Banking ETFs remain well below their 2007 peak from before the subprime meltdown.
Following a post-financial crisis rally into early 2010, banking stocks as measured by the KBW Bank Index have traded in a narrowing range with a slight downward bias, according to chartoftheday.com.
“Since late 2011, however, the trend has been up,” it added. “With banking stocks having recently pulled back from resistance and currently testing support, this all-important sector is fast approaching a critical decision point.”
PowerShares KBW Bank (NYSEArca: KBWB) tracks the referenced index.
J.C. Parets at All Star Charts notes the long-term bank chart “shows us that a major directional decision is about to be made in a very important space for the U.S. equities market.”
“The question we need to ask ourselves is whether the breakout will occur to the upside, or if prices rollover and breakdown as it approaches the apex of this pattern,” he wrote. “I have a feeling that the decisive move will be the beginning of a much larger directional trend.”