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Trading Lessons

Banking Sector Stocks have Topped Out Right Here... Sell in May and Go Away....

Companies / Banking Stocks May 03, 2017 - 02:03 PM GMT

By: Submissions

Companies

Zach writes: Looking at the SPDR Select Financial ETF (XLF), a proxy of the 65 biggest financial institutions, we can see that this sector will be headed lower, by approx 5% or even more.

How do I know that? - The charts are talking to us...

1. We've topped out at the 50 MA on the Daily chart, which is also a pivot high of resistance.


2. Price has failed to clear above the 20MA on the Weekly chart in recent weeks, and infact it gave us a topping tail last week.

3. The Weekly 20MA looks like it is about to turn downwards.

3. We have a head and shoulders pattern forming on the Daily, which although hasn't triggered as yet, portends further downside if it does.

The timing couldn't be better - it look like it'll be a Sell in May and Go Away.

I, for one, however, ain't going anywhere! I've already bought options to profit from this move and alerted my subscribers.

Downside initially should be a break of $23. I'd love to go out on a limb and shout out that XLF will sink to $22 or lower, but given that the central banks have been standing on their podiums and conducting the orchestra for quite some time now, I'd rather be conservative in my target. As for the news item that will prompt this move south, all I can say is that the charts take precedence - the news items reported as to why something moved the way it did is simply a convenient excuse to fit in with what the charts are telling us will happen in advance of time!

Don't believe me?

Join me on tradingwithzach.com and let's watch this play out together!

Be profitable.

Zach

https://tradingwithzach.com/

© 2017 Copyright  tradingwithzach - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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