Bounce play in the financial stocks
Updated
The financials (XLF) have broken down from its top formation effectively ending a 9 year bull run.
However, the break was a bit too hard too fast and I think there is some room for a decent size bounce if the Fed is willing to give some hint that the pace of tightening is negotiable to the circumstance.
Among all the big names in the financial space, I like Citigroup the most as it has some appealing technicals.
Notably, the measured move target has been achieved and it is trading into the big consolidation range just before the last thrust to the upside.
I would reckon the entry of 54 dollar is attractive from the risk reward basis that the 60 dollar mark should be a reasonable target in the scenario of a favourable Fed policy announcement.
However, the break was a bit too hard too fast and I think there is some room for a decent size bounce if the Fed is willing to give some hint that the pace of tightening is negotiable to the circumstance.
Among all the big names in the financial space, I like Citigroup the most as it has some appealing technicals.
Notably, the measured move target has been achieved and it is trading into the big consolidation range just before the last thrust to the upside.
I would reckon the entry of 54 dollar is attractive from the risk reward basis that the 60 dollar mark should be a reasonable target in the scenario of a favourable Fed policy announcement.
Note
XLF has finally found support around 50 level which coincides with the 70.5 retracement. I would see this as a strong hand bounce with 58 mark in the bull's eye. Between 58 and 62, it is going to be met with heavy overhead supply. Looking for short there.
Note
Sorry, it is actually the citigroup. The XLF is my benchmark that I was talking about.
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