Regional banks making a comeback?

In looking over tonight's Swing Trading Signals, one sector seemed to be standing out. There were a bunch of BUY signals for regional banks.

Out of 13 BUY signals, there were 6 that were regional banks:

City Bank (CTB)
The Elmira Savings Bank, FSB (ESBK)
First United Corporation (FUNC)
MERCANTILE BANCORP, INC. (MBR)
Old Second Bancorp, Inc. (OSBC)
United Western Bancorp, Inc. (UWBK)

In addition, there was a large money center bank on the list: MITSUBISHI UFJ FINANCIAL GROUP, INC. (MTU).

After three down days, financials certainly spiked upward today. Interestingly, the Financial Select Sector SPDR jumped 2.27% while the KBW Regional Bank ETF (KRE) only moved up 1.33%. Some of the banks on our list did much better than KRE and some only matched it.

In looking at the charts of these stocks, I have to say that some of them look pretty dismal. For the most part, I believe we are seeing short term signals here as the longer-term trends are not yet looking like they are quite ready to break to the upside. Still, most of these stocks could be candidates for a modest move that continues to the vicinity of the upper Bollinger Band. As such, there could be a few dollars to be made.

Disclosure: no positions

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