In a strong uptrend, traders could fuel the rally once a security conclusively breaks through a resistance.
Erin Gibbs of S&P Capital IQ also pointed to fundamental strength in the sector. Gibbs calculates that the financial sector has an expected earnings growth rate of 10.8%, the third highest out of the 10 S&P sectors, and is more attractively valued than the other big expected growers, like consumer discretionary and healthcare names.
Financial Select Sector SPDR
For more information on the financials sector, visit our financial category.
Full disclosure: Tom Lydon’s clients own shares of SPY.