (IWM): 169.33 support
  • Dow (DIA) 291.40 support, lots of digestion from Monday
  • Nasdaq (QQQ): Bounced off 10-DMA. Major support 280
  • KRE (Regional Banks): Support 45.22
  • SMH (Semiconductors): Strong close with support range from 187 to 190
  • IYT (Transportation): Needs to hold gap from 206.66 or could see break back to 203.40 (the 50-DMA)
  • IBB (Biotechnology): Finally made a higher close from consolidation at 137 area
  • XRT (Retail): Almost no change from yesterday's close of 54.67, but still holding

Mish Schneider


Director of Trading Research and Education

Forrest Crist-Ruiz


Assistant Director of Trading Research and Education

Mish Schneider
About the author: serves as Director of Trading Education at MarketGauge.com. For nearly 20 years, MarketGauge.com has provided financial information and education to thousands of individuals, as well as to large financial institutions and publications such as Barron’s, Fidelity, ILX Systems, Thomson Reuters and Bank of America. In 2017, MarketWatch, owned by Dow Jones, named Mish one of the top 50 financial people to follow on Twitter. In 2018, Mish was the winner of the Top Stock Pick of the year for RealVision. Learn More
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