Financial stocks attracted strong buying support after JPMorgan Chase (JPM) and Wells Fargo (WFC) reported earnings that topped the Street on both ends. As such, the Financial Select Sector SPDR (XLF) soared to new high, up 0.69% to 20.35. Below is an updated look at a trade in XLF. The ETF has been on a tear in recent days 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 XLF. 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 – Financial Select Sector SPDR (daily)
As indicated in the above chart, our “U.S. Market ETF Trading Map” rates XLF as a Buy. Friday upside follow through served as a confirmation and extension to Thursday bullish breakout. Money Flow measure trended higher from above the zero line, indicating an increase in buying pressure…Click here to read more.
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