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Banks Are Showing Signs of Life

Jan. 05, 2010 6:32 PM ETXLF, KBE, RKH
Moby Waller profile picture
Moby Waller's Blog
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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) (KBE) (RKH) (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.

Moby Waller,
BigTrends.com
1-800-244-8736



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