As we briefly noted in last week’s Sector Snapshot, the Financial sector has been making a series of higher highs and higher lows, making it attractive from a technical perspective. Additionally, it is just barely overbought as of today, and it also has the lowest P/E ratio of all sectors. While the sector ETF (XLF) is still working its way to new highs after recently pulling back in the first weeks of March, a number of stocks within the sector are breaking out to new 2019 highs or above levels last seen before the late 2018 sell-off. Taken from our Chart Scanner, we show the charts of some of these stocks below.
Across the sector, there are several opportunities with a variety of financials from FinTech to Banks. To highlight a few, American International (AIG) has tested resistance near $44 multiple times since falling off a cliff last October. Though not there yet, a push above these levels could pose as a bullish sign for the stock. Discover Financial Services (DFS) and FactSet (FDS) both have similar patterns since the market found a bottom on Christmas Eve. Both stocks have gone on extremely strong runs so far in 2019 and after recently pulling back, the stocks have caught their breath and are once again pushing higher. While FactSet is reaching 52-week highs, DFS still has room to run to highs from 2018. The big banks are also looking constructive. Whereas Citigroup (C), Goldman Sachs (GS), and JP Morgan (JPM) have all been more or less meandering sideways for the past few weeks, today they have managed to distinctively break out above their recent ranges. In the case of Citi and JPM, both have found support at the 50-DMA before moving higher. Even stocks that have been in long term downtrends like KeyCorp (KEY) or Invesco (IVZ) have seen such strength that the downtrends have been broken. To add to the attractive technical setup, these stocks both have come back to retest this downtrend line having since bounced off and moving higher.