Pro Charts: Stocks & ETFs

Bank ETF Holds Technical Chart Parallel, But Bear Flag Still Intact

Updated: Jun 30, 2024 | Published: Jun 30, 2024
Verified Investing
By Verified Investing
Bank ETF Holds Technical Chart Parallel, But Bear Flag Still Intact

The Regional Banking ETF (KRE) recently tested support at the low end of a channel. It held firmly...for now. The overall channel is within a bigger down move from March 2023 when banks were failing. When a paralell channel (sideways to slight upside chop) is inside a bigger downmove, this is considered to be bearish price action. It ultimately means the Regional Banking ETF (KRE) will likely breakdown in the near future.

There have been rumblings lately about the banks. Many are sitting on massive losses from commercial real estate loans that have gone bad and mortgage backed securities that have lost 50% of their value. It was also rumored that the big banks like JPMorgan were secretly unloading bad loans. Just days after that rumor, the Federal Reserve scolded the big banks for not having a plan to exit trillions-of-Dollars in derivatives they are holding.

Ultimately, Verified Investing follows the charts because the charts are the only unbiased factor out in the investing world. As of now, there is a classic bear channel on the Regional Banking ETF (KRE). While support has held, it will likely break lower in the coming weeks.