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Banks (KBE) Jump - Why?

|Includes:SPDR S&P Bank ETF (KBE)
The last four trading days I have watched the banking sector ease higher. Granted this has been a sector out of favor the last three quarters with investors. The balance sheets are still a train wreck. The Fed has done everything except put money on their balance sheets (Congress did that) to help them improve. But, both individual and institutional investors have shunned them from their portfolio. Why the sudden interest in banks?
Bank of America got a ringing endorsement from an investment firm yesterday pushing the stock up more than 3%. The outperform rating was based on the bank doing better than expected with their “portfolio”. The ripple effect to the sector was worthy of note.
On Wednesday my ETF Spotlight video was on KBE, SPDRs Bank ETF. The consolidation or trading range was being challenged at the top end of the range on stronger volume. Technically speaking something was up. Of course with the news yesterday the ETF broke higher and is now trading above the range (see chart below). From my view nothing has changed fundamentally based on the available data to investors, but sentiment has shifted in the last week and this is worthy of note relative to the sector.
 
Trading Range Break
Trading Range Break

As I state constantly, never put your money at risk without first having a strategy for doing so. Define you entry, your stop and your target prior to investing money. Stay focused on you goals and objectives. If potential investments don’t meet your criteria for risk – pass, there are always plenty of opportunities. Have a great day investing.


Disclosure: Looking for a short term play
Stocks: KBE