Tuesday, January 1, 2013
On December 17th I had done a post on XLF - More upside coming. I had made a case for more upside in Financials. While the SPY had XLF have pulled back since then, take a look at the pullback patterns. XLF chart looks much healthier as it never broke the 20SMA on daily. Pullbacks after a good run come in two forms 1) Nice consolidation pullback before next big run 2) Topping out pattern. While there are no good indicators to confirm which ones we are setting up for, a stock or chart holding the key support levels after a minor pullback usually is a good sign. I personally think we are setting up for much higher XLF in early part of 2013. Some of the key components of this index are looking really good as well. BAC turned out to be the top S&P performer for 2012. My personal favorites are JPM, GS and C, just for the quality and fundamentals. Here's a quick review of the charts.