Financial SPDR (XLF): Banks are coming out of multi-year funk
You’ve likely heard all the potential positives about financial stocks from me and other Cabot analysts; suffice it to say that the prospect of less regulations (including a possible rewrite of the Dodd-Frank bill later this year), higher interest rates and a steeper yield curve (boosting interest income and margins), an overall accelerating economy and the prospect of higher dividends and share buybacks could kick banks out of their multi-year funk.
The Financial SPDR (XLF) ETF built a huge base from mid-2015 through November 2016, then exploded higher post-election. It’s now rebounding after a test of its 50-day line, its first test of that key support level since it began to trend higher. You could nibble here with a stop just below 22, though I would prefer to buy on a move above 23.9, which would tell you the buyers have returned, and use a stop near 22.7 or so.