The Banking sector, which has been lagging for months now (I've previously commented on its underperforming range) has shown some interesting signs of strength thus far in 2010. Take a look at the chart of the PHLX Bank Index (BKX) (NYSEARCA:KBE) (NYSEARCA:RKH) (NYSEARCA:XLF) below:
BKX Daily Chart
You can see that the recent move higher has sprung Percent R and Efficiency Ratio to levels not seen in some time. Additionally, the slope of their upward spikes is impressive.
Bank sector should be considered for a momentum upside play ... longer-term fundamentals remain iffy, in my view. Additionally, keep in mind that Percent R has not yet broken 80 on the BKX Daily Chart, which is a key bullish threshhold in our analysis. Also, we are right at the Top Acceleration Band (purple lines), which is also a key technical area.
Disclosure: No positions.