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I am no longer a buyer of the Finance sector but I am still holding some bank stocks. My sights are now set on exiting.
Let’s take a look at the Finance sector (XFJ). First the daily:
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And the weekly:
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As I write (midday, 11 October), we have seen two off days for the DOW. Our market has been similarly affected with selling of stocks and sectors that have had great runs. One of these is the Finance sector.
The first Wave Five has been reached (as we can see in the daily chart) but a second Wave Five is a possibility.
A Wave Four is still being signaled on the weekly chart but this is some months away, possibly in the second and third quarters of 2013. I suspect that we will see more upside before then.
Turning our attention to the major banks:
ANZ will present better buying opportunities ahead:
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CBA still has more upside but the price has moved out of the ‘good buy’ zone:
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NAB – if you bought recently for a short-term play, you may want to think about exiting:
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WBC has then possibility of more upside for those already holding. Others may find better buy opportunities in the months ahead:
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The Finance sector overall is now approaching a ‘toppy’ level and I am now looking to other stocks for new Wave Fives. Some of the stocks I am following are:
CPU:
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FXL:
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SMX:
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WES:
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In the coming days I will be watching these stocks for break outs. If nothing eventuates, I will search for other stocks that are in Wave Four but which are still retaining momentum.
More about these next week...
Enjoy the ride
Tom Scollon |