REGIONAL BANKS SHOW LEADERSHIP -- THAT INCLUDES BB&T, SUNTRUST, AND U.S. BANCORP -- CITIGROUP AND JP MORGAN CHASE MAY BE NEARING UPSIDE BREAKOUTS OF THEIR OWN -- GOLDMAN SACHS HAS HIT NEW HIGH FOR YEAR TO REVERSE PREVIOUS DOWNTREND

BANKS HELP BOOST FINANCIALS...Financials are one of the day's strongest sectors.  And banks are a big reason why.   The daily bars in Chart 1 show the KBW Bank Index finding support above its 50- and 200-day moving averages; as well as a rising trendline drawn under its two June reaction lows.   That's a good spot for banks to find new buying.  And many of them are.  Second quarter bank earnings released this week showed some weakening in trading revenue; but also showed strong consumer spending.  Which may explain why some regional banks (with bigger consumer businesses) are leading the banks higher.

Chart 1

REGIONAL BANK LEADERS...Three regional bank leaders are shown below.  And the first two appear be breaking out of bullish symmetrical triangle formations.  Chart 2 shows BB&T (BBT) trading between two converging trendines since March.  The green circle, howeve,  shows the stock rising above the upper line today.   Those converging trendlines form a triangular formation which, in the context of the uptrend started by last December's bottom, is a bullish formation.   Chart 3 shows a similar breakout taking place for Suntrust Banks (STI) from another symmetrical triangle.  Both upside breakouts suggest a possible retest of their 2019 highs.

Chart 4 shows even stronger chart action by U.S. Bancorp (USB) which has risen above its late-2018 highs to reach the highest level since early 2018.  Strong action in these three regional leaders bodes well for that entire group, and for banks in general.

Chart 2


Chart 3


Chart 4

CITIGROUP AND JPM TEST APRIL HIGHS...A couple of bigger bank stocks may be nearing upside breakouts of their own.  Chart 5 shows J.P. Morgan Chase (JPM) nearing a possible challenge of its previous peak formed at the end of April (116.33).  A close above that level would put the stock at an all-time high.  Chart 6 shows Citigroup (C) already in the process of testing its late April peak.   A decisive close above that intra-day high of 71.48 would put the stock at the highest level since last September.

Chart 5


Chart 6

GOLDMAN SACHS TURNS UP... There's one more bullish bank breakout that has already taken place.  The daily bars in Chart 7 show Goldman Sachs (GS) rising above its spring highs to achieve a bullish breakout.  But that's only part of the story.  The weekly bars in Chart 8 show the stock also rising above a falling trendline extending back to the start of 2018; while also hitting a new for this year.  That bullish combination ends the previous downtrend for the stock.  And suggests that a new uptrend has begun.  Chart 7 shows the blue 50-day average crossing above the red 200-day line (blue circle).  That bullish crossover can also be seen on Chart 8 with the 10-week average crossing above the 40-week for the first time since May 2018 (blue circle).   That's another bullish sign for the stock.

Chart 7


Chart 8
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