Banks Rip, But Weekly Charts Still Say Buy

Friday, December 1, 2017

We saw a huge move across the Financial sector this week and I don't believe what we are seeing is a top. On the contrary, I think this week's signal represents a brand new opportunity to add to or establish new positions in Banks. I am still adding to positions right here and expect much more upside in the future. We could certainly see consolidation short-term, but long-term this remains an emerging trend.

Regional Banks KRE

This is exactly what I look for in an ideal long entry. We are seeing volume expand on a move to new weekly closing highs after a 12-month sideways consolidation. In fact this was the largest weekly volume in the history of the KRE. The second highest volume came on the post-election breakout move which continued for another 14% over the next 4+ weeks. Momentum also is emerging from a highly coiled pattern which is indicative of significant intermediate upside potential.

Regional Banks tend to be the most sensitive of the Financial stocks and when they are in position, good things tend to follow. Check out some of the other moves that occurred this week.

JPM new all-time highs

GS Cup/Handle suggests a move to the $280's to start.

BAC Breakout/Retest/Resume

WAL