Stocks finished higher Thursday, with the Dow and S&P 500 setting fresh highs, boosted by a batch of upbeat economic reports.
Financial stocks attracted strong buying support in Thursday session after Morgan Stanley (MS) topped quarterly expectations as revenue grew in all of its major businesses, particularly trading and underwriting. As such, the SPDR KBW Bank ETF (KBE) jumped 2.09% to new multi-year high. Below is an updated look at a trade in KBE. The ETF had been on a tear so far this year and is at an interesting spot.
The graphic below is from our “U.S. Market ETF Trading Map”, which show the near-term technical bias and trading ranges for KBE. As shown, the underlying is in a short-term bullish trend when the price bars are painted in green. The underlying is in a short-term bearish trend when the price bars are painted in red. The yellow bars identify period of neutral or sideways trading pattern. Additionally, the light-blue shading represents the short-term trading range. A move above or below that range is considered overbought (as represents by the red shading) or oversold (as represents by the dark-green shading). Readings above or below the red and green shaded areas are considered extremely overbought or extremely oversold.
Chart 1.1 – SPDR KBW Bank ETF (daily)
As indicated in the above chart, our “U.S. Market ETF Trading Map” rates KBE as a Buy. Over the past few days, KBE had been basing sideways near its range top resistance as traders digest the June massive rally. Thursday bullish breakout had helped clear resistance at the early July high, suggesting that KBE might have switched to a new uptrend…Click here to read more.
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