Financials Revisit a Long-Term Level
The past week’s selloff in banks has inflicted some punishment on the broader financial sector. But how severe is it? Will the crisis become an opportunity for patient buyers?
Today’s chart of the SPDR Financial Select Sector Fund might help answer those questions. It uses weekly candles to help provide a long-term perspective.
The main pattern with potential relevance is the price area around $31. It was the high on two notable occasions: before the financial crisis in 2007 and immediately before the pandemic in February 2020.
Notice how XLF tested and held this critical level in June and July of 2022. The index briefly fell about $1 below it in October but recovered after a few weeks. Those previous bounces may suggest that old resistance has become new support.
Fast forward to March 2023 and XLF is back in the same neighborhood. This morning saw a probe as low as $30.90 before prices rebounded.
Given that the current low is slightly above the October trough, the result could be an inverted head and shoulders basing pattern. (See the white arrows.)
The 200-week simple moving average (SMA) is the other potentially noteworthy pattern. Notice how XLF bounced at this line at other moments in 2016 and 2018. (See the green arrows.)
Standardized Performances for ETF mentioned above:
Financial Select Sector SPDR® Fund ( XLF ):
1-year: -7.27%
5-years: +23.73%
10-years: +150.14%
(As of February 28, 2023)
Performance data shown reflects past performance and is no guarantee of future performance. The information provided is not meant to predict or project the performance of a specific investment or investment strategy and current performance may be lower or higher than the performance data shown. Accordingly, this information should not be relied upon when making an investment decision.
Exchange Traded Funds (“ETFs”) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses. Click here to find the prospectus.
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TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
Today’s chart of the SPDR Financial Select Sector Fund might help answer those questions. It uses weekly candles to help provide a long-term perspective.
The main pattern with potential relevance is the price area around $31. It was the high on two notable occasions: before the financial crisis in 2007 and immediately before the pandemic in February 2020.
Notice how XLF tested and held this critical level in June and July of 2022. The index briefly fell about $1 below it in October but recovered after a few weeks. Those previous bounces may suggest that old resistance has become new support.
Fast forward to March 2023 and XLF is back in the same neighborhood. This morning saw a probe as low as $30.90 before prices rebounded.
Given that the current low is slightly above the October trough, the result could be an inverted head and shoulders basing pattern. (See the white arrows.)
The 200-week simple moving average (SMA) is the other potentially noteworthy pattern. Notice how XLF bounced at this line at other moments in 2016 and 2018. (See the green arrows.)
Standardized Performances for ETF mentioned above:
Financial Select Sector SPDR® Fund ( XLF ):
1-year: -7.27%
5-years: +23.73%
10-years: +150.14%
(As of February 28, 2023)
Performance data shown reflects past performance and is no guarantee of future performance. The information provided is not meant to predict or project the performance of a specific investment or investment strategy and current performance may be lower or higher than the performance data shown. Accordingly, this information should not be relied upon when making an investment decision.
Exchange Traded Funds (“ETFs”) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses. Click here to find the prospectus.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
Feragatname
Bilgiler ve yayınlar, TradingView tarafından sağlanan veya onaylanan finansal, yatırım, işlem veya diğer türden tavsiye veya tavsiyeler anlamına gelmez ve teşkil etmez. Kullanım Şartları'nda daha fazlasını okuyun.