After a tough summer, the KBW Insurance ETF (KIE) seems to have bottomed out. In the last few weeks it has begun its recovery and has just recently crossed back above its 200-day moving average. The indecision in the chart seems to be resolved: KIE is moving upward strongly and just in time to keep that 200-day MA, which was going sideways, from beginning to turn down.
When it comes to the financial sector, it appears the place to look for stock price appreciation based on improving fundamentals is in the insurance companies. Merrill Lynch, for example, has raised 2007 earnings estimates for a number of the larger players:
American Financial Group (AFG)
Chubb Corp. (CB)
Allstate Corp. (ALL)
Travelers Cos. (TRV)
Disclosure: author owns no shares of any companies mentioned in this article