“And though XLF has repeatedly found a floor in the $23.00-$23.50 region — home to its year-to-date breakeven mark and a 23.6% Fibonacci retracement of its recent rally — the formerly supportive 50-day moving average appears to have switched roles to act as resistance,” according to Schaeffer’s.
The good news for financials is that the sector, the second-worst performer this year behind only energy, is widely regarded as perhaps the only sector in the U.S. that is attractively valued relative to the broader market and its own long-term averages.
Aggressive traders looking to capitalize on June woes for bank stocks can consider the Direxion Daily Financial Bear 3X Shares (NYSEArca: FAZ), ProShares UltraPro Short Financials (NYSEArca: FINZ) and Direxion Daily Regional Banks 3x Bear Shares (NYSEArca: WDRW).
Other bearish plays on the sector include the ProShares Short Financials ETF (NYSEArca: SEF), which takes the single inverse or -100% of financial stocks, and the ProShares UltraShort Financials (NYSEArca: SKF), which takes a leveraged -200% of financials.
For more information on the financial sector, visit our financial category.