Our Previous Analysis on “SlammDunk Signals suggesting Blow off Top for Super Regional Banks” highlighting the endless merry go round called sector rotation leads to what is fashionable becoming unfashionable. This applies when a sector has been leading the charge as the market leader. It becomes a crowded trade and once was once construed as bullish news no longer has its desired impact on share prices. Last weeks widely anticipated interest rate rise is perceived to be good for banks, but our indicators had already signaled a Blow Off Top via our SlammDunk signal.
Since that day banks have been under-performing the market and sliding down the sector board as investors exit. Now that some time has elapsed its worth returning to those stocks and seeing what the technical picture is now. Resistance moving to the top of the trend is the first pre-requisite and then any breaches of support points.
First up is USB. This posted a SlammDunk signal and then last week the Daily Peak Expansion stepped down. Support remains distant.
Next is PNC. This had an ideal set-up post SlammDunk as the weekly line rose from below price to the top and once again support is distant.
BBT did not post a SlammDunk but weekly resistance did move to the top of the trend. Note that it is approaching a support point.
STI did post a signal and both daily and weekly lines moved to the top. Today it is breaking daily support and opening up space to decline.
FITB has done almost the identical as STI.
KEY did not post at the highs but is actually posting a Slammdunk sell today if a little late in coming to the party, plus the signal is close to support.
HBAN has slumped straight into a support point. That would act as a partial profit taking point on a short position.
Bigger mainstream banks are also breaking down. JP Morgan has seen major resistance move to the top of the trend and now opens up space to slide.
Lets see how these stocks how these stocks develop over the coming weeks.