XLF Financials Weekly Chart Rising Wedge Negative Divergence
The financials are goosed higher this week on happy talk about AIG, blue sky talk for 2013, Meredith Whitney bank analyst turning bullish and hope of future higher dividends. The daily chart has lots of momentum to the upside so price will want to play around at these levels a few days. The short green lines in the indicators verify this short term strength occurring now. However, the weekly chart shows the negative divergence clearly in place (red lines). Price may top in the apex of the rising wedge then a spankdown would be expected. Perhaps one of Keystone's 2014 predictions will be a large selling event for financials in early 2013. Despite all the finanical bullishness, and the majority of pundits saying to buy banks with both hands, the weekly chart indicates limited upside remaining which will lead into a negative divergence smack down. Meredith has a great track record but her bullish call on the financial sector today may be a major mistake. Keystone favors the banks from the short side only moving forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
What is FAZ looking like Short Term... Again Messed up and didnt close short position earlier and now down Huge. The Financials seem to go up forever. Any chance for $20-$25 early 2013? Also, what do you see as a bottom?
ReplyDeleteKeystone is in FAZ right now and likes it moving forward. Banks are jumping on the fiscal cliff joy, more QE, anticipation that some divvy's will rise, Meredith Whitney upgrade, so there was a lot of pumping the last couple days. Knife-catching is always dangerous. FAZ is 15.03, so the 80/20 rule says 2's lead to 8's so 14.80 likely on tap for Wednesday, so see if that holds. At this juncture, 20 is doable in early 2013. The majority of traders are gun-ho for the financials so it is contrarian to be short. FAZ may form an inverted H&S as the bottom is placed into early 2013.
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