“Given these conditions, it remains appropriate to maintain a neutral/bearish stance in these markets. With that being said, these sectors could work through their overhead supply and bearish conditions by continuing to correct through time. I think that is the lower probability outcome, therefore I’m going to outline where they have the potential to go if they correct through price,” according to See It Market.

KRE’s sensitivity to interest rates is well known. The ETF rose just 2% in 2014 after surging 47% in 2013 when yields spiked. KRE’s holdings have an average beta of +0.44 to moves in the US 10 Year Treasury.

Related: Central Banks Policies… Everyone Gets a Trophy

An improving U.S. economy could foster increased borrowing and financing by businesses, large and small, across the U.S. while benign mortgage rates could also provide a lift to the mortgage lending operations of regional banks.

“Prices consolidated for the past several weeks as they attempted to work through the overhead supply in a healthy way, but are now resolving to the downside and confirming the bearish momentum divergence. KRE looks likely to retest the uptrend line from the February lows and support near 38.60. If that support fails to hold, prices will  likely test former support near 36, followed by the February lows of 32.63. And this would weigh heavy across regional bank stocks,” adds See It Market.

For more information on the Banks ETF market, visit our Banks category.

Financial Select Sector SPDR

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