Looking at the Financial Select Sector SPDR Fund (XLF) , the ETF that tracks the financial institutions such as banks, brokerage companies and insurance companies, I find a bullish setup on the charts. Let's check out the indicators and set a strategy to hopefully profit from a rally.
In this Point and Figure chart of the XLF, below, we can see that a trade at $28.65 is a breakout and the $32-$33 area is our first upside price target.
Bottom-line strategy: You could dig down and find the strongest looking stock in the XLF or you could just go long the XLF here. Risk a close below $27 for now and look for the mid-$30s as our first upside price target.