Conclusion, Investment Implications, Strategy

The SPDR S&P Regional Banking ETF (KRE) is in the midst of an emerging major bullish trend change amid expanding investor assets and recent relative  outperformance versus the S&P 500, all which suggest an emerging buy/overweight opportuniy.  We also view the VanEck Steel ETF (SLX) as an emerging buy/overweight opportuniy, joining XME as an Asbury Research idea in the metals and mining space.

Current Sector & Industry Group Ideas

Table 1 below is also accessible via the Sector & Industry Group Ideas rectangle at the top of the Research Center.

Click the table to  make it larger

This table also regularly appears in our weekly Keys To This Week: Sector & Industry Groups report published on Monday mornings.

Analysis and Rationale

The upper panel of Chart 1 below plots the SPDR S&P Regional Banking ETF (KRE) daily since July with its 200-day moving average, a widely-watched major trend proxy.  The lower panel plots a corresponding chart of KRE’s daily relative performance versus the S&P 500 (SPY) along with its 63-day moving average, which we use to determine the ETF’s quarterly relative performance versus the benchmark.

Chart 1

The colored highlights in the upper panel show that KRE is currently edging above its 200-day MA to suggest an emerging major bullish trend change.  The green highlights in the lower panel show that KRE is also in an emerging quarterly trend of relative outperformance versus SPY.

These two factors, as well as recent monthly expansion in the total net assets invested in KRE (not shown), suggest an emerging buy/overweight  opportunity.