The SPDR S&P Regional Banking ETF (KRE) is trading at a new low for the move down Friday. Traders seem to be still worried about the future of regional banks such as Western Alliance Bancorporation (WAL) , which is down about 4% in early trading Friday.
Let's check the charts of the KRE again.
In the daily bar chart of KRE, below, I continue to see a bearish picture. The shares are in a steep and unrelenting downward trend. The slopes of both the 50-day and the 200-day moving averages are negative. A small triangle (or pennant) continuation pattern the past week or so has broken out to the downside.
The daily On-Balance-Volume (OBV) line remains pointed down and tells me that traders are still aggressive sellers of KRE. The Moving Average Convergence Divergence (MACD) oscillator is still bearish.
In the weekly Japanese candlestick chart of KRE, below, I can see that the two most recent candles show us upper shadows. Despite the steep declines we have seen, traders are still rejecting the highs.
The weekly OBV line is pointed straight down and the MACD oscillator is bearish.
In this daily Point and Figure chart of KRE, below, I can imagine the new low for the move down that should happen during trading Friday. This new low will refresh the downtrend. The $20 area is the price target.
In this weekly Point and Figure chart of KRE, below, the same $20 price target is shown.
Bottom-line strategy: I have no special knowledge of the financial conditions at any bank in the KRE ETF but I am reading the charts and indicators and I would anticipate further weakness in the days and weeks ahead. Avoid the long side.
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