Here is an excerpt of an article I wrote for tonight's Chart Advisor Newsletter.
"Financial stocks have been consolidating for approximately five months following a sharp rally in the first half of 2009. Recently, volatility in the financial sector has been dying down as money and interest rotate to other sectors such as commodities. However, 2010 has started off with a bang, and the financial stocks may be finally clearing their consolidation ranges.
The chart for the Financial Select Sector SPDR ETF (NYSE:XLF) summarizes what many of the bank stocks and financials look like. XLF has been in a consolidation since August, as it works off its prior rally. It has been trading in a very tight range recently, and the 20- and 50-day moving averages have practically turned sideways. However, the beginning of the year has started with a move above the declining trendline that was framing the upper part of the consolidation. While XLF has yet to set new highs, the recent move is a positive development and could be the beginning of a new rally in the group."
To see the chart and read the rest of the article please follow the link below:
Tickers mentioned in the article include:
Financial Select Sector SPDR (ETF) (Public, NYSE:XLF)
Goldman Sachs Group, Inc. (Public, NYSE:GS)
JPMorgan Chase & Co. (Public, NYSE:JPM)
Capital One Financial Corp. (Public, NYSE:COF)
