• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

The XLF Financial ETF Breaks Out to the Downside

The shares are now below the rising 50-day moving average line.
By BRUCE KAMICH
Sep 21, 2020 | 03:22 PM EDT
Stocks quotes in this article: XLF

Many market observers closely watch the Financial Select Sector SPDR ETF (XLF) , as it is an important sector and often a market leader at major turning points. Let's check on the charts and indicators for XLF.  

 
In the daily bar chart of XLF, below, we can see how prices have gapped to the downside Monday. Prices are now below the rising 50-day moving average line. The 200-day moving average line has been acting as resistance the past two months and rallies to the line have all failed.
 
The On-Balance-Volume (OBV) line has rolled over this month and tells us that action has switched from aggressive buying to aggressive selling. The trend-following Moving Average Convergence Divergence (MACD) oscillator is very close to the zero line and therefore very close to crossing it for a possible outright sell signal. 
 
 
In the weekly Japanese candlestick chart of the XLF, below, we can see a couple upper shadows at the underside of the declining 40-week moving average line. The upper shadows tell us that traders rejected the highs.
 
The weekly OBV line shows weakness from August into September and the MACD oscillator is still below the zero line and still short of crossing to a buy signal. 
 
 
 
In this daily Point and Figure chart of XLF, below, we can see a downside price target around $22. This is not a big decline but it would be a new low for the move down on this chart. Further declines are possible. 
 
 
 
Bottom-line strategy: It looks like Monday's decline in the XLF will be on relatively heavy trading volume and that tells us that investors are voting with their feet. The XLF could decline to the $20 area by year-end. Avoid the long side for now.
 
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: ETFs | Investing | Markets | Stocks | Technical Analysis | Trading | Banking | Financial Services | Brokerages

More from Stocks

The Housing Market Is Hot and Home Depot Is Poised to Make New Highs

Bruce Kamich
Jan 26, 2021 10:05 AM EST

We're in the middle of one of the best housing markets ever as people upgrade to homes away from cities.

Could Johnson & Johnson Go Higher and Higher?

Ed Ponsi
Jan 26, 2021 10:00 AM EST

Will the vaccine will be a game changer? The charts are giving indications that J&J is ready to run.

Clorox Is Ready to Clean Up as the Downtrend Has Been Broken

Bruce Kamich
Jan 26, 2021 9:20 AM EST

Let's review the charts and indicators.

An Entertainment Giant and a Big Drugmaker Present Buy Setups

Carolyn Boroden
Jan 26, 2021 8:30 AM EST

The stocks of Walt Disney Co. and Pfizer seem to offer nice upside potential based on their technical patterns.

Boot Barn Is Kickin' It, but Wait for a Correction to Saddle Up

Bruce Kamich
Jan 26, 2021 8:07 AM EST

The indicators for the western apparel retailer are bullish, but prices are extended compared to the longer-term moving averages, so be cautious.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:35 AM EST CHRIS VERSACE

    Another Big Winner for Stocks Under $10

    We're ringing the register Tuesday morning.
  • 08:05 AM EST GARY BERMAN

    Tuesday Morning Fibocall for 1/26/2021

    SPX (Long-Term View) The 1/21/21 NEW high @ 3861...
  • 09:52 AM EST GARY BERMAN

    INDU/DIA 20 DMA

    Fibocall: The DIA has the 20 DMA @ 307.81 and w...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login