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Bank Bear Ps Back On The Table

Published 05/03/2012, 12:28 AM
Updated 07/09/2023, 06:31 AM
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Yesterday’s rally nearly invalidated some of the individual bank Bear Pennants with many of those charts appearing very inconsistent outside of the clear and continued reversal of this year’s rally, but today’s drop has probably but better apexes on some of those patterns and strengthened others. Rather than breaking all of those charts down here, though, let’s just take a look at the XLF and first without today’s trading action as shown directly below.
Financial Chart
As can be seen, this year’s rally in the XLF has been guided by a bullish Ascending Trend Channel that can be divided into two Channels with the middle trendline in blue representing this year’s uptrend and a trend that is clearly trying to reverse. Below the blue trendline and the XLF’s 50 DMA is the red trendline marking the XLF’s intermediate-term uptrend at about $15.20 today.

Should the XLF drop below $15.20 today or any day thereafter, its intermediate-term uptrend will start to reverse and this seems quite possible in looking at its Bear Pennant below.
XLF CHART
This Bear Pennant in the XLF confirms at $15.31 for a target of $14.92 with potential failure probably at $16.01. But the XLF’s near-term uptrend reversal supports not this pattern’s failure but its fulfillment and a possibility that would set its bearish Rising Wedge with a much lower target into motion.

Today let’s just keep the focus on the truly near-term technical aspects of the XLF and ones that mean the Bank Bear Ps are back on the table even though none actually ever fell off.

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