Since the North American market opened the gap that I called the Trump gap, which is the levels where Wall Street indices were quoted Just before Donald Trump’s electoral victory, it was clear to me that sooner or later that gap was going to be filled and I do not rule out that it could end up being closed.
A gap in a stock price chart, also known as a “gap”, is an empty space that occurs between two consecutive bars or candles. It occurs when the opening price of a period is significantly higher or lower than the closing price of the previous period, without any transactions between those levels. The gaps are usually reflect sudden movements in market perception due to news, financial results or external events, and can be classified into different types: breakout, continuation (or breakout), or exhaustion, depending on the context in which they appear and their technical meaning.
Today I want to analyze the gap opened by the gigantic KBE ETF (SPDR S&P Bank ETF), which follows the evolution of an index composed of stocks in the US banking sector, including commercial, regional and investment banks. It is one of the largest and most liquid funds in this sector, offering broad exposure to the US financial system. In fact, I want you to see the KBE ETF as a barometer of what the US equities and global, since the banking sector is key to economic health and usually anticipates movements in the markets, reflecting confidence in growth, financial stability and credit expectations.
Well, the KBE opened an important and large gap after the election of Donald Trump from $54.50, which is precisely where it has relied on in the short term and which has stopped the sharp falls in the sector on the other side of the Atlantic. The gap that opened 8% higher led the KBE to overcome the resistance represented by the 2022 highs, which were the origin of the last major medium-term decline in the sector, specifically almost 50%, hence the relevance from a technical point of view that this gap, which could be considered a breakout gap, is not closed.
If the KBE loses the support zone of $54, the bottom of Trump’s gap, we would be facing a clearly bearish signal in the banking sector and, therefore, in the North American market, which would alert us to the possibility of witnessing a further correction. deep that could at least seek the $50 area, which would mean an additional decline of 7% in the sector. I would see the reach of the $50 area in the KBE as a magnificent opportunity to buy US banks again and before that I would only consider it if the KBE confirms a small bullish turn pattern in the form of a double minimum at $54. dollars, for which it must beat $56.60. Looking to buy either around $50 or if it exceeds $56.60, I will now go on to analyze the US banks that are on the list of “blue sapphires” which, as you know, are companies eligible for enter the fund advised by theEconomist Tressis ECO 30 Wallet.
Among these, names such as Bank of America, Citigroup and Western Alliance Bancorp.
Bank of America (BAC)
Bank of America is one of the largest US banks by assets, offering diversified financial services such as commercial banking, wealth management and capital markets. Its global reach and consumer exposureoya business makes it a pillar of the American economy. It is one of the most influential entities in the evolution of the banking sector and the stock market.
Operationally, if you have the bank in your portfolio, the recommendation is to hold, but if you want to buy, the optimal thing is to wait for a correction or fall similar to the one that took place between last July and August, which took the bank to 44.40 at $35.20. That would happen if it falls to the $38.50 area. If that happens, I would be in favor of increase or buy the bank, looking for it to head towards new highs above $48 from there.
Citigroup (C)
With operations in more than 160 countries, it is a leader in global banking and financial markets, especially in corporate and institutional services. Its international network positions it as a reference in global transactions and risk management. Although it has had regulatory challenges, remains key in the global financial sector.
Operationally, I want you to place your buy orders at the bottom of the wide gap that opened up after Trump’s election, specifically $63.80. A fall to that support would be a magnificent opportunity to buy Citigroup shares, seeking to extend from there the impressive upward trend that defines the bank in recent months, which has between eyebrows going to recover the highs of 2020 and 2021 around 80-85 dollars. Until then there would still be a potential of 30% from $63.80.
Western Alliance Bancorp
A regional bank with a strong focus on specific US markets, known for its agility and ability to serve small and medium-sized businesses. It has gained relevance in recent years thanks to its organic growth and strategic acquisitions. Its differentiated approach makes it representative of the health of regional banks Americans.
Operationally, Western Alliance Bancorp would be interesting if it retreats to the $75 area. That fall would emulate the consolidation seen at the beginning of last year, just around this time, which took the bank from 70 to 54 dollars. A drop to $75, where you can place your trading orders buy to avoid the temptation of not buying if there is that pullbackI would see it as a perfect opportunity to ride the bank’s bullish trend in search of increases towards the 2021 highs of $116.
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