Today SPDR’s regional bank ETF that trades under the symbol of KRE broke slightly above its near term resistance level. The recent positive move upward of this group has shown some clear bullish signs. As we noted, the stock is at or slightly above a technical point of resistance and the last few days volume has been strong. These items can bee seen in the daily chart shown below.
Beyond the daily price pattern, a weekly chart of the ETF shows that the bullish price action is still firmly in place. This has been the trend since the January sell-off.
What’s causing the recent bullish run? The latest consensus odds I heard thrown around for a December rate hike by the Federal Reserve are somewhere in the neighborhood of 2/3rds. A rate hike implies banks will have an easier time earning higher margins on financial instruments they’re offering. Profitability is assumed to follow.