Regional Banks ETF retains support and momentum

Last Friday, the SPDR® S&P Regional Banking ETF (NYSE:) closed below its 200-day moving average. This can be seen in the chart below with the green line showing the 200-DMA.

However, while this was a key area to hold, KRE has now dipped into a support zone shown by the black line.

KRE-ETF Daily Chart

This area has 2 main support points. One on 7/3 and the other from the 12/20/21 close at $66.81. Next, we need to ensure that this price level holds and KRE breaks back above its 200-DMA at $69.37. That said, the momentum is also at a tipping point.

In the chart above, Real Motion is sitting on its lower band. The previous decline in this price zone on 7/3 showed that Real Motion broke below this band as price maintained support. This time the tape was not broken, showing the potential strength of the regional banking sector.

That said, this gives us a low risk trade setup since momentum and price are very close to their support. If the trade fails, we can take a quick loss and wait for another setup.

While buying KRE is an option, we can also look for trades in its holdings.

Silvergate Capital Daily Chart
Silvergate Capital Daily Chart

Silvergate Capital (NYSE:) is a holding that shows more strength than weakness and Real Motion is on the verge of breaking through its 200-DMA.

If the regional banking space can turn around quickly, SI could be a company leading the way higher.

ETF Summary

  • () 447 support.
  • () 209 pivot.
  • () 350 swivel.
  • () 369 to clear and hold.
  • KRE (Regional banks) 66.81 to hold.
  • (Semiconductors) 266.81 to hold 50-DMA.
  • (Transport) Must erase more than 261.
  • (Biotechnology) 127 majors support 50-DMA.
  • (Retail) 77.86 to erase.
  • () I would like to see this back above 182.
  • () Support 50-DMA at 70.
  • (Agriculture) Resistance zone 22.30, support 21.26.