· Financial stocks set up for a bullish pattern not seen in nearly a decade, according to chart
Financial stocks have been on fire so far this year.
The XLF financials ETF has risen more than 17% over that stretch, roughly double the gains by the S&P 500. A shockwave from the Archegos margin call news last week failed to deter the rally in the group.
“They’ve become very, very overbought a couple of weeks ago,” Maley told CNBC’s “Trading Nation” on Tuesday. “You look at its RSI chart, relative strength index, on a weekly basis, it’s still quite overbought. The last three times it got this overbought, it took a long time for it to really work off that condition and bounce back.”
The XLF ETF trades at 72 on its RSI, an overbought condition it has not seen since January 2018. Any reading above 70 suggests an asset is overbought.
Still, Maley said the longer-term setup looks incredibly strong for the financials.
“The 50-week moving average is getting very close to the 200-week moving average. In other words, it’s getting very close to a golden cross on a weekly basis. Golden crosses tend to be bullish on a daily basis on the charts, but when you get it on a weekly basis, it’s even more so. In fact we haven’t seen one of those crosses since 2012,” said Maley.
· Stock futures inch higher after major averages close lower, S&P 500 retreats from record
U.S. stock index futures inched higher early Wednesday, after the major averages finished Tuesday’s session in the red.
Futures contracts tied to the Dow Jones Industrial Average gained 25 points, or 0.08%. S&P 500 futures rose 0.07%, while Nasdaq 100 futures were up 0.14%.
“There are lots of reasons to be excited about the months ahead, and we’re generally optimistic for this year,” noted Lindsey Bell, chief investment strategist at Ally Invest. “Stocks’ momentum is strong, no doubt about that. But the market may be ready to take a breather as investors digest all the good news, determine how much of that is priced in and weigh it against uncertain risks like inflation,” she added.
· Asian shares ease from three-week highs, dollar retreats
Asian shares pulled back from a three-week high on Wednesday, dragged lower by Chinese stocks, though investors were still focused on upcoming company earnings for more signs of a global economic recovery.
Eurostoxx 50 futures were off 0.1%, those for Germany’s Dax were barely changed while London’s FTSE futures were up 0.4%. E-Mini futures for the S&P 500 were mostly flat.
Earlier, MSCI’s broadest index of Asia-Pacific shares outside of Japan had started on a firm footing, going as high as 697.01 points, a level last seen on March 18.
However, it succumbed to selling pressure and was last down 0.1% after Chinese and Hong Kong shares opened in the red following a strong rally last week.
· Tokyo stocks close slightly higher on global recovery hopes, domestic virus cases weighs
Tokyo stocks closed marginally higher on Wednesday on increased hopes for the global economic recovery, although an increased surge in domestic COVID-19 cases weighed on the market again.
The 225-issue Nikkei Stock Average added 34.16 points, or 0.12 percent, from Tuesday to close the day at 29,730.79.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, gained 13.09 points, or 0.67 percent, to finish at 1,967.43.
· China shares dip as distillers lead consumer slump
China’s main equity gauges fell on Wednesday with consumer firms dragging the market lower, as investors continued to worry that strong economic data could lead to possible policy tightening.
At the close, the Shanghai Composite index was down 0.1% at 3,479.63.
The blue-chip CSI300 index was down 0.71%, with the consumer staples sector down 3.01% after rallying nearly 6.5% last week. The financial sector sub-index slid 0.39%, and the healthcare sub-index lost 0.29%.
· European stocks mixed after U.S. market pullback
European stocks were muted on Wednesday as investors digest global market moves, particularly a pullback in the U.S. market on Tuesday.
The pan-European Stoxx 600 slipped 0.1% below the flatline, with travel and leisure stocks shedding 1% as Covid-19 restrictions tighten in mainland Europe, while autos gained 0.6%
European markets are facing some uncertainty Wednesday, with investors digesting moves in the U.S. markets and the latest international growth forecasts from the International Monetary Fund.
Reference: CNBC, Reuters
Thai
Eng